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Last mile delivery challenges: how to overcome them

In the ever-evolving landscape of logistics, the last mile of delivery poses unique challenges that require innovative solutions. Last mile delivery, the final leg of the delivery process where a package reaches its destination, is often the most critical and complex phase. In this article, we’ll explore key challenges in last mile delivery and explain you how to tackle them.

What are the key challenges in last mile delivery?

1. Rising Delivery Costs

Last mile delivery is often the most expensive part of the supply chain, accounting for up to 53% of the total delivery cost. Factors such as fuel prices, vehicle maintenance, and labour costs contribute to the rising expenses.

One thing you absolutely don’t want to do is to pass these costs onto the customer, because you might risk a cancellation. The best option would be to minimise these costs in another way. But how? We pick out three options.

  • Negotiate carrier contracts: Negotiate favourable contracts with shipping carriers to secure competitive rates for delivery services. Regularly review and renegotiate contracts to ensure your business is getting the best possible rates based on shipping volumes and needs.
  • Leverage technology: Invest in technology solutions such as delivery management platforms or tracking systems to streamline operations and reduce manual labour costs associated with managing deliveries. Automation and real-time tracking capabilities can improve efficiency and minimise errors.
  • Monitor and analyse performance: Continuously monitor delivery performance metrics such as delivery times, costs per delivery, and customer satisfaction levels. Analysing performance data helps identify areas for improvement and optimise delivery operations to minimise costs while maintaining service quality.

2. WISMO-Questions

The volume of “Where is my order?” (WISMO) inquiries and customer complaints often come from a lack of timely and accurate delivery updates. Customers eagerly await their purchases and expect clear tracking information to stay informed about their deliveries. Failing to meet these expectations can result in frustrated customers, negative feedback, and strain on customer service resources.

To address this issue, companies must prioritise the implementation of reliable order-tracking systems. Incorporating advanced tracking technologies empowers companies to provide real-time updates on the status of orders. Additionally, providing self-service tracking portals and automated delivery notifications significantly increases overall customer satisfaction and retention.

Expanding on how to tackle this last mile delivery challenge further, companies can take several proactive steps:

  1. Invest in advanced tracking technologies to accurately track packages throughout the delivery journey. These technologies provide real-time visibility into the location and status of each order, enabling customers to stay informed at every stage.
  2. Create user-friendly online portals where customers can easily track their orders without the need for assistance from customer support agents. Empowering customers to independently monitor their deliveries reduces the volume of WISMO inquiries and enhances satisfaction.
  3. Automate a delivery notifications system that proactively updates customers about their order status via email or SMS. These notifications can include order confirmation, shipment tracking, and delivery confirmation, keeping customers informed and minimising the need for manual follow-ups. Proactive communication about delays should minimise WISMO-questions and maximise customer satisfaction.
  4. Set clear and realistic expectations regarding delivery timelines during the checkout process. Communicate estimated delivery dates based on factors such as shipping method, destination, and order processing time to manage customer expectations effectively.
  5. Offer transparency and communication by providing customers access to dedicated customer support representatives who can address any inquiries or concerns promptly. Transparency regarding delivery delays or issues demonstrates a commitment to customer satisfaction and builds trust.
  6. Regularly evaluate and update tracking systems to ensure accuracy, reliability, and user-friendliness. Request feedback from customers to identify areas for improvement and implement necessary enhancements to the tracking experience.

By prioritising the implementation of advanced tracking technologies, enhancing self-service tracking options, and leveraging automated notification systems, businesses can effectively address the challenge of providing timely and accurate delivery updates. This proactive approach not only enhances the overall customer experience but also reduces the burden on customer support resources.

Want to know more about this topic? Read our in-depth blog article on reducing WISMO-questions.

3. Environmental Impact

The environmental impact of this challenge in last mile delivery, particularly in terms of carbon emissions, is a growing concern. Many governments are planning to achieve net zero emissions (or at least a huge reduction) by 25 years or shorter.

Companies are under pressure to adopt eco-friendly delivery methods such as electric vehicles or bicycle couriers to reduce their carbon footprint. But it is also possible to reduce it in other ways. For example, with implementing route optimisation software to plan more efficient delivery routes. By optimising routes, companies can reduce the distance travelled, fuel consumption, and emissions associated with last mile delivery.

Another thing your business can do, is consolidating multiple orders into fewer delivery trips helps minimise the number of vehicles on the road, reducing overall emissions. This can be achieved through strategies such as batch processing orders or implementing a hub-and-spoke delivery model, where you have a ‘centralised location’ (hub) and smaller workstations (spokes).

Last but not least, you can partner with logistics companies that prioritise sustainability and offer eco-friendly delivery options. Collaborating with like-minded partners can help companies align their environmental goals and reduce their collective carbon footprint.

4. Customer Expectations

In today’s era, customers expect faster delivery times and real-time tracking updates. Meeting these heightened expectations while ensuring cost-effectiveness is a challenge for companies striving to remain competitive. If you fail, customers will be become unsatisfied which could lead to negative reviews, order cancellations and more. Things your business wants to avoid at all costs, right?

The key to tackle this last mile delivery challenge is to be transparent. This means: clear promises, proactive communication on possible exceptions, access to tracking information at all times and more.

5. Address Accuracy and Limited Access Areas

Incorrect or incomplete addresses can lead to delivery delays and increased costs for companies. The same applies for delivery to remote or hard-to-reach areas that presents logistical challenges due to limited infrastructure and accessibility. To tackle this localisation challenge, you can do the following things:

  • Make use of address verification tools
  • Ensure improved communication with customers: No doubt they will realise that delivery in their area is trickier than usual, so clear communication on forehand will lead to understanding and no broken promises.
  • Partnering with local carriers: Make sure your company is able to connect with multiple carriers in a specific region. This will make it a lot easier to bring your delivery in time.

6. Seasonal Peaks and Surges

During peak seasons such as holidays or promotional events like Black Friday, the volume of deliveries increases, putting additional strain on delivery networks. More deliveries mean more customers, and some of them are here for the first time. That also makes this first introduction an instant make or break.

To leave a good impression on customer satisfaction, a number of things are important to be framed. Managing capacity and ensuring timely deliveries during these peaks is a big challenge. To overcome this challenge, consider implementing a scalable infrastructure and leveraging flexible resources such as cloud computing services.

  1. Scalable Infrastructure: Invest in a scalable infrastructure for your business that can easily accommodate spikes in traffic and orders during seasonal peaks. This may involve using cloud-based hosting solutions that allow you to scale up server capacity dynamically based on demand. Cloud hosting providers offer scalable solutions that automatically adjust resources to handle increased traffic, ensuring your business remains accessible and responsive during peak periods.
  2. Flexible Resources: During seasonal peaks, consider leveraging flexible resources such as temporary staff or outsourcing services to handle increased order volume and customer inquiries. Temporary staff can help with tasks such as order processing, customer support, and inventory management, allowing your team to focus on core business activities. Alternatively, consider outsourcing certain functions such as order fulfilment or customer service to staff from other departments or third-party providers who specialise in handling peak season demand.

By implementing a scalable infrastructure and leveraging flexible resources, you can effectively manage seasonal peaks and surges in demand for your business. This ensures a seamless experience for customers and helps maximise sales opportunities during peak periods.

7. Reverse Logistics

And last but not least: reverse logistics. Handling returns and managing reverse logistics adds another layer of complexity to last mile delivery. Companies must streamline the process to minimise costs and improve customer satisfaction. The benefit of defining return routes where they can choose multiple carriers per route to ensure efficiency and minimise return costs.

Return proposals generally come down to two main choices. In most situations, merchants are required to provide a refund to customers. However, there are exceptions, such as with personalised products, where returns may not be feasible.

When refunds are obligatory, merchants have two options: they can either charge a return fee or provide free returns.

However, online retailers have the option to propose alternative arrangements, such as providing store credit. Opting for store credit as a returns solution allows businesses to retain the customer’s money while offering a clear incentive for choosing this option.

Effectively communicating the benefits of store credit can encourage customers to select this option, as they can avoid repayment fees associated with traditional refunds. This creates a win-win scenario where the business retains revenue, and customers can return products without incurring additional costs.

Summary

In conclusion, there are numerous last mile delivery challenges for companies, ranging from WISMO-questions and rising costs to customer expectations and environmental concerns. Addressing these challenges requires a versatile approach involving technology adoption, operational optimisation, and customer-centric strategies. Companies that successfully navigate these challenges stand to gain a competitive edge in the dynamic world of logistics and supply chain management.

Incorporating solutions for these challenges needs proper care and expertise. If you have any questions about this, please do not hesitate to contact us. We are here to help you.

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