Let’s get started by saying that the importance of last-mile logistics is highly underappreciated and that this is one of the most misunderstood areas of the supply chain today. The truth is that while it may seem unimportant due to the fact that even its name is misleading, last-mile logistics can account for about 28% of the total cost of shipment of goods and it doesn’t necessarily mean that it involves what happens in the last mile of the process literally. Last-mile logistics can be involved with any part of the shipping process that takes place from the just a few blocks away from the delivery address, up to 100 miles away, depending on the circumstances. Last-mile logistics encompasses the last leg of the process that brings a product from the facility or distribution center, all the way to the end user. Normally this portion of the process is delegated to smaller shipping companies or local carriers that deliver the package themselves; however lately with the boom of e-commerce and the emergence of true giants of virtual marketing, it is becoming more and more important to place great emphasis in last-mile delivery since the growth of this market is reaching a point of unprecedented demand. Today in David Kiger’s Blog, we want to talk about the particular needs of this area of logistics and how Amazon is revolutionizing one aspect of last-mile logistics.
E-commerce cannot happen successfully unless there is a strong drive behind last-mile logistics. Customers are more than willing to pay more in exchange for better last-mile logistics services, faster shipping and other perks that come along when you have a well-organized plan for this last end of the shipping process. Last-mile logistics are going to keep growing as e-commerce is projected to reach almost $2.5 trillion by next year, and while some of the biggest names in the web have already created what we know as the standard procedures of last-mile logistics, smaller retailers must find ways to keep up with the pace and utilize solutions that work in their particular case.
Amazon just bought a new item into the market that is going to change last-mile logistics by solving one of the problems that has been unloaded onto landlords and apartment complexes with the advent of online shopping. Mailrooms are having to deal with an amount of packages and mail items that goes beyond what they were designed to hold when they were built before online shopping became what it is today. The burden placed on building managers is real and that is why Amazon has decided to come up with a solution. The product is called the Amazon Locker and we will see them ready to take shipments before the holiday season begins. The purpose of this product is to help residential areas and apartment complexes reduce the amount of clutter they will have to store in their mailrooms and give more control to the customers who will receive a code with their tracking information, that will allow them to open the locker and retrieve their orders.
The lockers are automated and they will have different size slots that will accommodate even the bulkier items that sometimes become such burden for mailrooms and even small shipping companies that are in charge of doing the last-mile deliveries. The lockers are not meant to be permanent solutions, but instead, they are there to ease the burden that the holidays bring along with the amount of sales that Amazon ships during those months. Amazon Lockers will also be available at some of their Whole Foods locations nationwide. As we have already stated, last-mile delivery is the most expensive part of the transportation process and Amazon has found a new way to significantly cut costs in that area. These savings are obviously beneficial not just for the customer, but also for the company that will be able to continue to position itself as the undisputed leader in e-commerce and online sales.
Retailers, in general, must find ways to prepare their transportation networks so they can put alternatives such as what Amazon is doing and thus bolster the capabilities of their last-mile delivery services. After the giant purchased Whole Foods and began changing the way we order items as basic and groceries, we have to stay ahead by finding ways to provide a service that can compete with companies that have a large infrastructure and a strong supply chain such as Amazon. E-commerce is here to stay and it is going to get bigger if anything. What else can be done by smaller companies so that they too can provide a service that competes? In a global economy, the world gets a lot smaller, so it only makes sense to think about those solutions that are closer to home and find ways to make them work in ways that are equally effective and efficient for all involved.
* Featured Image courtesy of Jeff Samsonow at Flickr.com