There has been an exponential growth in online shopping over the years that has continuously pushed businesses to improve their logistics. It is estimated that last-mile delivery accounts for almost 53% of the total delivery costs, according to an article by PwC in 2019. This makes it extremely important for logistics providers to look for any significant challenges in this process and figure out their solutions.
Here are the top 3 challenges in the last-mile delivery industry and their solutions:
#1 High Shipping Costs
Costs are important to every business operation. And the last-mile delivery often gets expensive due to lack of planning, delayed delivery penalties, and other inefficiencies in the process. The increasing demand for same-day or quick deliveries by customers may also result in higher shipping costs.
Since the cost of delivery is directly related to the distance between the pick and drop points of the packages, the delivery routes should be optimized to prevent any unnecessary delays. Courier and dispatch software and GPS tracking can be used for route optimization which can significantly bring down the shipping costs, according to a blog published by Key Software Systems.
#2 Delays in Delivery
In this fast-paced age of same-day deliveries, businesses can lose their customers if there are any delays in the delivery schedule. Its importance can be seen from the fact that nearly 13% of customers said that they may not order again from the same place in case of a late delivery, according to a survey by Oracle in 2019. Several factors can cause delays in the last-mile deliveries such as road closure, transport glitches, etc.
Advanced dispatch software allows businesses to find the most optimal route using GPS technology. It considers things such as traffic density, road blockages, and any stops the driver is required to make faster deliveries. Maintaining prompt and timely deliveries is the sure-shot way to ensure customer satisfaction.
#3 Returned Deliveries
Packages are often returned due to customer unavailability, an incorrect address, or maybe the customer didn't like it. It increases the delivery's potential costs and adds a burden on the logistics company.
Companies should have a proper returns management plan in place to minimize the costs of product returns. They should also ensure robust inventory management. These measures will reduce the capital tied into inventory and will improve the overall transparency of the delivery process.
The last-mile delivery landscape is rapidly changing. Companies have to constantly adjust to this transforming industry and overcome the challenges that come with it. The sooner the automated delivery systems and highly planned solutions are put in place, the sooner their productivity and efficiency will improve.