The Challenges Of Last-Mile Delivery

As e-commerce continues to grow rapidly, efficient delivery services become critical for both happy customers and successful businesses.? The last mile, which is the final step, where a package reaches the customer's door, is the most complex and expensive part of the delivery process. This final stage presents several challenges that can have a big impact on the overall delivery experience.

The last-mile delivery market is growing rapidly and is expected to grow at a Compound annual growth rate of 8.13%, reaching $288.9 billion by 2031.

This article takes a closer look at the complexities of last-mile delivery. We'll explore the challenges faced by both businesses and consumers, including inefficient route planning, the environmental impact of deliveries, and the issue of returns.

What is Last-Mile Delivery:?

When a business receives an order and gets the goods ready for shipping, the countdown starts. Next, it works with an outside logistics provider to handle the delivery, or it uses its own drivers to deliver the order straight to the consumer.

What contributes to the High Costs:?

Last-mile delivery expenses are high, accounting for an estimate of 40-50% of total shipping costs due to all the factors that contribute such as delivery driver wages, fuel costs, labor costs, vehicle costs, shipping costs, packaging costs, return costs and delivery vehicle maintenance costs.

All these costs increase with time and distance driven. They are also higher when there are inefficiencies in delivery operations. Some examples of that would be failed deliveries that have to be rescheduled, traffic congestion and idling, or lack of information leading to longer time at each stop.?

Inefficient route planning:?

As previously mentioned, last mile delivery does not involve large vehicles transporting cargo between distribution centers. Instead, it's a lot of individual products traveling to different locations. As a result, determining the best delivery route becomes essential to the entire last-mile logistics process. Delivery times each day might be increased by many kilometers and hours due to inefficient routing. Any efficiency increase from route optimization is therefore a significant benefit.

Environmental impact:?

One of the major obstacles in last-mile delivery is increased emissions, noise pollution, plastic pollution, and traffic congestion. Those can all be attributed to packaging and transportation. However, there are methods to lessen the effect:

• Switching to electric or hybrid vehicles, or bicycle delivery where it’s feasible.?
• Minimizing packaging waste by offering reusable packaging.?
• Use route optimization software to reduce fuel consumption and emissions.

Returns:?

Returns are an unfavorable expense of conducting business online. On one hand, buyers are more inclined to make a purchase if they are aware that they can quickly return an item if they are dissatisfied for any other reason. However, it gets highly costly for the business when up to 25% of all customers return at least some of the things they purchase online. When the retailer covers the cost of having the return picked up and processed, the expenses are very significant.

Since returns are inevitable, particularly for apparel and shoes, an online retailer's best bet is to factor in the expense and streamline the returns procedure. This is one of the situations where hiring a courier or third-party logistics company to do hand pickups might make sense.

Conclusion:?

Last-mile delivery presents a significant challenge in the e-commerce world. Businesses need innovative solutions to tackle rising costs, inefficient routes, environmental concerns, and the complexities of managing returns. However, the future of last-mile delivery is promising. Advancements like route optimization software, the increasing use of electric vehicles and eco-friendly packaging, and a focus on simplifying returns offer exciting opportunities. By embracing these innovations and working together as an industry, businesses can transform last-mile delivery into a smooth, sustainable advantage, creating a positive experience for both themselves and their customers.