What is first-mile delivery? How to optimize first-mile logistics to overcome its challenges
By FarEye | October 13, 2022
At the tip of every supply chain operation is the first mile. It's the first step in a long journey that a product, raw materials or any goods make before settling into the hands of the end consumer.
What is first-mile delivery?
First-mile delivery can be defined as the transportation of goods from a merchant’s premises or warehouse to the next hub from where the goods are forwarded. First mile means different things for different businesses. For retailers, first mile means shipping goods from local distribution centers to stores. For manufacturers, it means transportation of finished goods from a plant or a factory to a distribution center.
For example, if you choose UPS as a courier, first-mile delivery will be your product being delivered from your warehouse to UPS’s warehouse. The effect of first-mile delivery is particularly impactful as it serves as the groundwork for further logistics processes. When it is executed efficiently, the likelihood of a happy customer increases.
Movers and packers consider the first mile as the process by which they pick up goods from the end-customer’s home or store and then move it to a warehouse or storage location. In the case of e-commerce companies, first mile defines the process where goods are picked up from a retailer and then transferred to third-party logistics providers or courier service providers to be delivered to the end-consumer.
What is first-mile logistics?
First-mile logistics can be defined as the first move in getting a product to the consumer. In general, it refers to transport but can also include assembling material. The highest aim of optimal first-mile operations is meeting the customer’s needs according to varying timelines. Properly executed first-mile tracking managed variables in logistics, transportation, and inventory management processes. Providing visibility at this stage aids in predicting outcomes that positively influence last-mile operations which involve the final part of the delivery when the product reaches the customer.
First Mile and E-commerce Operations
E-commerce has experienced huge growth in recent years and competition is intense. It’s more important now than ever for businesses to do everything they can to ensure customer satisfaction. A retailer's job is to ensure this first phase of product delivery goes smoothly and without difficulties.
Careful consideration of first-mile delivery processes is essential for online retailers. Even before the first-mile stage, your company has invested time and money into researching the best sources for acquiring products and materials. After that, a careful selection of a courier is made. When negotiating with the courier, you need to ask the right questions that lead to an optimal agreement.
If you ship internationally, learn the customs laws, and practices that need to be navigated. If you skip this step, it may result in carelessly handled or opened boxes that reach the customer in poor condition. In another scenario, the courier could help you deliver the package directly to the customer after signing a simple document.
Top 4 Challenges of First-mile Delivery Operations and the Role of First-mile Tracking
1. Poor focus on first-mile experience
Businesses over the years have understood the significance of last-mile delivery with regards to providing a delightful customer experience. This has resulted in a situation where the first mile has been conveniently ignored, because this process has fewer stakeholders and it is not customer facing. Now with the need to provide customers with end-to-end transparency of delivery progress and optimize logistics costs, equal focus should be given to first-mile operations. This triggers the need for enterprises to embrace robust first-mile tracking tools that optimize first mile costs and ensures end-to-end visibility of delivery operations.
2. Inefficient labeling techniques
A small but extremely important part of first-mile delivery is labeling. Even now a large number of businesses manually label packages. This leads to a situation where not all required fields are mentioned in packages making dispatching inefficient and prone to delays. Automating dispatching, a key feature of a last-mile tracking platform quickly addresses this challenge.
3. Improper packaging
In the race to deliver fast, packaging often gets impacted. Businesses tend to use uniform packaging materials irrespective of the type of item a package carries. This causes material damages in the first mile itself and thereby delaying the entire freight forwarding process. Hence, leveraging advanced delivery tools that empower businesses to gain better control of material handling is important.
4. Lack of visibility
Poor visibility of first-mile operations is a key challenge that ultimately impacts not just mid mile but also last-mile processes along with the end-customer’s experience. Inefficient tracking of movement of freight from a warehouse to a hub, poor handling, en route delays among others are key impact areas of poor visibility.
First-mile vs. Last-mile Delivery
Simply put, first-mile delivery is at the start of the delivery portion of the supply chain and last-mile delivery is at the end of the supply chain. First-mile operations get the product from the manufacturer via a courier to a carrier. Last-mile operations finish when the order is delivered.
Although first- and last-mile operations are at opposite ends of the spectrum, parallels can be drawn between them.
Last-mile operations encompass moving goods between a transport hub to the delivery location. It is of utmost importance to keep a competitive edge and engage in innovative approaches to stay ahead of the competition. Success in the first-mile delivery process aids success in the last-mile delivery process. Both are significantly impactful on customer experience. Building strong communication between retailers and logistics providers is essential in providing customer satisfaction in both first-mile and last-mile deliveries. The last-mile delivery person often asks the customer to sign order receipts or digitally scan the packages, updating their status.
Both first- and last-mile carrier providers need to apply operating principles that save money, time, and accurately reach their target destination. To effectively address operations, warehouse inventory and routing need to be analyzed and made readily available. While previously many of these tasks were done manually, technical applications have become a must.
Optimizing First-mile Logistics
The key to optimizing first-mile logistics is automating processes. Expenses may be converted into funds for growth by applying the right technology. Well-done first-mile operations result in greater efficiency in truck loading and delivery times at the last mile of the supply chain.
Smart manufacturers take advantage of any opportunity to assess logistics and look for ways to improve the speed of getting their product to the consumer. They collate data among several operations phases, inter-logistically. This may involve such outcomes as being able to offer their goods at a lower cost, therefore gaining an edge in competition.
An audit of the tasks of the company’s workforce can give insights into how to reassign some of the human tasks to automated ones. This generates operational savings as well as helping to boost employee satisfaction as assigning them new and more complex tasks can be seen as a promotion. This also may cut back on high turnover rates.
Why First-mile Operations Deserves Your Attention
Being the primary stage, first-mile operations are of utmost importance in laying down a strong foundation. Happy customers are customers who got their goods in hand in superior condition, on time. Customers are lost when standards are low or inconsistent. There’s too much competition out there to neglect even small mistakes that could be inhibiting growth for your business.