Last Mile Logistics: Scenarios & Challenges

In the logistics supply chain process from supplier to consumer, the last step in the operation is known as last-mile logistics. It mainly refers to actions that meet consumer needs directly in the last step of logistics distribution.??

The importance of last-mile deliveries have risen enormously in the last decade, with new innovations and reformations being the need of the hour. The global average cost of last-mile logistics delivery accounts for 41% of total delivery costs. But efficiency gets affected as infrastructure and fulfilment cannot meet the rising demands of consumers.??

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Delivery Modes??

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1. To-Door Delivery: the method by which couriers delivery parcels to end customers directly to their homes by driving in specific areas uniformly and notifying consumers through phone/SMS and apps. This is the most common last-mile delivery model.??
2. OOH (Out of Home Delivery): Customers pick up parcels themselves, mainly by PUDOs. PUDOs can be grocery stores, convenience and brick and mortar stores (click and collect). This method has gained quite a lot of traction in the last few years. E-commerce marketplaces and logistics companies have gotten into OOH delivery mode services to increase consumer satisfaction. It saves delivery cost and provides customers with 24/7 pickup.??

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Scope in Last-Mile Logistics??

With rapid development in e-commerce, now spanning Tier 2 and 3 cities, volumes of parcels have risen in the recent years. Higher requirements in service quality and punctuality in online shopping are being expected by consumers. As demands for same day deliveries and a highly communicative customer journey increase, PUDOs and home deliveries have a low first time successful delivery rate. This leads to more cost in secondary deliveries. Therefore, innovative methods is imminent in? last-mile logistics.??

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• Dichotomy Between Demand and Supply?

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As e-commerce and the population increases, deliveries do too and it becomes harder to ensure standard delivery services with the current delivery models, manpower and technology.??

Low efficiency, high cost and poor customer experiences hamper the last-mile process. With changing trends like increasing SKUs, batches and decreased batch size lead to higher complexities in the process??

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• Sustainability Goals?

The pressure to protect the environment is more than ever before with companies swiftly structuring their supply chains to adapt to low energy solutions. Decreasing their carbon footprint, reducing middle level transport as much as possible to control pollution are adding pressures to supply chains. Responsible sourcing and smarter inventory storage solutions are slowly coming into focus.??

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• Safety And Technology??

Technology and facilities for last-mile deliveries need to be approved substantially to handle safety, efficiency and convenience. Immediate alerts for deliveries and instant notifications on delivery to end consumers.??

Solutions??

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Consumer: Focusing on smart delivery experiences that prioritises smart, timely, private personalised and green last mile logistics distribution. Being attentive towards consumer journey is a sure-fire way of gaining revenue??

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Enterprise: Logistics, e-commerce and service providers sharing their core resources and differentiation capabilities to reduce overall costs and streamlining the collective supply chain process would lead to the betterment of last mile logistics as a whole. Trying several delivery models, applying new technology and equipment would become the common focus.??

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Government: Government attention and policy support is key to integrate modern solutions into the logistics space. India, with the G20 Summit and international collaborations to reduce costs for developing nations, decreasing dependency of sourcing and working on infrastructure for elaborate trade routes are some of the recent solutions in the logistics space.??

Therefore, last-mile logistics takes up a significant portion of both cost and environmental damage when it comes to logistics. Structuring and attempting new channels and technologies to lessen the pressure and keep up with demand is the need of the hour.?

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