For businesses with a delivery component, transporting products to the end consumer can be the most expensive and time-consuming segment of the entire supply chain.
Here is where last mile delivery optimization comes in. Among other things, it can help improve the customer experience, achieve faster deliveries, reduce your carbon footprint, and lower operating costs.
What Are Some Common Last Mile Delivery Problems?
An average of 68.5% of transportation and logistics companies in the U.S. and Canada report that final mile delivery is the most inefficient process across their supply chains. This can be due to several reasons, including:
- High delivery costs
- Outdated technology
- Failed or late deliveries
- Lack of visibility into the delivery process
- Poor route planning resulting in complex routes or extra stops
These problems are more common — and costlier — than you may think. Around 5% of last mile deliveries fail, and just one such incident costs $17.78 on average.
10 Steps to Last Mile Delivery Optimization
Luckily, there are measures you can take to improve the final mile delivery process.
1. Offer Flexible Delivery Options
Consumers these days expect flexible options such as same or next-day delivery and different delivery methods, plus free shipping as a matter of course. If you do not offer such services, some customers may abandon their carts.
2. Enable Order Tracking
Real-time order tracking can go a long way toward improving customer satisfaction. To that end, let your customers know when their orders have been received, processed, shipped, and delivered — or if there will be a delay. You should also consider installing GPS and telematics devices in your delivery vehicles to enable customers to track their packages in real time.
3. Ensure Supply Chain Visibility
Improving visibility enables you to build a connected network of suppliers, logistics service providers, end consumers, and other stakeholders across the entire supply chain. In turn, this allows you to collect and share delivery information along the network and address potential problems quickly and efficiently.
4. Attach Conveyors to Trucks
Attaching conveyors directly to the delivery vehicles in the loading dock area can help speed the loading process. The quicker packages get into the trucks, the sooner they can make it to their final destination.
5. Locate Fulfillment Centers Closer to the End Customer
Choose fulfillment centers located close to the end customer to lower shipping costs and shorten delivery times. For best results, leverage a combination of carton flow systems, tilted shelving, and storage racks to optimize inventory and order picking operations. And if you have brick-and-mortar stores, use them as fulfillment centers.
6. Optimize Warehouse Layout
Make your warehouse layout work for you instead of against you. For instance, you can place labels on storage racks to ensure that pickers can identify items quickly and easily or install flow racks to deliver items to pickers and reduce walk times.
7. Train Third-Party Delivery Providers
If you outsource any part of the delivery process to third-party vendors, be sure to set clear expectations and train them on your policies.
8. Consider Crowdsourcing Delivery Drivers
In 2018, Walmart introduced Spark Delivery, its new last mile grocery delivery service. Freelance drivers could use a crowdsourced delivery platform to pick and deliver Walmart orders straight to the end customers.
Spark soon took off and ended up being a major success for Walmart, and for good reason. It can be much cheaper and easier to find “gig” drivers as opposed to hiring in-house staff.
Of course, large corporations like Walmart can afford to recruit drivers directly. Still, smaller businesses may also join the gig economy through an intermediary like Uber, Shipt, Instacart, Postmates, and more.
9. Have Proof of Delivery
Keeping proof of delivery for all orders helps keep customers informed. More importantly, it can cover your back if a customer claims their delivery failed or the package was damaged.
To document delivery, you can ask the customer to sign through an app or using physical paperwork. Alternatively, you can have the driver scan a barcode or take a picture or video of the delivery.
10. Use Delivery Route Optimization Software
To plan optimal routes, you need to consider multiple — and variable — factors such as:
- Traffic congestion
- Construction closures
- Traffic accidents
- Physical obstacles on the road
- Alternative routes
- The customer’s location
This process can be incredibly complex and time-consuming. Luckily, these days you can leverage the power of AI and use delivery route optimization software to do your last mile routing for you.
Last Mile Delivery Optimization with Routyn
Our AI-powered logistics and transportation software provides an easy and efficient way to optimize last mile deliveries, plan better routes, and manage your fleet. On average, our clients benefit from:
- 25% reduction in fleet operating costs
- 95% decrease in planning time
- 10% reduction in CO2 emissions
To learn more about what Routyn can do for your business, simply drop us a line. We’ll be in touch shortly!