One of the hottest topics in the world of fulfillment? Last mile logistics. And it comes as no surprise, given the increasing consumer demand for quick, error-free shipping. As e-commerce continues to skyrocket, businesses will face new challenges and mounting pressure to deliver a seamless last mile logistics experience for their customers. With over 20% of purchases expected to occur online – up from 17.8% in 2021 – businesses simply can’t afford to get it wrong.
From order tracking to accelerated delivery time, consumer expectations continue to increase year over year. In fact, last mile logistics in North America alone is forecasted to grow a whopping $62.71 billion between 2023-2027. That’s a massive number! Try and wrap your mind around that.
Last mile logistics is not only an integral piece of supply chain management, but it’s also often the most challenging aspect. To drive business growth and ensure your company is positioned for success, here’s everything your need to know about last mile logistics.
What is Last Mile Logistics?
Last mile logistics refers to the last leg of delivery – i.e. transporting goods from the warehouse to their final destination. The goal? To ensure delivery is as speedy and cost-effective as possible. Your business can bolster customer satisfaction and long-term retention rates by increasing delivery speed and minimizing hiccups. Companies like FedEx, UPS, and Amazon all serve as last mile carriers, with their own arsenal of vehicles responsible for successfully delivering packages to the end customer.
Supply Chain Success and Last Mile Logistics
Last mile logistics can make or break the customer experience. And let’s face it: if the customer experience isn't prioritized in today’s competitive landscape, you might as well throw in the towel now. Business faces some common challenges when their last mile logistics strategy isn’t executed properly. From process inefficiencies to high operating costs to unhappy customers, there’s a multitude of factors to take into consideration when formulating your last mile logistics strategy.
Today’s consumers expect to receive their orders quickly and on time. And with the rise of the Amazon Effect – i.e. 2-day delivery – delivery options and expectations across all freight types have increased. In other words, quick shipping is no longer simply nice to have. Instead, it has become integral to establishing a competitive presence in an otherwise saturated market.
Take a moment to picture it from a consumer perspective. Let’s say you’re waiting for a food delivery and without it, you have nothing to cook for your loved ones for dinner that evening. Or, you’re hosting a business conference, and the materials you ordered are now delayed – completely throwing a wrench in your plans.
Not delivering on time can truly damage your brand’s reputation and cause a major hit to your button line over time. The same can be said for failing to offer two-day shipping. Consumers are actively looking to purchase from brands that can deliver their goods quickly and efficiently. Weaving shipping language into your marketing language effectively boosts consumer interest and converts more prospects into customers.
To compete with a marketplace like Amazon or larger retailers, your business will need to invest in the infrastructure and technology needed to quickly fulfill and deliver goods in a manner that doesn’t completely eat away at your profit margins.
Leverage a 3PL to Fuel Your Last Mile Logistics
Expertly managing multiple facets of the supply chain – from order fulfillment and tracking to shipping costs – calls for having the right partner on your side. Failing to implement a strong last mile delivery strategy can wind up costing your business an estimated 26% profit loss over the three-year period. With the right third-party logistics (3PL) company in your corner, you can effectively streamline fulfillment and optimize your delivery process to bolster the customer experience and drive long-term growth.
So, how exactly can a 3PL help? Here’s a look:
- Decreased Overhead Costs: As your needs evolve – whether that be to accommodate a sudden increase in sales due to seasonality or because you’re expanding into new markets – a 3PL has the tools and technology needed to help you seamlessly scale.
- Carrier Relationships: 3PLs have long-standing relationships with a variety of carriers, allowing them to offer different shipping options, meet demand, and keep costs low.
- Inventory Distribution: A large component of executing last mile logistics successfully requires an inventory distribution strategy. The right 3PL will have multiple warehouses nationwide to ensure products are housed in key markets. Storing inventory closer to the demand can minimize the time, travel, and expenses associated with last mile delivery.
- Backed by Data: The right logistics partner will also be able to provide forecasting models and analytics to drive business decisions and ensure profitability is trending upwards.
The Last Mile Is the Most Important One
At Smart Warehousing, we have 38 locations from coast to coast to put inventory closer to the end consumer and strengthen the last mile delivery experience. From shipping discounts to the ability to satisfy consumer demand for quick shipping, we help our clients deliver value, boost customer loyalty, and improve their bottom line. Learn more about how the Smart Warehousing team can optimize your logistics strategy by contacting us today.