Matija Pavelić, Director of strategy and development
We were all involved in the last mile delivery process at some point of time and we know it. For a start, we will define last-mile delivery as the final step of the delivery process from a distribution center or facility to the end-user. Last-mile delivery is becoming more important than ever before due to the enormous rise of online orders and e-commerce sales. Nowadays, there is a significant boost caused by COVID-19 pandemic.
Many retailers put focus on last mile delivery because exceptional service levels serve as key differentiators from the competition from a customer’s point of view. Because consumers can easily shop anywhere. Exceptional service allows retailers to gain market share and build brand loyalty.
There are important elements involved in the last mile delivery process that customers are looking for:
Fast delivery – Consumers always demand fast delivery service, mostly preferring same-day delivery.
Precise order tracking – Transparent flow of information is crucial for consumers. They always want to know the status of their delivery.
Security and insurance – Considerable risk is involved when consumers decide to leave their purchased goods and trust you to deliver it. It’s important to provide some kind of a guarantee that it will arrive safely. It’s always attractive to provide some sort of insurance if the package is mishandled.
Convenience – Customers expect personalized delivery, maybe at a different location or to a different person. Forcing customers to pick up their shipment at the post office or some other location is a big failure in service.
Technology Makes a Difference
Most of today’s modern mile delivery strategies are made possible with advanced technologies. Technologies such as route planning and execution, mobile, telematics and data analytics. From the start of the buying process to the post-delivery stage, advanced last mile delivery solutions can change the customer experience, generate incremental revenue, and reduce delivery costs. Not only do these advanced capabilities make a difference, but the information generated is equally important for improving the whole process.
Must-have features and functionalities of state-of-the-art last mile delivery software are:
Automated planning and optimization Finding the optimal delivery route plan is not an easy task. The optimization algorithm must find the best plan by examining and eliminating millions of alternative route plans. Depending on the problem, there is a variety of resources based on which the optimal route plan is generated (such as customer address, delivery window, available drivers, acceptable truck types, available routes, traffic conditions, etc.) Route optimization software must support all distribution models including single pick up-multiple drop and multiple pick up-multiple drop strategies. This not only helps save time and money but also preserve fuel and reduce delivery costs.
Real-time tracking Real-time GPS tracking on a map interface is a great tool for supporting everyday operations. The GPS tracker will inform the customer if the driver has taken any unscheduled breaks, crossed speed limits, or if anything else has happened that results in increasing the last mile delivery time. With a GPS tracker, any anomaly will be detected, and the relevant persons will instantly be notified to take proactive and corrective actions. Some very helpful functionalities allow you to zoom in and out of vehicle locations on demand, while using various data segmentation and map views to stay connected to your overall operations.
Real-time Estimated Time of Arrival (ETAs) calculation Customer expectation is also a critical factor in delivery performance. However, there are proactive methods, like using real-time GPS, to make sure the customer is prepared to receive their delivery. By providing the customer with real-time notifications with ETAs, they are made aware well in advance of the delivery. Automated delivery notifications can proactively reach customers to notify them of a delay or even allow them to reschedule the delivery if necessary.
Performance Analytics Strong analytics of last mile delivery identify areas in which the process could be improved, spot trends, and improve individual performance. Analytics helps to see key performance data, which reveals inefficiencies. Such functionality allows the creation of fully customizable reports with metrics such as fuel consumption, distance traveled, fleet idle time, service mileage, and routing details. It also allows for reports to be generated on demand or automated on a periodical basis.
Support for different touchpoints The chosen last mile delivery solution must support multiple touchpoints from a standard desktop PC to a tablet or a smartphone. It also needs to fulfill all the needs of different stakeholders, from dispatchers, drivers to customers. The drivers are the most important element of the process. Using real-time GPS tracking and intelligent dispatching solutions can help dispatchers understand when drivers stray from the plan, so they can correct the driver or address the issue on the ride. Mobile apps can help drivers remain on the route, keep the delivery times on track, and provide route productivity in real-time.
Digital proof of delivery This whole process requires several interactions with customers. Each interaction can be fully digitalized, from payment methods (Cash on Delivery COD), electronic proof of delivery as image, digitalized signature, timestamp and geo-coordinates.
The growth of e-commerce and omnichannel retailing and the ever-increasing consumer expectations for fast and free delivery have increased the need for last mile logistics providers. New business models, emerging technologies and collaborative measures using crowdsourcing applications are pushing the way for companies to optimize their supply chains. The last mile delivery will continue to be the most complicated step of the logistical process.
But what do you need in terms of an outsourcing partner that can help you with development? We created a checklist for you to consider: