We live in a world where everybody wants everything immediately, placing tremendous demands on delivery companies. Increasingly, the spotlight is on the last mile, and the challenges this creates for suppliers. This blog takes a look at some of the issues, and the solutions being evaluated to overcome them.
The last mile challenge
Last mile refers to the final stage of delivery, where the order is couriered to the end customer. It is commonly affected by issues such as short- and same-day delivery timeframes, the cost of fuel, last minute route changes, failed deliveries, and the need to meet customer expectations. The last mile is frequently the most expensive and time-consuming part of the shipping process, accounting for as much as 53 % of the total shipment costs.1 Customers’ expectations are high, with fleet managers under pressure to meet delivery deadlines.
Timely and reliable delivery is the cornerstone of success, playing a vital role in ensuring customer satisfaction and repeat business. Customers expect fast and flexible delivery of their orders, at a time and place that is convenient to them. Late, damaged or undelivered orders can have a significant impact in businesses, driving custom elsewhere. In 2023, it was reported that 83 % of customers expected a guaranteed delivery date, and 80 % a specified delivery time slot.2 This leaves very little room for error in last mile logistics. The last mile delivery market is flourishing, with an estimated growth of 15.62 % between 2022 and 2027.3
Looking to the future
Technological advances will undoubtedly play a vital role in meeting evolving customer expectations, with drones and automated vehicles showing great potential to enhance the last mile delivery model. Predictions from top automative companies anticipate that traditional vehicles and methods of delivery in both urban and rural areas will be outdated within the next decade,4 based on the timelines for autonomous vehicles. The increasing focus on environmental challenges and sustainability is set to change the landscape too, with carrier networks, delivery methods and vehicle requirements needing to adapt to meet new regulations designed to combat climate change. Let’s take a look at some of the recent trends that are most likely to be adopted.
Sustainability
Reliance on vehicles powered by fossil fuels contributes significantly to heightened emissions and environmental strain, compounded by the growing demand for home delivery, which adds to traffic congestion. Initiatives such as electric and hybrid vehicles, and bike and on-foot couriers, could transform last mile deliveries. It is more than 20 years since FedEx became the first delivery company to use an electric vehicle. In 2003, it became the first delivery company to use hybrid vehicles for pickup and delivery, and now plans to convert its entire parcel pickup and delivery fleet to electric vehicles by 2040.5 Today, it has been joined by numerous other companies that are adopting zero-emissions goals at an extraordinary scale and pace, helping to reduce emissions and lessen traffic congestion, while spearheading improvements in delivery efficiency and customer satisfaction.
Swifter parcel delivery
The ability to deliver quickly is a key driver for customers who want to receive their order as fast as possible, with 78 % of purchasers prioritising suppliers able to deliver within two days.6 Strategically located, localised hubs housing larger stock levels of the most commonly ordered products – complemented by streamlined shipping processes that incorporate reliable route planners – enable faster processing and dispatch of goods. Telematics and GPS tracking technology are important contributors to this, enabling route optimisations for quicker deliveries. But that’s just part of it. Think how often you check your phone when expecting an Amazon delivery. Timely, accurate, real-time tracking information is a must.
Drones
Drone deliveries are no longer a dream but a reality, with companies such as Amazon trialling the technology as a way to overcome the limitations of conventional delivery methods; Prime Air drones7 capable of delivering packages weighing up to 2.2 kilograms (5 pounds) are set to be deployed in the UK, Italy and three US locations in the near future. However, while drones overcome many issues associated with the last mile – such as traffic congestion, deliveries to remote areas and the demand for rapid delivery – they also give rise to concerns over airspace management and privacy, which must be addressed.
Autonomous vehicles
One of the biggest costs associated with last mile delivery is drivers, making the use of autonomous vehicles an extremely attractive proposition for suppliers. Investment in these technologies is continually growing, with autonomous delivery methods – for example, the use of small, automated vehicles to deliver parcels in urban areas8 – undergoing development and real-world trials.
Artificial Intelligence, robotics and predictive analytics
Artificial intelligence (AI) solutions are proving an asset for last mile logistics, helping companies to optimise delivery routes, predict demand, allocate resources and lessen the environmental impact of their deliveries. Cognitive robotics – robots equipped with advanced AI and natural language processing capabilities – has potential applications in last mile delivery, while predictive analytics can optimise routes based on traffic patterns, resulting in shorter delivery times and enhanced efficiency.
Smart packaging
Artificial intelligence (AI) solutions are proving an asset for last mile logistics, helping companies to optimise delivery routes, predict demand, allocate resources and lessen the environmental impact of their deliveries. Cognitive robotics – robots equipped with advanced AI and natural language processing capabilities – has potential applications in last mile delivery, while predictive analytics can optimise routes based on traffic patterns, resulting in shorter delivery times and enhanced efficiency.
Technological advances require dependable connections
Novel technologies undoubtedly have a major role to play in enhancing last mile deliveries and minimising their environmental impact. The use of industry leading power and data connectors from a company such as Bulgin is central to success in the supply chain process, enabling the adoption of innovative approaches to overcome the last mile challenge and ensure customer satisfaction. Careful choice of both supplier and connectivity solutions is the pathway to successful implementation of technologies to overcome the challenges of last mile delivery.
Get in touch today to find out more about Bulgin’s range of environmentally sealed connectors and components.
References
- https://www.merchantsfleet.com/industry-insights/what-is-last-mile-delivery
- https://www.ryder.com/en-us/insights/blogs/last-mile/last-mile-delivery
- https://www.ryder.com/en-us/insights/blogs/last-mile/last-mile-delivery
- https://www.pwc.co.uk/services/consulting/operations/the-last-mile.html
- https://www.fedex.com/en-us/sustainability/electric-vehicles.html.
- https://retailtechinnovationhub.com/home/2023/11/24/commercehub-research-consumers-expect-fast-online-delivery-but-many-not-willing-to-pay-for-returns
- https://www.aboutamazon.co.uk/news/operations/photos-of-amazons-new-prime-air-drone
- https://www.therobotreport.com/nuro-unveils-third-generation-autonomous-delivery-vehicle
