Last Mile Delivery: Information Quality and Customer Satisfaction

Last-mile delivery is a segment of Logistics activity that works in the latest part of the service chain. That being the delivery leg to the customers who ordered the goods. In the days when service reliability is more important than ever, and most important to customers' happiness. Every Courier, Express, and Parcel (CEP) company understood the need to up their game. We have come across numerous studies in the past, be it companies' whitepapers, scientific research, or even our perception from our own experience managing Logistics: that the better the delivery service is, the more likely customers would contribute positively to our businesses.?

Now, there may be several ways to?articulate Logistics/delivery service impact on customer satisfaction. One of the papers out there that catches my attention due to it's alignment with my views, is Lin X. et al, in their paper?"Examining the effect of logistics service quality on customer satisfaction and re-use intention",?mentioned the?elements needed to shape the customers' perception toward the rendered service. Happy customers, subsequently would re-use the service. So logically maximizing these elements is believed to create occurrences where customers re-use the service.?

These elements namely: Personal Contact Quality, Resource Quality, Operational Quality, Information Quality, and any Customization capability.?

Though there are other ways to measure customer satisfaction, though incepted long ago in 1972 as part of the QFD framework, the House of Quality analysis model is based on surveys, incorporating your own defined elements to measure each impact on satisfaction.?I still personally believe you can still use that framework.?The choice is up to you on which method to deploy upon researching customer satisfaction. But in general, I think we all can agree that top-notch Logistics service does impact Customer Satisfaction. Big time.

Inspired by Lin X. et al, I'd like to illustrate on how 1 element of Logistics Service, may drive customer experience positively. That is Information Quality. Also seems that nowadays technology integration is a buzzword so talking about this won't hurt my digital optimization keywords, lol.

"Information", in the realm of shipping, especially CEP shipping are typically termed as "Shipping Status". It is a set of phrases being used to describe the state or condition of the shipment. The idea is to "tell" the shippers and the consignees about the shipments' whereabouts and conditions.?

Here is why it's important :?

Shippers and consignees can proactively manage their actions. when a CEP gives the status that a shipment is potentially delayed due to congestion at the airport say, during the New Year period, the shipper can plan the next shipping date, or postpone the next shipments to avoid being congested where potential damage may occur to the shipment.

Quick Response to Disruptions. For example, if a pharmacy purchases an urgent medicine from a Pharma distributor, to sell to the pharmacy's end customer. When the Package company tells that there is a potential delay, then the pharmacy can decide to purchase the medicine from an alternative source instead of waiting for the 1st purchase indefinitely.?

Strong Information creates confidence toward service reliability: like duh, of course. Here is an anecdote:?“Dear customer,” you say, “Fear not! Our tracking system is as precise as a Swiss watch. Let me check.” You tap away, feeling Sherlock-y. But alas, the tracking info is about as clear as a foggy windshield. “In transit,” it says. Well, no kidding! Transit can be better elaborated into something more detailed. Bluntly giving out "In Transit" gives me the impression that CEP does not even know where is my package. There is a problem in their operations. There is a problem with the service reliability.

To share with you, here are some classifications of Shipping Statuses / Milestones that are relevant to customers, which have been compiled based on due diligence toward some CEP companies, as well as my own experience directing Logistics.

The naming of classification may differ from anyone else, but the philosophy of the naming is similar. I classified these using terms like Originating, Terminating, Progress, and Exception. You'll get a better idea of each, by looking at the table. What needs to be noted here, is how imperative it is for a Logistics provider Customer Service team to quickly follow up with the customers, even pre-emptively, when you are about to face exception status.?

For example: Early morning in a Logistics Last Mile Delivery service sorting center, it is a peak period, and the delivery planning shows that the utilization index of some delivery riders is 1.1 or 1.2 (equated by the number of capped capacities a rider can potentially handle in a trip, within promised Service Level, divided by the total number of actual capacity). This shows the riders are over capacity. As their managers, we have a hunch that the later-to-be-delivered orders may not make it on time. If that happens, the rider would need to update parcel statuses to "rider out of time" later in the day when he sees that he can't deliver some of the remaining parcels to be delivered remaining parcels.?

The idea here is to ensure that when we fire "rider out of time" to the consumer app (or whatever frontend we gave them), we could keep the customers rest assured that everything their parcel would still be delivered eventually, without reducing their satisfaction. Hence pre-emptively making an action such as earlier notifying the customer in the morning about potential delays, adding a part-time rider, and miscellaneous service recovery act, is very important.

So here is my verdict on information quality, elaborating on the 3 points I mentioned in earlier paragraphs.

• It's about confidence in your service. Reliable tracking builds trust. Customers need to know where their precious package is
• It also can be used to convey assurance. Even though you are firing negative information.
• It's your secret weapon. Not just for fancy showing off, but having updated data helps you take pre-emptive operational adjustment
• It's your pulse checker. Are you running healthy operations? You can analyze the timestamps of statuses and devise a time-based performance matrix

When you achieve 1 + 2, your chance of making your customers re-use your service increases. When you achieve 3 + 4, you improve reliability.

So fellow logistician, information quality is the heartbeat of last-mile magic that leads us to what new-age startup businesses deem as an elusive promised land: Customers' satisfaction.?

Hope this small post helps inspire you all. Master your information, and make your customers happy.

Until next time, stay curious, stay caffeinated (when your doctor permits)

Yours in logistics excellence,

Sanno

#logistics #lastmile #supplychain #shipment #tracking #management #transportation #business #3PL