Last Mile Logistics the final frontier!

Last Mile Logistics Overview

Last Mile Logistics the final frontier!

The final mile, as it’s commonly referred with logistics companies is the last step in the delivery process. The last mile tracks the end of the line for the product’s journey. We’ve come to call these last mile journeys as ending points.

Once a product is ordered, the customer is relentless tracking their purchase large or small. They demand communication each step of the journey until it completes the trip when it arrives at its final destination.

While it’s easy to consider the last mile as a single mile, 5280 feet or 1.6 km. But the last mile is often farther – perhaps a few blocks or even a hundred miles. The common factor is where it ends or terminates (an electrical reference). The journey of an item usually begins at the factory where it is packaged and shipped to a warehouse or distribution center where it is then shipped to the retailer before it finally leaves the retailer or company to head to the customer.

Using a simple shipment from retailer or ecommerce company to customer, we can learn about this last mile first hand as most of us use mail order, direct to customer and ecommerce services several times a week.

Growth & Profitability

2016 Mercedes Benz Vision Van with Drones BlogAccording to McKinsey and Company, parcel shipments are valued at more than $83 billion, and the growing e-commerce market will double in value in roughly 10 years in mature markets. The size of this market will continue to increase as more convenience and shipping options are demanded by the end consumer. It’s here is the last mile logistics where shippers of all sizes see future growth and profitability.

The “last mile” – the final segment of a product’s journey from manufacturer to customer – isn’t a new consideration for businesses, but it’s an increasingly important one as customers look for faster, more convenient delivery options and expect more from their shopping experiences.

– Ted Choe, Scott A. Rosenberger, Mauricio Garza, Deloitte Consulting LLP; Wall Street Journal 9/12/17

Some of the goals for last mile logistics include these trends:

– delivering more products to consumers faster and cost-effectively
– pricing new delivery services including same-day or instant delivery
– new delivery methods including drones, automated vehicle and crowd sourced delivery

While Amazon continues to innovate their last mile, small and mid-sized shippers are also looking for ways to leverage the final mile to provide new services and sell additional items currently not easily sold or offered today.

The market is addressing the growing pains along the last mile in new ways never before considered. Outside factors, trends and technology including government regulations, fluctuating fuel prices, new technologies and crowd sourced delivery services all contribute to a logistics revolution. Some services are poised to offer custom, one-to-one shipping services while others will leverage bulk deliveries to bring down their cost that is passed on to the end customer. Capacity is a major influencer in pricing and will always push against price and convenience.

Drone DeliversFuture technology to ease capacity include:
– Drone deliveries
– Delivery lockers
– Driver routing optimization
– Delivery to store

For several years, larger retailers like Walmart or Sears have improved their ship to store offerings making it convenient for customers to order online (say during lunch) and easily pick up at the store on their way home. Amazon recently purchased Whole Foods and will look to innovate the in-store and store-to-home service offerings.

The final mile convenience

Delivery RobotThese final last mile logistics solutions will provide greater convenience in the future and with convenience often comes greater cost. As we’ve seen over the past several years, those retailers who are willing to absorb more delivery cost against profit for greater share of the pie will be on the forefront. Those who are not will be forced to imitate and adapt.

Consumers demand innovation. They demand change and demand convenience. Those companies and retailers that work together to address the challenge will be poised to grow their business and marketshare. It’s an exciting time to be working on last mile logistics solutions.