Last-mile logistics is the final stage of the fulfillment process, when products move from a fulfillment center or distribution point to their final destination. This stage is often one of the most complex and costly parts of delivery, with traffic, inefficient routes, fragmented visibility, and changing customer requirements contributing to higher transportation costs and longer delivery times.
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 processes. 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 faces high costs and frequent delays because it combines complex routing, lower shipment density, tight delivery windows, traffic, and variable destination requirements. These challenges can make the final stage of fulfillment disproportionately expensive, with last-mile logistics accounting for 53% of shipping costs of shipping costs for the average product.
- Increased shipping 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.
How Route Optimization Reduces Last-Mile Delays and Costs
Route optimization helps reduce last-mile delays and costs by identifying more efficient delivery routes and adapting them as transportation conditions change. 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.
Real-Time Tracking and Predictive Logistics
Real-time tracking and predictive tools give businesses greater visibility into last-mile operations, helping teams identify delivery issues, reduce errors, and anticipate delays before they disrupt fulfillment.
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.
Improving last-mile operations starts with knowing where goods are, how they’re moving, and where delays or exceptions are developing. Surgere combines IoT technologies such as RFID, Bluetooth, UWB, and WiFi with AI-powered software to provide real-time logistics intelligence across transportation and fulfillment operations. 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.
