Modern eCommerce, driven by e-commerce giants, has drastically transformed the landscape of logistics and supply chain management.
The movement of goods from the manufacturer to the end consumer has become a complex network, demanding efficiency, accuracy, and speed. At the core of this transformation lie the “first mile” and “last mile” delivery processes, which act as bookends in the journey of a product.
This article takes a deep dive into the intricacies of first-mile and last-mile delivery, from their definitions to the technological advancements shaping their future.
The Differences Between First-Mile and Last-Mile Delivery
First-mile and last-mile delivery are two critical components of the supply chain and logistics process, and they refer to distinct stages of the delivery process. Here’s a table highlighting the key differences between them:
|The initial stage of the delivery process, involving the movement of goods from the point of origin (e.g., the manufacturer or supplier) to a distribution centre or transportation hub.
|The final stage of the delivery process, involving the movement of goods from a distribution centre or transportation hub to the end destination, which is typically the customer’s doorstep.
|Focuses on collecting and consolidating products, preparing them for transport, and getting them to a central hub or facility.
|Focuses on distributing goods from the central hub to the end customer, often involving complex routes and individual deliveries.
|Often involves bulk transportation methods, such as cargo ships, trains, or truckloads, for efficiency.
|Typically relies on smaller vehicles, like vans, bikes, or even drones, to navigate local roads and deliver to individual addresses.
|Covers a longer distance, usually between the manufacturer/supplier and a central distribution centre or hub.
|Covers a relatively shorter distance, usually from the distribution centre or hub to the customer’s location.
|First-mile delivery issues can be managing large quantities of goods efficiently, optimising routes for cost-effectiveness, and ensuring accurate inventory management.
|Challenges include navigating complex urban environments, dealing with traffic congestion, coordinating multiple individual deliveries, and ensuring on-time, accurate deliveries.
|Typically less time-sensitive compared to last mile delivery, with more flexibility in scheduling.
|Highly time-sensitive, as it directly impacts customer satisfaction and may require specific delivery windows or same-day delivery.
|Limited customer interaction during this stage, as it primarily involves business-to-business (B2B) transactions.
|Direct customer interaction, with the delivery personnel often interacting with the end customer, collecting signatures, or providing updates on delivery status.
|Technology is used for route optimisation, inventory management, and tracking at a macro level.
|Utilises advanced tracking systems, mobile apps, and real-time communication tools for efficient last-mile operations and customer notifications.
The Role of First-Mile and Last-Mile Delivery
The significance of first-mile and last-mile delivery can be summarised in four key aspects:
- Customer Experience: These stages profoundly influence how customers perceive their shopping experience, making a smooth first-mile and last-mile delivery crucial for customer satisfaction.
- Cost Efficiency: These stages often account for a significant portion of the overall delivery costs. Effective management can lead to cost savings and increased profitability.
- Sustainability: Optimisation in these stages contributes to a greener supply chain and reduced environmental footprint, a growing concern today.
- Competition: As e-commerce thrives, competition among retailers and logistics companies is fierce. Streamlined first-mile and last-mile delivery processes provide a competitive edge.
How to Optimise Them?
Optimising first-mile and last-mile delivery is crucial for improving the efficiency and effectiveness of your supply chain and delivery operations. These two segments of the delivery process are often the most challenging and costly, so optimising them can lead to cost savings and improved customer satisfaction.
Here are some strategies to help you optimise first-mile and last-mile delivery:
First Mile Delivery Optimisation:
- Route Planning and Optimization: Use route planning software to determine the most efficient routes for your drivers to pick up goods from suppliers or warehouses. It can help reduce mileage and fuel costs.
- Real-time Tracking: Implement real-time tracking of your first-mile deliveries. GPS tracking and telematics can provide real-time visibility into your fleet’s location and performance.
- Automation: Automate the scheduling and dispatching of first-mile deliveries to reduce human errors and ensure optimal allocation of resources.
- Supplier Collaboration: Collaborate with suppliers to streamline the order and pickup process. Set clear expectations and establish efficient communication channels.
- Consolidation: Consider consolidating multiple deliveries from different suppliers into a single trip to reduce transportation costs.
- Inventory Management: Optimise your inventory management to reduce the need for rush or emergency pickups in the first mile. Maintain appropriate stock levels to meet demand.
Last Mile Delivery Optimisation:
- Route Optimisation: Use route optimisation software to plan your drivers’ most efficient delivery routes. Take into account factors like traffic, weather, and delivery windows.
- Real-time Tracking and Communication: Give customers real-time tracking information and delivery notifications. It keeps customers informed and reduces missed deliveries.
- Flexible Delivery Options: Offer flexible delivery options such as time slots, same-day delivery, or alternate delivery locations (e.g., lockers or pickup points) to accommodate customer preferences.
- Crowdsourced Delivery: Consider using crowdsourced or gig economy drivers for peak demand periods to scale your delivery capacity.
- Innovative Technology: Utilise intelligent technologies like IoT sensors, RFID, and barcode scanning to improve package tracking and reduce delivery errors.
- Data Analytics: Analyse delivery data to identify trends and areas for improvement. Use data-driven insights to optimise delivery routes, times, and resource allocation.
- Green Delivery: Explore environmentally friendly delivery options, such as electric vehicles or bicycles, which can reduce carbon emissions and operating costs.
- Returns Management: Implement an efficient returns process to handle customer returns and exchanges effectively, reducing the need for additional last-mile deliveries.
- Customer Feedback: Collect and use customer feedback to continuously improve your last-mile delivery operations.
- Safety Measures: Ensure the safety of both drivers and customers through safety training, vehicle maintenance, and adherence to safety regulations.
The Future Trends
The future of first and last-mile delivery promises to be exciting and transformative. As technology advances and customer expectations evolve, the logistics industry will see many changes and innovations.
Hyperloop and High-Speed Rail
- High-speed transportation systems like the hyperloop and high-speed rail have the potential to revolutionise long-distance first-mile and last-mile delivery. These technologies offer rapid and cost-effective transportation options, reducing the time products spend in transit.
Blockchain in Logistics
- Blockchain technology is being explored to enhance transparency and security in the supply chain. It can track products at every stage of their journey, from the first mile to the last mile, ensuring authenticity and reducing the risk of fraud.
- Robots are becoming increasingly sophisticated and versatile. They can assist in the first mile by automating order picking and packaging tasks. In the last mile, robots and drones can efficiently and precisely deliver.
- While technology is a driving force in logistics, human-centric innovations should be noticed. Improved training and support for delivery personnel and innovations in customer service will continue to play a significant role in the success of first and last-mile delivery.
How Luwjistik Helps
Luwjistik is a cutting-edge logistics platform solution tailored to streamline operations and establish connections between businesses and an extensive network of service providers. It simplifies the decision-making process when selecting the ideal first-mile and last-mile delivery partner in Malaysia, presenting innovative methods to enhance the initial and final segments of the shipping process, ultimately reducing costs and boosting delivery efficiency.
Discover how Luwjistik can support logistics and e-commerce enterprises in navigating the intricate first and last-mile delivery landscape:
- Unified API
- Luwjistik’s Unified API streamlines your delivery operations by connecting with multiple delivery service providers through a single interface, simplifying it and helping you choose the best first and last-mile partner.
- Luwjistik’s Marketplace offers logistics service providers access to a diverse network spanning 22 countries and featuring over 80 partners. This network provides various first and last-mile options and transparent cost management for easier decision-making.
- Luwjistik’s L-Control empowers Logistics Service Providers (LSPs) with flexible control over cross-border services and volumes. It offers modular and Smart Routing International (SRI) options, aligning your delivery strategy with budget and profitability goals while optimising delivery routes and providing insights into potential delivery providers’ performance and capabilities.