The Final Mile Paradox: Enhancing Customer Experience in Last Mile Delivery

By Sara Gonia

You ordered a package from a well-known delivery company a few days ago. It was supposed to arrive today, but it hasn't shown up yet. You checked the tracking number online, and it's still on its way. It's getting late. You're starting to feel frustrated and anxious. You wonder if the package got lost or if something happened to the driver or the truck. Why is it so late?

The final step in the supply chain, also known as last-mile delivery, is crucial but presents significant challenges. Customers expect their items to arrive at their doorstep on time and in perfect condition. However, the delivery process is more complex than a simple journey from the manufacturer to the customer. It involves a web of logistics that can sometimes conflict with the customer experience. The shipping industry has been working to balance customer satisfaction with increasing shipping and delivery costs, but has it found any solutions?

How It All Works

Last-mile delivery (or final-mile delivery, depending on who you're asking) is the end of the supply chain process. The steps preceding it go like this:

• First Mile: The manufacturer distributes an item to a transporter.
• Middle Mile: The item is transported domestically or internationally (through customs and the port or hub storage) to an inland transporter (or B2B) that takes it to a warehouse or fulfillment center.
• Last Mile: A delivery driver picks up the item from the warehouse and delivers it to the customer.

Last-mile delivery has its own set of steps:

1. A customer orders an item, which is tracked through a centralized system.
2. The item is taken from the warehouse to a carrier facility or distribution center.
3. A fleet manager (or the fleet's software) creates a delivery route based on various metrics like the customer's location, scheduled time of arrival, and the deliverer's fuel usage.
4. The item is scanned, and tracking information is sent to the customer.
5. The customer's item is delivered to them.
6. The deliverer creates proof of delivery by signing or taking a picture of the item.

It looks like the shipping industry has the process down pat. But just as with life, nothing is ever that easy. This is where the final mile paradox comes into play.

The Final Mile Paradox

This paradox goes by different names, such as the final mile problem, the last mile challenge, the final mile delivery conundrum, etc. But they all mean the same thing: the customer's expectations conflict with the realities of the supply chain process. Aside from the obvious problems caused by bad weather conditions and shoddy roads, several obstacles can delay last-mile deliveries:

• Large and heavy items need extra time and power to lift or unload.
• Urban areas often have poor traffic conditions, narrow roads, and near-impossible parking, while rural areas have wide, open spaces that take time and fuel to cross.
• The environmental impact of delivery driving is significant. Gas usage pollutes the air and harms nature in the long run.
• Drivers are in short supply these days, meaning current drivers must make more deliveries on route. The same goes for warehouse staff, meaning items take longer to leave the warehouse.
• Theft is on the rise in the logistics industry. Fraudulent carriers and truck drivers have been snatching items during delivery.
• Last-mile delivery is expensive. Complex logistics, the number of staff and technology needed for smooth operations, and high transportation prices add up to excessively high service costs that don't always pay enough to keep the lights on.

We call this problem the "final mile paradox" for a reason. Delivery services put great effort into completing their deliveries on time, but they may still be late or fail to deliver the package. Customers, therefore, will be dissatisfied and turn to competitors for future orders. That's the last thing any business wants.

The Key to Efficiency: Technology

How is the logistics industry tackling this paradox? Part of the solution is embracing progress. Technology has proven to be the lynchpin necessary to combat it. Here are several ways companies have incorporated new technology into their delivery process:

• Tracking hardware and programs: GPS systems aren't just for guiding you to your destination. Modern shipping vehicles have their GPS integrated with tracking technology so that customers can watch their package's journey every step of the way.
• Electric vehicles: Companies have adopted hybrid and electric vehicles as environmentally friendly alternatives to traditional trucks. These vehicles have zero tailpipe emissions, significantly reducing greenhouse gas emissions.
• Robots: Yes, robots can compensate for staff shortages. Companies like Wal-Mart and FedEx also use drones and self-driving vehicles to deliver customer packages.

Shipping companies are also adopting some non-technical trends. For instance, white-glove deliveries involve the delivery person unpacking and assembling heavy or fragile items for the customers. Pop-up and urban warehouses bring delivery personnel closer to customers and reduce transportation costs. There's also hybrid fleet management, where a company uses a combination of in-house and outsourced fleets to increase the number of available drivers.

These are just some popular trends with shipping companies right now. With virtual reality and space cargo technology on the rise, companies may find even more solutions that no one has thought of yet.

Improving the Customer Experience

Balance can take time to achieve. Businesses want to make their customers happy so that they will return. At the same time, businesses do not want to lose all their money attempting to speed up last-mile deliveries. However, last-mile deliveries are the crux of the supply chain. Companies must keep fighting the final mile paradox until it stops being time-consuming. This delicate balance between customer satisfaction and cost is a constant challenge for the shipping industry, but it’s worth undertaking for the sake of successful logistics.?