As the name implies, last-mile delivery is all about getting products and other goods from a transportation hub to their final destination. When a product is shipped around the country, it may go from hub to hub for days or even weeks at a time. However, there will come a point where it leaves a hub for the final time and heads straight for a customer’s front door.
That part of the process – and making sure that it goes as smoothly as possible – is what last-mile delivery is all about.
The Challenges of Last Mile Delivery and How to Overcome Them
One of the major challenges with last-mile delivery has to do with the logistics involved in the process itself. When a product has reached this part of its journey, it will almost always be delivered via a truck driver. Those van and truck drivers need to deal with not only unpredictable traffic, but also issues like sudden road closures, problems with route planning, quickly evolving weather conditions, and more.
The point is that many of these obstacles are not only beyond the control of the driver, but they’re hard to plan for as well. Drivers will need to adapt to changing conditions almost in real-time to make sure that the shipment gets to its final destination not only efficiently, but quickly to preserve the customer experience as well.
Another one of the major issues with last-mile delivery has to do with what has colloquially become known as the “last-mile problem.” It’s something that many of us have experienced – a package that we’re waiting on sees a status change to “Out for Delivery” early in the morning, but it might be 10 hours or more before we actually receive it.
Typically, this happens because delivery drivers contend with several stops along the way. They have more than one package to deliver, obviously – but things like inefficient route planning or the aforementioned weather conditions can delay things far beyond what anyone is comfortable with.
Not only does the last mile problem tend to harm the customer experience, but it can also lead to increased shipping costs for retailers and other logistics providers as well.
This is a big part of the reason why it’s always important to be as proactive as possible. Routes need to be planned with as much care as possible to at the very least avoid those conditions that you can control like known road closures or upcoming violent storms. At the very least, it makes those sudden changes easier to adapt to.
Freight Factoring for Last Mile Delivery
Freight factoring is particularly important for last-mile delivery organizations as they are the ones that depend so heavily on keeping a consistent cash flow. Last-mile delivery organizations are particularly dependent on not only fluctuating gas prices, but also insurance, delivery vehicle maintenance, and more. It’s hard to complete a last-mile delivery if you suddenly can’t afford to have important repairs made to your van.
In a situation where your cash flow is inherently unpredictable, freight factoring can add a bit of much-needed stability to your enterprise. It can also give you the capital you need to invest in delivery technology that will optimize routes and make your business more profitable. It could even give you the resources you need to hire more delivery personnel, thus eliminating a lot of the aforementioned challenges.
Optimizing Delivery Costs
One of the biggest ways to optimize delivery costs in terms of last-mile delivery involves using route planning to cut delivery times as much as possible.
Take rural areas, for example. On paper, a series of deliveries may not seem like anything special. You’re dealing with just a few deliveries to a few specific houses – how complicated could it be? In reality, those houses could be many miles apart, requiring a major time and fuel commitment for just a few deliveries.
This is also true in urban areas. If routes aren’t optimized to move in a logical, geographic way across a city, drivers could essentially end up driving around in circles all day long. The gas-related costs alone will be enormous – to say nothing of how long it will take for those deliveries to get to their final destinations.
This is why many organizations use not only route planning but also sophisticated fleet management solutions. Organizational leaders can see where trucks and drivers are in real-time, allowing them to pivot if something causes a delay (or requires an adjustment to a plan that may no longer make sense for whatever reason).
Ways Technology Can Help with Last Mile Delivery
Tech-driven solutions like route planning tools can not only go a long way towards reducing service time – they also help minimize labor costs enormously as well.
From the moment you start using a route planning or auto-dispatching tool, you begin saving time almost immediately. The tool is largely automated, meaning that someone no longer has to pour over detailed routes and other resources to complete everything manually. Routes are automatically optimized using all available information, allowing human employees to focus on more important tasks.
Not only that, but routes are also updated in real-time based on changing conditions like new deliveries coming in. This can optimize routes in a way that means you require fewer drivers on the day of the job to complete the set number of deliveries.
Another great way that technology can help with last-mile delivery involves the use of reporting to increase accountability. Keep in mind that there are always opportunities for improvement, especially in a process that is as dependent on human labor as this one.
Once the day is over, you can go back over the reports to help identify any bottlenecks or weaknesses that developed. Why did certain routes take longer to complete than others? Was there anything that could have been done differently? What factors impact your on-time rates or service times that you may have otherwise been unaware of?
All this is critical to know because if you know what isn’t working (or what could be better), you can fix it. You’re not trying anything to “see what sticks” – you’re making intelligent decisions based on accurate, real-time information.
If you’d like to find out more information about last-mile delivery, or if you have any additional questions that you’d like to go over with someone in a bit more detail, please don’t hesitate to contact the Advanced Commercial Capital team today.