The last mile is the last step in delivering an order to a customer's home. This stage is important because it can generate additional costs, but it is also the most complex and the most important in terms of customer experience.
The last mile can be challenging for businesses because of the complexity of the urban delivery network. Factors such as traffic congestion, restricted traffic areas, limited delivery times and accessibility issues can lead to delays, additional costs and customer dissatisfaction.
To overcome these challenges, logistics solutions have been developed. Here are 4 examples:
Smart Lockers
Smart lockers are automated storage boxes that centralize the delivery drop-off point to reduce trips. They allow customers to pick up their order at their preferred time. This solution has the following advantages and disadvantages:
Advantages
- Flexibility: Customers can pick up their order at the time they want at the pick-up point they choose.
- Security: Smart lockers are usually equipped with surveillance cameras and advanced locking systems, making them more secure than traditional mailboxes or pick-up points.
- Cost reduction: Smart lockers can also reduce delivery costs, as multiple packages are dropped off at the same location, without having to go to each customer's home.
- Reduced GHGs: By centralizing the pickup location and allowing your customers to pick up their order themselves, you reduce your greenhouse gas emissions caused by truck deliveries to each of your customers.
Disadvantages
- Limited size: Smart lockers are limited in size, which means they cannot accommodate large or unusually shaped packages.
- High cost: Smart lockers can be expensive to install and maintain, which may deter small businesses or individuals from using this solution.
- Infrastructure required: Smart lockers require a suitable infrastructure to operate, which can be a problem in rural areas or in cities where space is limited.
- Risk of loss: If a package is mislabeled or misplaced in the smart locker, it can be difficult to find and retrieve.
Third Party Logistics (3PL)
Third-party logistics services are external service providers that provide logistics services to other companies. These services can include inventory management, warehouse management, order management, transportation management and other logistics services. Here are the advantages and disadvantages of third-party logistics services:
Advantages
- Economies of scale: 3PLs can offer logistics services at a lower cost than companies could obtain in-house, because they can benefit from economies of scale by aggregating the needs of multiple customers.
- Logistics expertise: They can provide advice and customized solutions to companies to optimize their supply chain.
- Flexibility: 3PLs can adapt quickly to changes in customer demand, adjusting inventory levels and modifying transportation routes.
- Improved efficiency: 3PLs also have advanced infrastructure, personnel and technology to improve the efficiency of their customers' supply chain.
Disadvantages
- Loss of control: Companies may lose visibility and control over their supply chain when they outsource logistics services.
- Risk of dependency: Companies may become dependent on 3PLs for their logistics activities, which may result in additional costs.
- Difficult coordination: 3PLs may work with multiple customers and have difficulty coordinating the activities of each customer to ensure optimal service levels.
- Security risks: Outsourcing logistics services can lead to security risks, including data security, physical product security and transportation security.
Collaborative Delivery
Collaborative delivery is a delivery model that allows individuals to deliver packages using their own vehicles. There are advantages and disadvantages to this practice:
Advantages
- Cost reduction: Collaborative delivery reduces delivery costs by using vehicles already on the road rather than dedicated delivery vehicles.
- Reduced greenhouse gas emissions: By using smaller vehicles already on the road instead of delivery trucks, your company can reduce the greenhouse gas emissions associated with delivery.
- Speed of delivery: By dealing with individuals who are in close proximity to your business and customers, you could deliver to their homes even faster.
Disadvantages
- Security: Collaborative delivery can pose security concerns for packages, as individuals are not professional deliverers and may not take the necessary security measures to ensure that packages are delivered safely.
- Unreliability: Individuals who make deliveries may not be as reliable as professional deliverers. Delivery times may vary and there may be delays or cancellations of deliveries.
- Risk of theft: There may be an increased risk of theft during collaborative delivery, as packages are in the hands of individuals rather than delivery professionals.
Shipment consolidation
Shipment consolidation involves combining multiple orders into a single delivery, which reduces the number of vehicles needed to make deliveries and thus reduces greenhouse gas emissions. This method is often used in distribution centers.
Benefits
- Cost reduction: Consolidating shipments reduces transportation costs by optimizing the use of available truck or aircraft space.
- Reduce greenhouse gas emissions: By reducing the number of trips required to transport goods, consolidation can reduce greenhouse gas emissions associated with transportation.
- Better time management: By consolidating shipments, it is easier to manage delivery times and ensure that goods arrive at their destination on time.
Disadvantages
- Longer transit times: Consolidating shipments can result in longer transit times, as goods must be sorted and consolidated before being shipped.
- Risk of damage or loss: Consolidating shipments can increase the risk of damage or loss of goods during transit, as more handling is required.
- Logistics complexity: Consolidating shipments may require more complex planning and coordination to ensure that goods are sorted and transported efficiently.
