The last-mile holy grail: superior customer experiences, cost control & improved sustainability
By FarEye | October 13, 2022
Whether it’s a white-glove furniture delivery, an online shipment from a big-box retailer, or groceries ordered via a mobile app, today’s consumers expect to receive their goods on time, as promised. Anything falling short of that can have drastic repercussions—for both brands and the carriers and 3PLs executing delivery on their behalf. While on-time delivery was previously a nice-to-have customer benefit, it’s now a make-or-break factor with customers making point-of-sale decisions based entirely on delivery expectations. Package delivery experiences are replacing store purchase experiences as the most important overall factor in customer satisfaction.
A positive on-time delivery experience goes a long way toward solidifying brand reputation. Nearly 90% of shoppers are actually willing to pay more for a great customer delivery experience, according to Super Office. Just as importantly, a negative delivery experience is a deterrent: new customers who had problems with first orders were 30% to 40% less likely to repeat business, as determined by Zetes. And, a recent Reuters survey shows 65% of 3PLs believe customer experience is their most important near-term challenge. There are also indirect costs to consider with botched deliveries including redelivery attempts, cancelled contracts, increased need for customer service, fines, and damage to customer reputation.
Surging demand for consumer goods and home delivery has put increased pressure on parcel couriers. During week 50 (typically peak season for couriers) of 2021, on-time delivery rates for two of the largest delivery companies decreased versus the same period in 2020. The on-time rate for FedEx was 84.8% (down from 93.9% in 2020), UPS at 95.8% (down from 96.1% in 2020).
It’s not surprising that the stakes are high for the 3PLs and carriers tasked with executing on-time delivery promises. And, they must be able to meet those expectations in a way that is cost-effective for their own businesses, while also meeting demands for improved supply chain and delivery sustainability. How to accomplish all of that? Simply put, logistics providers need to get technology or get left behind.
Technology tools that provide real-time, data-driven insights and processes allow 3PLs to be more agile and help ensure success in the crucial last mile of the supply chain. Using a scalable, flexible, and adaptable intelligent delivery management platform, companies can count on strategic route optimization—which maximizes efficiency and reduces costs per delivery for the 3PL or carrier—in order to execute on delivery promises and provide accurate delivery ETAs to end customers. These customers, too, get a boost, as the tools help to give them increased scheduling and rescheduling control.
Route optimization tools also help with sustainability goals: by achieving maximum delivery efficiency, 3PLs and carriers can cut fuel costs and reduce miles driven annually, which ultimately reduces carbon dioxide emissions per year as well as a company’s overall carbon footprint.
The predictive visibility that 3PLs and carriers in the last mile gain from these tools allows for continuous optimization of delivery operations across the whole supply chain. That, ultimately, leads to exactly what end customers want: reliable, on-time delivery of their purchases. And, in turn, creating that value for customers is exactly what shippers expect—and demand—of their 3PLs and carriers.
For more information on using technology to optimize delivery operations, check out this recent webinar here to hear how global 3PLs/carriers efficiently balance customer experience and operational costs by leveraging intelligent delivery management tools.