What is Final Mile Delivery?

Many of us take full advantage of delivery services that fulfill our product orders without really thinking about how the packages finally end at our doorways. Final mile delivery, which is also known as last-mile delivery, is essentially the last step or leg of a product’s trip and comprises the movement of goods from a transportation hub to a final destination at which point the goods are finally delivered to the end customer.

In other words, it is a product’s journey from a warehouse to the doorstep of the end customer. 

The final mile is a key step to achieving high customer satisfaction and often the most time-consuming and costly phase of the shipping process. Notably, 3 billion packages are expected to flow through America’s shipping infrastructure this holiday season, according to The New York Times. This comes to be about 800 million more than last year, as well as an estimated 7.2 million more packages per day than the system has the capability of handling.

Supply chain management and transportation planning involve following the goods that are delivered to a central distribution location by different transport methods. The most efficient and cost-effective method of moving goods is often shipping via freight rail systems and container ships. This involves the arrival at a freight location or port, after which they need to be transported to their endpoint. This is why last-mile delivery tracking is very important and allows companies to follow deliveries quickly and competently. Once the shipments reach centers of distribution, they are loaded into other smaller vehicles or vans for delivery at the end of their journey. This last step of the delivery process is extremely critical and should be done well for timely and accurate shipping. 

Last-mile delivery is by far the most expensive part of the fulfillment chain and can be a challenge for employees in transportation and logistics. The cost of shipping a package varies on origin, endpoint, service, weight, etc. On average, Priority Mail® is now $9.30. UPS Ground on the other hand, which is more expensive than USPS due to fees and surcharges, is $11.71. Therefore, the cheapest way to ship large, light packages is generally USPS Priority Mail.

Last-mile delivery is most expensive for a number of reasons such as:

• Lower usual speeds – drivers spending more time on the road, which turns into fewer miles-per-gallon
• More stops lead to more idling and downtime – driving and stopping to drop off packages leads to increased idling 
• Failed deliveries when distributing the goods 

Final Mile Delivery Drivers

There are over 1,305,000 Delivery Drivers currently employed in the United States. 17% of all delivery drivers are women, while 80% are men.

Drivers may use different types of suitable vehicles, whether they are trucks or vans to guarantee a competent fleet. These vehicles will help the fleets improve their business requirements, and their size enables them to accommodate the activity especially during high-demand seasons such as the holidays and other significant celebrations throughout the year.

There has been a spike in last-mile delivery activity, and companies providing the service need to have capable drivers to effectively meet rising customer expectations. Online shopping has experienced a significant increase in package deliveries. In December 2020, Parcel Pending by Quadient processed nearly 4 million packages– a 46% increase compared to 2019. “Last year was unlike anything we’ve ever seen before in terms of total online purchases and year-round, high package volumes,” stated Lori Torres, Founder of Parcel Pending by Quadient. The USPS will deliver about 800 million packages this holiday season. 

As consumers progressively use eCommerce for all their shopping essentials, prompt fulfillment and distribution are paramount. Final mile drivers and staff create a safe and confident experience providing door-to-door deliveries. It’s worth mentioning that in today’s world, contactless experiences are not only wanted but are also likely to continue beyond the Covid-19 pandemic. 

Drivers’ routes typically involve complex paths, and sometimes finding the best route is an actual challenge. Some of last-mile transportation and delivery difficulties are real-time visibility, operational control, and efficiency, consumer anxiety, shipment status calls, as well as everyday operational clarity for drivers. Tracking the number of deliveries, fuel, idling, maintenance, etc. to improve on-time deliveries and customer satisfaction is crucial. 

What is last-mile delivery service?

Last-mile delivery service is the last step of the process to take a shipment from a distribution location to the customer. Fleet managers are making operational changes to meet the increased demands of last-mile delivery while maintaining trying to maintain cost efficiency. This is the most expensive part of transportation logistics for many businesses. McKinsey has reported that parcel shipment is expected to double its current value of $83 billion within 10 years. Globally, final mile shipping is expected to become a $55.2 billion industry by 2025, up from $30.2 billion, according to a recent report by Roadie.

What problems do last-mile delivery fleets have with drivers?

In addition to this being a costly area for businesses, the needs are difficult to predict. Therefore, planning can be unrealistic. Although supply chain management has improved greatly with improved technology, systems, and operational efficiencies, last-mile delivery continues to create some of the biggest challenges. Last-mile logistics account for 40% of the supply chain costs. 

The last stop for delivery is constantly changing which makes routes change daily. This makes it harder to predict the time and resources needed to meet a company’s constantly changing needs. Additionally, expectations have changed over time; consumers and businesses alike want their deliveries to arrive quickly, including same-day delivery.

Improving recruitment strategies, providing excellent driver training, and implementing the appropriate technology can help combat these problems. It will also reduce the churn rate and increase employee satisfaction. Companies are often focused on the customer experience, but sometimes lack focus on the employee experience. In an industry that is so hard to staff for, this is an important area of concentration. 

Legacy shippers can’t keep up with last-mile drive demands

FedEx, UPS, USPS, DHL are the major players that have previously delivered 95% of all e-commerce orders in the United States. With increasing demands and the challenges born from the pandemic, they haven’t been able to keep up. Refrigerated last-mile delivery of perishable goods has been 2% of online grocery sales but is expected to reach 20% by 2025. It’s even more critical that these products have fast and omnichannel options and perishable products are at a higher risk for loss.

How Companies Ensure Successful Last-Mile Delivery Tracking

Last-mile delivery tracking is the information provided to the end customer. This information shows the status, and often the location of a package right from the moment the shipping information is sent to the carrier. Today’s consumers have high expectations and demand accurate and detailed real-time tracking communication. Allowing companies to have online information at their fingertips ultimately achieves customer satisfaction for last-mile delivery businesses, customers and consumers alike. It is a win-win situation, which could be confirmed and improved by surveys, usually sent to recipients right after the deliveries reach their final destination. 

Companies know the importance of safeguarding customer satisfaction, and how successful final mile delivery tracking results in achieving and maintaining brand reputation. This is why the selection of last-mile drivers and delivery providers is so important to optimize every step of the order fulfillment process. Whether shipping electronics, toys, furniture, or appliances, the distribution of products may represent a personal point of contact for consumers. Thus, successful final mile deliveries logistics help create a positive lasting impression that turns into repeat business.  

Businesses are confronting the need to deliver a perfect final mile delivery experience and leveraging last mile solutions. Last-mile tools empower them to cater to the ever-increasing consumer expectations and achieve operational efficiency. A solution that keeps costs under check provides a range of operations like delivery scheduling, task allocation, routing, real-time tracking, tracing and more. 

GPS tracking safeguards final last-mile delivery and allows fleet owners and managers to see where delivery vehicles and drivers are, save on fuel cost, get live traffic views, and provide customers with accurate ETAs plus proof of service. It helps businesses deliver the perfect final mile experience at optimal efficacy. Consequently, a total transportation solution takes the burden of merchandise delivery off companies. Consumers love real-time order tracking as it reduces their concern, which contributes to a great customer experience. A company’s survey respondent shared an example of a time that live tracking gave them peace of mind, saying, “We live in a townhouse development where package security is a concern. I received a text notification about delivery of a high-value item, which allowed me to call my neighbor to secure it.”

GPS Trackit offers innovative technology that provides companies the right data to make quick decisions, with end-to-end visibility and tracking for the transportation and delivery of orders. If you’d like to learn more about how GPS Trackit can help to improve safety, increase productivity and reduce costs for your business, speak with one of our knowledgeable Fleet Advisors at 866-320-5810 or get a quick Custom Quote.

Sources: 

https://en.wikipedia.org/wiki/Last_mile_(transportation)

https://campaigns.ryder.com/

https://www.averittexpress.com/public/services/retail/final-mile.jsp

https://www.businessinsider.com/last-mile-delivery-shipping-explained

https://www.truckinfo.net/research/trucking-statistics

https://www.parcelpending.com/blog/package-delivery-statistics/

https://www.pitneybowes.com/us/shipping-and-mailing/case-studies/shipping-news-2017-holiday-season.html

https://www.nytimes.com/2020/12/05/business/ecommerce-shipping-holiday-season.html