The real cost of an inefficient last mile

The last mile of logistics is often the most complex and costly part of the supply chain. Miscommunication, dwell time inefficiencies, lost packages, and redeliveries are just some of the hurdles that logistics companies face in this crucial phase.?

However, there's a beacon of hope amidst these challenges—technology-driven solutions that promise to revolutionize last-mile logistics.

Quantifying the impact of an inefficient last mile delivery process

According to data from a McKinsey article, the direct costs associated with last-mile inefficiencies in B2C cases are staggering.?

Miscommunication between parties involved in the handover of goods can lead to delays, loss of information, and costly errors. Direct communication costs alone can account for up to 0.5% of revenue for B2C carriers, with a significant portion of customer service agents' time dedicated to resolving issues stemming from blind handoffs.?

The study also found that dwell time inefficiencies can result in increased costs and reduced productivity. Millions of hours are wasted annually due to avoidable delays, amounting to 3%-5% of revenue.?

Furthermore, lost and stolen packages and redeliveries further exacerbate the financial burden on carriers, totaling up to 1%-3% of revenue in B2C logistics. These delivery issues also damage a company’s reputation and erode customer trust.

The key to unlocking greater last mile delivery efficiency is to integrate technological solutions like real-time transportation visibility platforms and AI-driven workflow automation. However, incorporating these into existing operations can be complex and challenging, requiring effective change management practices to be implemented.

Innovative solutions pave the way for increased cost savings

Communication and workflow automation, such as the solutions provided by Bringg, are at the forefront of addressing the future of last mile delivery efficiency. These innovations, when integrated into last mile software and transportation management systems (TMSs), have the potential to yield significant improvements in efficiency and cost savings. But don't just take my word for it—the quantifiable data speaks volumes.

According to the same study by McKinsey, the impact of communication and workflow automation in the last mile is nothing short of remarkable. In fact, data suggests that up to 10% of revenues in B2C cases can be attributed to the efficiency gains achieved through these technologies.?

Let's break down some of the key challenges addressed by communication and workflow automation:

1. Communication costs: Traditional methods of communication, such as phone calls and emails, can incur significant costs for logistics companies. However, with the advent of real-time communication platforms and AI-driven contextual communication solutions, these costs can be drastically reduced. By streamlining communication channels and enabling real-time collaboration, companies can minimize expenses while enhancing efficiency.

2. Dwell time inefficiencies: AI-based workflow automation tools can optimize routing and scheduling, reducing wait times and improving overall throughput. By automating repetitive tasks and optimizing delivery routes, companies can minimize dwell time inefficiencies and maximize resource utilization.

3. Lost packages and redeliveries: Lost packages and redeliveries aren’t only costly in terms of financial losses but also erode customer trust and satisfaction. By leveraging real-time tracking and predictive analytics, logistics companies can proactively identify and mitigate potential delivery issues. Customers gain visibility into their shipments, which enables proactive communication, and allows companies to enhance customer satisfaction and loyalty.

4. Integration challenges: Despite the promise of communication and workflow automation technologies, integration into existing systems can be a daunting task. With careful planning and strategic implementation, companies can unlock the full potential of these innovations. By partnering with experienced technology providers and investing in comprehensive training programs, companies can ensure a smooth transition to automated workflows and streamlined communication processes.

The future of last mile delivery

As we look to the future of last mile efficiency, the role of technology in driving improvements is essential for a successful delivery experience.?

By addressing key challenges, such as communication costs, dwell time inefficiencies, lost packages, and redeliveries, deep integrations between last-mile software and TMSs enable more thoughtful processes, reduce blind spots, and enhance overall delivery efficiency.

Investments in communication and workflow automation are paramount in an increasingly demanding market. As the logistics industry continues to evolve, companies delivering superior service and driving sustainable growth in the digital age will have the competitive edge.