Companies are constantly working on improving home deliveries, and of course, at the same time they want to make costs more efficient. It is important to consider that one of the highest operating costs is the last mile, which represents up to 53% of the shipping cost.
We are going to share with you the challenges of the last mile and how to identify that you need advice to optimize it. You will be surprised to know that it is a neuralgic point for a large number of companies.
Challenges that companies face in the last mile
Let us start by defining what the last mile is and why it is so complex and expensive for companies. The last mile is the delivery process to the final customer (from when it leaves the warehouse or Distribution Center, until it is delivered to the customer).
Last-mile delivery is expensive for companies, since it is generally carried out in cities, where there are many factors that cannot be controlled, such as traffic, road disturbances and, in general, the chaos of the city, coupled with complexity due to different packages sizes.
These are some of the main last-mile challenges faced by shipping companies:
● Different package sizes and different delivery addresses. This complicates the optimization of the loading area for vehicles, which implies making a greater number of trips to deliver all the packages.
● Complex cities. In the city there are several factors that cannot be controlled, such as traffic, protest, road accidents, which means that the projected delivery plan is not fulfilled on time.
● Vehicle breakdown. The care and good maintenance of vehicles is essential to prevent them from breaking down in the middle of a delivery, but vehicle accidents cannot be prevented. This implies having to change the unit to deliver the packages and consider the increase in the cost of gasoline and units to use.
● Insecurity of land routes. Unfortunately, both the cities and the country´s highways are not safe, which is making night transport unfeasible, and they have to travel during the day, when there is more traffic.
● Efficiency in delivery planning. Not having a system that helps you plan and streamline routes will increase delivery costs.
● Errors in orders: According to AMVO, a growth of 11% is expected to be achieved from 2021 to 2025 in online purchases and consumption. However, one of the most common complaints that arise within the purchasing sector is about incomplete orders or with errors, as well as damaged packages.
Having a well-defined and aligned picking strategy is a key weapon to guarantee dynamic and efficient operations that successfully meet consumer demand.
How to know that you need advice to improve last-mile processes?
We have prepared this value guide, which will help you identify if you need an intervention in your last-mile operations.
1. Review the delivery complaints indicator. If you have a compilation of complaints, you will know with certainty the claims issued by your customers. We recommend having a person who provides timely follow-up, it is crucial.
2.- Be clear about your transportation costs. In the same way, do a complete analysis of your transport costs, which will allow you to be more accessible or update them.
3.- Be clear about your transportation costs. In the same way, do a complete analysis of your transport costs, which will allow you to be more accessible or update them.
4. Visualize reverse logistics KPIs. If you document and aim to improve your reverse logistics processes, your overall operation will go much smoother. Reverse logistics is inevitable, we recommend you anticipate possible scenarios, especially when there are high volume seasons.
5.- Do a satisfaction survey with your customers. Constant listening gives you measurement, and with it, improvement. If you carry out surveys, you will know how your customers perceive you, and if there are areas of opportunity.
6. Evaluate the infrastructure investment. Make sure you have a correct picking system, to ensure that the products reach the final consumer in a timely manner. Picking technologies guarantee accuracy in orders, making them reliable, safe and fast.
* If you have more than three points without attention or with uncertain flows, we recommend you take a free consultation with one of our specialists
In order to reduce last mile costs and improve the entire infrastructure surrounding the process, there are technological solutions such as MicroFulfillment Centers and Dark Stores.
Do not miss our next blog (Here will go the next blog, with the technologies - G.I.Eicom
solutions), where we will share the most competitive solutions, from when a customer places an order, until they receive it in their hands.
