What is last mile delivery?

Last mile delivery overview

Last mile delivery has changed a lot over the years, and 2020 only made it more complicated as the COVID-19 pandemic spread around the world disrupting the normal day-to-day lives of just about everyone.

With the advent of new concepts and practices in the supply chain management process, most notably in the last mile delivery phase, the systems of shipping and tracking in the USA and beyond came to a reckoning of sorts.

Over the years, customers have come to expect a lot more out of the last leg of the supply chain cycle including faster delivery and often same-day delivery.

On top of faster delivery, it’s often expected that last mile delivery services are free of charge, and customers want end-to-end transparency of the entire order process from warehouse to delivery.

And rightly so. Shouldn’t customers be entitled to know where their orders are, when packages are going to be delivered, and who’s ensuring safe delivery? It’s one of the many variables of managing our day-to-day lives, a lot of which seems to be done online.

To ensure supply chain leaders deliver on their promises to customers and better yet to exceed their customer’s expectations, supply chain managers have had to reassess their last mile delivery strategies.

Conventional hub and spoke logistics models just aren’t enough to meet and exceed customer expectations and turn a profit at the same time.

The digitalization of last mile delivery processes will be the key to gaining the speed, efficiency, and consistency that is crucial to setting the trend for the future of manufacturing, grocery stores, eCommerce, restaurants, and other retailers.

In this article, we’ll cover the last mile delivery process, including how it works, what some of the main challenges are, and how mobile last mile delivery solutions can solve the challenges supply chain leaders face today, and key trends the industry is seeing as we move forward in 2021.

But first, let’s show you how last mile delivery works.

How does last mile delivery work?

The last mile delivery process consists of five key steps.

1. An order is entered into the system

After a customer makes that last click on a payments page, the information heads to the supplier, who confirms the order and starts the fulfillment process. This is the stage where a delivery method is confirmed, a tracking number is issued, and a preliminary ETA is set, pending delivery updates or changes to the order.

2. The order heads to the transportation hub

Once the order has been placed and processed, the package is sent to the
transportation hub where it awaits shipment. This is the real beginning of the last mile delivery process, because the order is now ready to travel to its final destination.

3. The order is designated a delivery person

At this stage, the order has been strategically routed through the transportation hub and assigned a delivery driver. Optimizing this stage of the delivery process is crucial for efficient, cost effective delivery — one of the most important phases of last mile logistics solutions.

4. The order is scanned before loading onto a delivery vehicle

Scanning the parcel before it is loaded on the delivery truck, updates the system on where the package is, which ultimately updates the recipient that their package is ready to be delivered. This stage often reduces the risk of the packing being lost along the way.

5. The order is delivered and proof of delivery is obtained

The driver makes his/her way to the delivery location, drops off the package, and updates the tracking information accordingly to verify and confirm that the delivery has been completed, and that the package has reached the correct destination.

How do last mile delivery solutions empower businesses?

Last mile delivery solutions empower businesses to organize, optimize, and ultimately improve their end-to-end logistics operations. Some of the industries that are most empowered are retailers, eCommerce, third-party logistics (3PL), manufacturers, and other businesses that rely on shipping products and services wherever they’re needed.

Many of the key features of a last mile delivery solution are listed below:

Dynamic routing

Dynamic routing enables managers and business leaders to track their delivery personal and fleet in real time.

The best digital solutions for last mile delivery ensure optimized delivery processes for speed and efficiency, the end result of which is increased margins and more delightful delivery experiences for customers.

Dynamic routing ensures delivery efficiency by instantly triggering alerts when delivery routes have been adjusted or diverted unnecessarily, for prolonged stoppages or vehicle idling. Dynamic routing is the easy way to optimize routes in real time based on weather and/or traffic conditions, one-way windows, delivery urgency, and other variables that might impact driver effectiveness and efficiency — all the driver has to do is follow directions on a mobile device application.

Complete control of delivery operations

Having full transparency from when a customer places an order to when the delivery person confirms delivery, allows management to address activities in real time as necessary.

Additionally, end-to-end control over delivery operations gives business managers the transparency they need to ensure the business is operating correctly and efficiently. At the same time, it gives business managers and leaders the freedom to focus on maintaining and exceeding customer success and satisfaction.

Electronic proof of delivery (ePoD)

The advent of electronic proof of delivery gives businesses the advanced technology they need to empower their customers to verify proof of delivery dynamically. In other words, the customer doesn’t need to open the front door to receive a package.

On the other hand, delivery drivers don’t have to waste precious time waiting for a door to open (or in many cases to not open). With the difficulties of COVID-19, ePoD allows delivery drivers to maintain social distance from customers and in most cases avoid physical contact altogether.

Inputting delivery data into one central data system or CRM allows for simple data archiving, analyzing, and auditing — greatly reducing the risk of manual input errors.

Accurate KPI benchmarking

A modern last mile logistics platform built by savvy last mile solutions providers allows businesses to track their KPI benchmarks more accurately and efficiently and improve SLA adherence.

See critical delivery metrics stored in one place for accuracy: delivery performance metrics, delays, customer ratings, ETA metrics, pending deliveries, and third party logistics performance data, and much more. Compare this data over customized timeframes so you know where and when to make changes.

Flexible delivery

When creating lasting and positive relationships with customers is the goal, flexible delivery options enabled by modern, mobile last mile logistics platforms make it easy. Last mile delivery tracking solutions provide customers with the custom delivery options they need to make the shipping decisions necessary to suit their changing lifestyles. It empowers customers to change shipping times and locations at their convenience, and the workflow is updated automatically — no need to intervene.

Crowdsourced deliveries

The demand for at-home delivery is growing rapidly, and the COVID-19 pandemic has greatly impacted such demand. The difficulty for businesses has been how to scale at-home delivery operations in a cost-effective way with the resources immediately available to them.

Crowdsourcing is changing the game for last mile delivery logistics solutions. Crowdsourcing deliveries effectively allows last mile businesses to scale on-demand by scanning the gig economy and adding them to the temporary workforce based on, but not limited to, proximity, cost, urgency, and productivity.

What are the challenges last mile delivery businesses face?

Since the last mile delivery process relies on many moving parts, each piece of the puzzle is just as important as the next to ensure that deliveries are made on time to keep this integral part of the supply chain moving forward.

Many challenges can complicate today’s world of supply chain operations and last mile delivery, notably, the rise of same-day delivery, IT legacy architecture, and poor logistics visibility, all of which can affect a company’s ability to run smoothly, efficiently, and cost-effectively.

Let’s cover some of the issues that can affect last mile delivery operations.

Executing same-day delivery

Executing same-day delivery is a challenge of operational efficiency. It requires a tight-knit fleet to ensure speed of delivery and any one inefficiency can throw off the whole operation. It’s simply not easy to deliver things fast.

Among the many things that can slow last mile delivery operations, inefficient routing, depending on repetitive, time-consuming manual tasks, poor management of third-party logistics are among the most prevalent problems.

Another challenge organizations face is the fact that the bulk of same-day deliveries are often small packages so vehicles must be loaded in the most efficient manner possible, which requires tight capacity planning.

Traditional routing models

Traditional routing models often rely on manual processes, which are naturally slow and inefficient. Companies that haven’t deployed last mile delivery software solutions to automate manual processes find it nearly impossible to ensure timely and cost-effective execution of their last mile services.

For example, without automated processes, it’s impossible to make real-time adjustments to delivery routes based on factors like weather, road closures, traffic, accidental diversions, and more.

Poor logistics visibility

Legacy supply chain architecture and traditional delivery processes coupled with substandard systems interoperability often leads to poor visibility into your company’s or a third-party logistics company’s logistics systems, which can result in one or many issues that can wreak havoc on your business.

Delays, inaccurate ETAs, route diversions, unnecessary fuel consumption, and other issues can be impossible to identify without software solutions that give you the business transparency you need to identify problems, correct them, and prevent future ones.

Last, if your business inefficiencies are making it difficult for customers to track their orders and deliveries, it’s unlikely you’re going to be able to retain them for long. Your business inefficiencies can ultimately funnel down to theirs.

The COVID-19 impact

If you’ve ordered or shipped anything online during the beginning of COVID-19, surely you experienced first-hand the disruption the pandemic had on the last mile delivery industry. In short, it changed everything: the way packages were picked up, delivered, and received.

Social distancing requirements evolved into contactless delivery, which isn’t as easy as it seems. Last mile businesses needed to evolve to ensure customers knew about delivery completion, and safety standards were put in place to protect both customers and delivery drivers.

These changes might become the new normal from now on, and it’s critical that last mile delivery businesses evolve by adopting the solutions necessary to facilitate such requirements.

Scaling delivery operations

Online buying increases rapidly year over year, and because of it last mile businesses are required to evolve alongside the market. The added pressure? Last mile carriers also have to figure out how to shrink delivery time. But when delivery personnel are running at max capacity during peak times, it’s difficult to plan for same day deliveries.

Inflexible logistics processes

One of the largest drawbacks of last mile delivery operations is having an inflexible logistics process that can’t keep up with the constantly changing market. In a world where convenience is king, today’s customers expect flexibility when it comes to their deliveries, which reflects the changing dynamic of their daily schedules, which are often on the go.

The many ways technology solves last mile delivery challenges

Empowering businesses to do more with less is the crux of software-as-a-service (SaaS) solutions, and disruptive technologies give business leaders, managers, and employees the insights they need to get the job done right.

Luckily for last mile delivery businesses, technological advancements have simplified the complexities of providing efficient and cost effective deliveries. With automated processes and increased business visibility from dynamic reporting and analytics, last mile delivery management software is mobile and ready to change your business for the better.

Here are some of the ways last mile delivery management software, like B2Field, can empower your last mile business.

Plan optimal routes, cut delivery times

Every delivery driver follows a path, and as stated previously, there are a variety of unpredictable conditions that can change over the course of the day: weather, traffic, and more.

Optimal route planning from B2Field allows you to plan dynamic routes based on time, location, vehicle capacity, and traffic to plan the most optimal routes for your fleet. Real-time updates empower drivers with up-to-the-minute information that allows them to react when they need to.

Automatic task scheduling and task allocation

Automated dispatching reduces labor costs and service times.

Based on a driver’s availability, past performance data, proximity from customer/location, last mile delivery software can automatically assign delivery tasks and rules to drivers. Drivers simply have to go to the app to view, complete, and confirm assignments during the day.

Electronic proof of delivery (ePoD)

Increased transparency of the delivery process is a benefit more and more customers demand, and last mile delivery providers are discovering new ways to meet and exceed those demands.

Obtaining electronic proof of delivery is a simple and necessary process in which a driver uses their mobile device to verify delivery information to the recipient, which is logged into the system with a date and timestamp.

B2Field’s ePoD capabilities include, barcodes, notes, photo collection, and signatures.

Report and analyze, do more

Business transparency is key for last mile delivery services. It allows you to identify inefficiencies and bottlenecks and quickly make changes before the issues worsen, and simply to monitor day-to-day operations to proactively look for opportunities for improvement.

With B2Field, you can monitor key performance metrics like success rates, on-time deliveries, service times, feedback scores, distances travelled, and more depending on your needs. Data can be filtered by driver, days of the week, months, or even by the hour.

You can export custom reports whenever you want and send only the most relevant info to the correct stakeholders.

Exceed customer expectations

Since customers need more dynamic services from their last mile delivery providers, you can exceed customer expectations by giving them up-to-the-minute information via two way communications methods via SMS and chat. 

This way, customers can be a part of the real-time feedback loop, which goes way beyond clicking on a simple static tracking number — attention to detail that’s designed to exceed their expectations.

Last mile delivery trends in 2021

The last mile delivery industry has probably changed more in the last year than ever before and there’s no reason to suggest progress is going to slow down anytime soon.

This year, we expect many new trends and technologies to emerge to help last mile carriers adapt to this ever-changing industry and the customer demands that come with it.

The trends listed below will play increasingly important roles in the improvement of last mile logistics.

Faster order fulfillment

As previously mentioned, one of the big asks consumers are making from last mile delivery carriers is faster deliveries: often the same day or on-demand. That’s a lot of work for logistics and fulfillment organizations, and it requires more than even technology is capable of keeping up with sometimes.

The key to staying ahead of the curve when it comes to executing speedy deliveries is always going to be operational efficiency and transparency, a level of business insight only accessible through state-of-the-art last mile delivery software like B2Field.

Enable order traceability

Tracking information and proof of delivery are two key ways to ensure packages don’t disappear, or, in the least, ensure you’re able to trace where a package was lost.

Mobile technologies like B2Field have changed the way last mile carriers track and confirm deliveries. GPS functionalities show consumers exactly where their packages are and how far drivers are from their business or residence.

Proof of delivery is easy: delivery photos and signatures are simply confirmed on a smart device and added into the system for reporting. This easy to use technology reduces disputes between carriers and customers and allows your delivery personnel to stay efficient in the field.

In-house delivery services

Large eCommerce companies are doing this more and more. Rather than outsourcing their deliveries to other last mile companies, they build their own fleet and hire their own drivers.

This allows for more business flexibility and cost control. For example, some companies have expanded their delivery windows to include weekends and evenings.

Micro-warehousing

Again, the biggest players in eCommerce are opting for expanded delivery efficiency by increasing the amount of warehouse space.

Micro-warehousing allows for more deliveries to occur at a much faster rate because organizations can focus on supporting local communities instead of entire cities, for example.

Smart tech and the future of delivery

We’ve heard rumors of these things and maybe even seen a few videos about them here and there, but when it arrives, it’s going to change the industry forever. We’re talking about delivery-drone technology, robotics, and other technologies that will work to almost completely automate the industry.

Since labor costs is the number one most expensive part of last mile delivery, and it usually only occurs during regular work hours, we can expect the industry to move toward a more cost-efficient process that works around the clock.

What companies offer the best last mile delivery solutions?

As we’ve discovered, the world of last mile delivery is making advancements every day to provide better and faster deliveries to customers on their terms.

A modern last mile delivery solution helps logistics companies respond to the changing world of last mile deliveries by offering automated scheduling, dispatching, streamlined communications, agile data collection and analysis, which are the resources last mile companies need to delight their customers and keep them coming back for more.

B2Field’s last mile carrier software offers automated scheduling, dispatching, real-time communications, and agile reporting and analytics to boost the efficiency and productivity of your fleet — a combination of tools that can provide a clear view into what makes your business succeed and what changes might need to be made for continued growth and success.

Want to learn more about how B2Field can help your last mile delivery company do more with less? Get in touch with one of our customer service representatives today.