Last mile logistics is the final stage of the fulfillment process before the product reaches the customer, and it creates the most difficulties for companies — and the highest costs too. A wide range of factors can hinder a supplier’s efficiency as they attempt to deliver their parcels to customer endpoints, increasing transportation costs, prolonging shipping times, and dampening customer satisfaction as a result. Fortunately, with the right technology and strategies in place, companies can overcome these hurdles and streamline their delivery processes.
This article will look at the main obstacles present in last mile logistics, and how supply chain automation is being used to overcome them. We’ll show how real-time tracking solutions can reduce errors and inefficiencies, how route optimization software can reduce carbon emissions and their associated transportation costs, and how a partner like Surgere offers solutions for manufacturing logistics, including at the last mile.
What Is the Last Mile in Logistics?
Last-mile logistics is the stage of the order fulfillment process where products move from the fulfillment center to their final destination. In business-to-business (B2B) order fulfillment, the last mile occurs when inventory is shipped from the warehouse to the factory, instead of the customer’s front door. Complex order fulfillment requirements, traffic delays, and high fuel consumption can all contribute to higher costs at this leg of the supply chain, so suppliers must continually find new ways to improve their last-mile processesdd. That way, their products can complete the fulfillment journey and exceed rising customer expectations.
Why Last Mile Delivery Faces Delays and Inefficiencies
Last-mile delivery is often the most difficult portion of industrial supply chain management, as it creates multiple costs that are less prevalent at other legs of the journey. Coordinating delivery times across multiple locations, meeting tight deadlines, and fulfilling complex orders can all create bottlenecks as the product is about to reach the customer, which is why last-mile logistics accounts for 53% of shipping costs for the average product. Some other ways that last-mile delivery can weigh down your supply chain are:
- Increased transportation costs. Dense traffic, route overlaps, and long hauls to rural locations can all increase fuel consumption while hindering your fulfillment efficiency.
- Lost inventory. Fragmented tracking systems can lead to order inaccuracies or missing assets, causing suppliers to lose profits from misplaced inventory and miss out on potential sales opportunities.
- Lower efficiency. Last-mile deliveries have a lower shipping density than those completed at other phases of the supply chain, as suppliers may fulfill relatively few orders at each destination. This reduces your broader operational efficiency, forcing you to spend more to fill each order than necessary.
Inefficiencies at the last mile can also impact brand loyalty. Prolonged shipping times or missing orders damage the customer experience, causing some customers to take their business elsewhere. Such lost sales not only tarnish your brand image, but eat into your profitability and give your competitors the upper hand.
Route Optimization Tools That Cut Delays and Waste
Despite the difficulties that the final stage of the fulfillment journey presents, there are several last-mile delivery logistics solutions that suppliers may implement to boost their efficiency. For example, real-time transportation software lets both suppliers and customers track the movement and delivery of an expected product, giving them valuable insights into the exact location and condition of their goods. This also helps to ensure that all orders are delivered on time and under budget, and helps identify any operational barriers to effective order fulfillment.
Dynamic routing software also enables shippers to adjust their routes according to changing transportation conditions, such as traffic jams or a higher volume of orders in a certain location. These optimizations let your fleet travel fewer miles, resulting in fewer carbon emissions, lower fuel costs, and higher profitability.
Smarter Tracking and Prediction for Fewer Errors
Last-mile logistics software works in tandem with tracking devices to deliver real-time fleet visibility. This combination helps suppliers reduce shipping errors, and facilitates more accurate supply chain predictions.
For example, internet of things (IoT) devices such as radio frequency identification (RFID) tags, global positioning systems (GPS), Ultra-Wideband (UWB) devices, and other IoT solutions enable real-time asset tracking, identifying the exact location of each product and reducing order inaccuracies. Driven by the data that this hardware creates, predictive tools such as real-time transportation visibility platforms (RTTVP) and fulfillment management systems recommend methods for improving your shipping efficiency, optimizing your route and accounting for factors such as weather delays or congestion.
By implementing the full range of logistics solutions, suppliers can reduce dwell time at destinations, avoid missed ETAs, and ensure that even the most complex deliveries are completed according to their requirements. Leveraging micro-fulfillment centers in urban locations can also bring products closer to their destinations, creating a shorter, more robust supply chain.
How Surgere Helps Optimize Last Mile Logistics
From rising transportation costs and traffic delays to strict customer expectations and customs requirements, the modern fulfillment landscape has created a host of logistical challenges that suppliers must overcome — and many of them occur at the last-mile layer. To overcome these barriers, companies will need to craft a comprehensive logistics strategy that includes hardware and software solutions. Classic hardware such as RFID and bluetooth tags enable real-time asset tracking to reduce fulfillment inefficiencies, while software such as order fulfillment platforms feature predictive analytics capabilities so that companies can better plan out their routes. Micro-fulfillment centers located in urban areas further reduce the distance traveled to customer endpoints, and electric vehicles can reduce carbon emissions, minimizing logistics costs at the same time.
Surgere engineers, develops, and deploys the logistics solutions that solve today’s supply chain challenges. We blend the leading IoT technology and tagging equipment such as RFID, bluetooth, UWB, and WiFi tools with AI-powered logistics software to elevate our clients’ real-time logistics intelligence. The result is greater visibility over your supply chain, 99.9% data accuracy, and a competitive advantage in your logistics processes from start to finish.
Ready to make better data-driven decisions about your supply chain? Contact Surgere today.
