As an e-commerce business owner, you may be familiar with the fact that last mile delivery is the most crucial stage of your package’s journey.
As more and more shoppers turn to online shopping, the pressure is on for last mile delivery market to meet rising expectations and ensure speedy, efficient, and accurate delivery.
And let’s be real, we’ve all been there, anxiously refreshing the tracking page or peeking out the window to catch a glimpse of the delivery truck.
With so much on the line, it’s no wonder that last mile delivery has become a hot topic in e-commerce logistics.
In this blog, we delve into the challenges of last mile delivery logistics and share strategies on how to optimise it for an unforgettable delivery experience:
- What is last mile delivery?
- What challenges do businesses face with their last mile delivery?
- How to optimise the last mile logistics process with 5 strategies
- Profiting from a multi-courier last mile strategy
What is last mile delivery logistics or the last mile problem?
As the name implies, last mile delivery is the final stretch of the delivery process, where your precious goods are transported from the local hub straight to the final destination, the consumer’s doorstep. And boy, is this part of the journey troublesome. It’s often the most expensive and time-consuming leg of the trip and therefore the most challenging part of the logistics chain.
And with customers demanding lightning-fast and ultra-convenient delivery options, the pressure is on for retailers to step up their final mile delivery game. After all, a seamless and satisfying customer experience is the key to retaining loyal customers and staying ahead of the pack.
What last mile delivery challenges do businesses face?
Despite its seemingly simple definition – delivering packages from the local hub to the customer’s doorstep or the final delivery destination – last mile delivery can be one of the biggest headaches for any online business, big or small. It’s like the final boss battle of the fulfillment journey.
So let’s take a closer look at some of the common challenges:
High costs for last mile logistics
If you thought the costs of running an e-commerce store were already sky-high, hold on to your hats – last mile delivery can eat up a whopping 30% of your logistics budget!
That’s why it’s crucial to implement efficient last mile logistics solutions to keep your costs under control and stay competitive in the cutthroat e-commerce world.
But watch out – failing to follow the shipping conditions for your courier and delivery method can land you in some serious hot water. Think fuel surcharges, extra fees, and other pesky add-ons that can put a real dent in your profits.
And don’t even get us started on the unpredictable transport routes that can throw a wrench in your delivery plans and add more costly mileage to the equation.
Sustainability and the European Green Deal
In today’s world, where environmental concerns are top of mind, you simply can’t afford to ignore the damage last mile delivery can have on the world.
Europe is leading the charge with its ambitious environmental targets, including a 55% reduction in carbon dioxide emissions by 2030 and the total neutralization of CO2 emissions by 2050. It’s clear that the future is green – and sustainable deliveries are no longer a nice-to-have, but a must-have in the e-commerce landscape.
But it’s not just the regulations that are changing – consumers are also demanding eco-friendly delivery options from online stores. In fact, according to the latest E-commerce Consumer Research by Sendcloud, a whopping 54% of online shoppers expect e-commerce businesses to offer CO2-free delivery methods.
And if you’re thinking of sitting this one out, think again. Businesses that fail to adapt to this new paradigm risk being left in the dust.
By embracing sustainable delivery practices, e-commerce stores can not only meet their customer’s expectations but also reduce their carbon footprint and contribute to a greener future. So let’s roll up our sleeves and get ready to green up that last mile!
Customer expectations and failed deliveries
If there’s one golden rule in the world of e-commerce (and in any other business field, for that matter), it’s that you must deliver on your promises. If your online store can’t live up to strict delivery deadlines, then don’t make them in the first place. Customers appreciate flexibility, but they value professionalism even more.
In today’s fast-paced world, customers expect lightning-fast delivery times, especially during special occasions such as Christmas. According to our E-commerce Study, a whopping 41% of respondents desire express delivery services for all online orders.
By taking advantage of the conveniences offered by last mile deliveries, you can enhance the options and shipping times available to your customers. However, before taking the plunge, be sure to analyze both your own capabilities and those of the logistics companies, to avoid creating unrealistic expectations for your customers.
5 strategies for last mile delivery optimisation
Enough about the theory, it’s time to take action. Your customers don’t like to be waiting for their orders.
While there are no magic formulas for the final link of the distribution process, there are effective strategies for your e-commerce business that can boost your last mile delivery success rate.
1: Leverage technology to streamline logistics
By implementing technology such as parcel optimisation or real-time package tracking, you can reduce the time and total shipping costs associated with last mile carrier delivery. Multi-carrier parcel management solutions offer several tools and features that optimise the final part of delivery. Even though couriers are in charge, you can streamline a part on your end too.
Shipping software, but also couriers, keep developing their services. So once you found the right solution that matches your business goals, you can leave the shipping expertise to the technology and focus on growing your business.
Here’s an overview of a few of the latest technologies to optimise the last mile of delivery:
- Route optimisation software uses advanced algorithms and machine learning techniques to focus on optimising delivery route planning by taking into account traffic conditions, delivery time windows, and the capacity of the couriers.
- Shipping platforms provide full visibility and control over the entire shipping process. Real-time tracking of shipments helps to efficiently dispatch orders, provide automatic proof of delivery and automatically give alerts to consumers about the status of their orders. This will enable you do reduce WISMO significantly.
- GPS trackers are increasingly used to monitor and track shipments.
- Predictive analytics analyze historical data and other relevant factors to build algorithms to forecast and optimise resources. By predicting potential delays or bottlenecks it enables you to anticipate in time and switch delivery methods or couriers where needed.
2: Partner with local couriers
Partnering with local couriers can help you to more efficiently and effectively deliver products to customers. Local couriers’ delivery personnel are often better equipped to handle the challenges within a specific region of last mile delivery. You can think of navigating crowded urban areas or delivering to remote locations and rural areas. Additionally, working with local couriers can help you to build stronger relationships with your customers by providing more personalized and faster last mile delivery service.
On top of that, 40% of consumers say that they have a strong preference for a specific courier and most often the local courier is preferred. Integrating with each new courier is time-consuming and very costly. Therefore, it’s crucial to set up the right courier mix.
A practical way of implementing local couriers when operating internationally can be by using a 3PL partner.
Let’s look at Smartphonehoesjes.nl as best practice. The online store connects its WMS to Sendcloud and together with 3PL-partner We Grow Webshops, the brand offers 9 different couriers for domestic and international shipping, handling millions of packages a year.
3: Offer multiple and flexible delivery methods
This strategy is definitely nothing new, but often overlooked. You can cater to the specific needs and preferences of your customers by offering choices within the checkout. Why offer multiple payment methods and just one delivery option?
Online shoppers have different preferences when it comes to delivery methods. Did you know that French consumers have a strong preference for delivery to service points while Spanish consumers prefer cash-on-delivery? Check out the latest e-commerce statistics and implement them for your business.
Fast delivery methods like same-day, next-day, or day-specific delivery options are becoming more adopted in different countries and more couriers arise. Ever thought of the fact that delivery to service points is more sustainable?
Shipping platforms like Sendcloud easily enable you to add multiple delivery methods to your checkout, while simultaneously optimising the process in the back. Whether you only sell locally or all over the world, different (inter)national couriers can enable you to offer flexible delivery.
Last but not least, multiple delivery options can help you to ensure that your customers receive their orders in a timely and convenient matter. Go get those 5-star reviews!
Flexibility is everything when it comes to shipping in Europe and the UK. Trying to reach all customers via one courier is not competitive or financially viable. With the added range of couriers that Sendcloud brings, our customers will benefit from the most cost competitive options on the market. – Enda Bresline | GM for Europe – ShipBob
4: Connect with your customers
The lack of information generates a lot of uncertainty for your customers. Spare them unnecessary anxiety and use all the channels at your disposal to maintain direct and transparent communication. Automatic shipping status updates, automated messages, and package or delivery time tracking will enhance the shopping experience and brand loyalty at this sensitive point in the last mile delivery process.
Last mile delivery tracking has other benefits for your e-commerce, not just improving the online shopping experience. With proper monitoring and customised tracking communication you can:
- Reduce the number of returns, ensuring successful delivery.
- Reduce the burden of customer service.
- Increase cross-selling and retention rate.
Sendcloud’s customers Custo Barcelona increased the retention rate by 36% thanks to a branded follow-up, integrating social networks into them, and even having banners with special offers. In this way, the customer remains connected and in communication with the brand.
5: Implement a returns management strategy
Returns are an inevitable part of e-commerce, but they can be a major challenge for last mile delivery. By implementing a returns management strategy, you can help to minimize the cost and complexity of returns, while also providing a better customer experience.
This might include offering free or paid returns, providing pre-printed return labels, or offering different ways of international returns to facilitate faster and more efficient returns processing.
Did you know that with Sendcloud’s returns management solution, you can set up return rules? You decide when returns are accepted and under what terms. This way you can optimise it for your own business, but offer your customers a friendly and hassle-free policy. It will help to streamline the last mile for all parties involved.
Key to success: a multi-courier last mile delivery strategy
The rise of local and last mile couriers is yet another example of the transformation that e-commerce is undergoing in terms of distribution. With online purchases becoming more and more integrated into our routines, both couriers and online retailers need to become creative and efficient in their delivery processes.
You want to meet the current and future challenges of fast and flexible delivery as an essential part of growth, right? Do you meet all of the requirements to do that?
Sendcloud can help you do so by integrating last mile delivery strategies into your logistics so that you too can benefit from the latest developments. By implementing a multi-courier solution with a single integration you can offer your customers all they need while simultaneously handling orders as efficiently as possible.
Curious to find out more? Create a free account or request a short and personal demo today.
