Last mile management

What is Last Mile Management? What are its Benefits?


By Komal Puri | March 18, 2024

Last mile is the most critical component of the supply chain. It is a direct link to the end customer - the final touchpoint. And that’s why it’s considered important for any business. The last-mile can make or break businesses. A good last mile delivery experience can win customer loyalty. A bad experience, and the consumer will not think twice before switching brands. 84% of consumers would not shop with a retailer after having a bad delivery experience. Top companies worldwide are pouring in investments to make their last-mile management more efficient.

What is Last Mile Management?

Last mile management can be defined as a set of processes or strategies that enables effective management of the delivery process in the final mile. It comes into play when the goods are being moved from the warehouse or a transportation hub to the doorstep of the end customer. Last mile management includes several key aspects like:

Route Optimization: Leveraging the power of AI and machine learning, efficient routes are planned factoring in constraints like traffic, distance, volume of deliveries, weather patterns, type of vehicles and number of delivery locations.

Technology Integration: Using modern technologies like GPS tracking, last mile management brings in real-time visibility into the delivery process.

Customer Communication: It involved keeping customers up-to-date on the delivery status of their shipments. It entails the ability to track orders in real-time and allows customers to also reschedule for convenience.

Vehicle Load and Capacity Management: A critical aspect is managing vehicle capacity so as to maximize the number of deliveries per trip.

Sustainable Practices: It also takes into account ways to make the last mile delivery process sustainable and eco-friendly.

Crowdsourced Delivery: Leveraging a network of non-professional couriers or local delivery services to increase flexibility and capacity, especially during peak times.

Challenges in Last Mile Management

The last mile presents a variety of challenges for businesses. Some of the challenges include:

Traffic Congestion

The streets and roads of cities across the world are chock-a-block with traffic resulting in delayed deliveries and increase in fuel consumption with delivery vehicles taking more time to get the shipments to the end customer. When customers don’t receive their goods on time it leads to dissatisfaction. Let’s also not forget heavy traffic directly impacts fuel and operational costs.

High Costs

53% of total shipping costs are related to last-mile delivery. Due to factors like fuel costs, labor charges and frequent requirement of vehicle maintenance, the last mile tops as the most expensive part of the supply chain. If not managed properly, it can lead to reduced profit margins and increased operational costs.

Limited Access to Remote Areas

While cities are clogged with traffic, managing last mile deliveries in remote and rural areas is a task with its own set of challenges. Poor infrastructure and limited connectivity makes delivering to remote customers an uphill task.

Seasonal Demand Fluctuations

During festivals, holidays or special events delivery volumes increase suddenly. Seasonality is another challenge that puts pressure on resources and leads to longer delivery times and even potential delivery disruptions.

Real-Time Tracking

Lack of full visibility into the last mile is a problem that affects both businesses and the end customers. With less real-time visibility, companies will be clueless about delivery issues until the shipment arrives in the hands of the customers. Without real-time updates, customers will have no idea about their shipments in case of unforeseen delays or circumstances like weather issues.

Customer Availability and Redelivery Attempts

Businesses always aim for a high success rate in first-attempt delivery but sometimes the customers may not be available to collect their deliveries. This can lead to increase in operational costs and unnecessary strife for the customers as well as the company trying to deliver the shipments.

How FarEye Solves These Challenges?

FarEye’s last-mile delivery management platform is built to tackle every challenge that companies face in the last mile. It can help businesses streamline their last mile delivery management process by optimizing and automating every step involved in last-mile delivery.

  • FarEye’s route optimization software enables businesses to plan the most cost-efficient and shortest routes for their deliveries.

  • With automatic order processing, the delivery management platform is able to handle large volumes of shipments, assigning them to delivery agents effectively. It also keeps tabs on driver progress.

  • Companies get real-time visibility into their shipments and can have more control over them.

  • Businesses can keep their customers informed on the status of their deliveries with real-time updates and also offer them flexible delivery options in same-day and next-day deliveries.

  • Customers can get branded tracking applications with electronic proof of delivery to monitor live delivery status.

  • The platform also offers a data dashboard that can provide deep, granular insights into each delivery. Using predictive data analytics businesses can plan for future deliveries as well.

How to Choose the Best Last Mile Management Software?

When choosing a Last Mile Management software solution, consider the following factors:

  • Scalability: The software must be flexible enough to handle any rapid surge in shipment volume, especially when your business is expanding.

  • Integration Capabilities: It must work smoothly alongside any existing systems in your company.

  • Real-time Visibility: The platform should be able to provide real-time visibility into your shipments.

  • Predictive Analytics: It should be able to provide you data that you can use to make or optimize business decisions.

  • Customer Communication Tools: Such tools must enable companies to effectively communicate with their customers.

  • Cost-Effectiveness: Consider the cost involved and whether it fits your budget.

In Conclusion

It is of paramount importance for businesses to master their last-mile delivery processes. If they focus on improving the last-mile it will have a trickle down effect and lead to a boost in customer satisfaction. While customer satisfaction is the holy grail for businesses, effective last mile delivery management offers more benefits in the shape of lower operational costs, higher profit margins and a competitive edge over their peers.

Komal puri

Komal Puri is a seasoned professional in the logistics and supply chain industry. As the Senior Director of Marketing and a subject matter expert at FarEye, she has been instrumental in shaping the industry narrative for the past decade. Her expertise and insights have earned her numerous awards and recognition. Komal’s writings reflect her deep understanding of the industry, offering valuable insights and thought leadership.

Komal Puri
Sr. Director of Marketing | FarEye

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