Did you know that last mile delivery can account for up to 53% of total shipping costs? Customers have high expectations for speed and accuracy, which places incredible importance on the final delivery touchpoint.
Last mile delivery is the final phase of the delivery process. It is the movement of goods from a transportation hub, like a fulfillment center or warehouse, to the final delivery destination. While it may be the shortest distance in the supply chain, it’s often the most complex and expensive due to the high demand for fast, precise deliveries.
This is where 3PL last mile delivery becomes a valuable solution. By partnering with a third-party logistics provider (3PL), businesses can streamline the last mile through advanced routing technology, strategic warehouse placement, and proven carrier relationships, all designed to reduce cost and improve delivery speed.
An increasingly popular strategy within last mile logistics is direct injection shipping. This involves transporting bulk shipments directly to a local carrier hub. By “injecting” parcels closer to the end destination, businesses are able to minimize long-haul transit times. This strategy is particularly advantageous for businesses with large shipping volumes.
The final leg of the delivery journey generally increases in cost every year. As the market and new businesses grow, the demand for last mile delivery has also grown.
Major carriers like FedEx and UPS continue to implement rate hikes due to growing market demand and rising operational expenses like fuel prices and labor costs. As shipping volumes surge and carriers become more strained, these price adjustments have become a standard response. These increases directly affect the cost of last mile delivery, making it more challenging for businesses to stay competitive without a strategic 3PL partner.
The expansion in ecommerce has led consumers to expect faster and more flexible options. Two-day and next-day shipping have become requirements for customers, pressuring businesses to expedite their last mile logistics. Meeting these demands often requires premium shipping services, advanced tracking systems, and increased labor.
Third-party logistics companies leverage several solutions to help cut last mile delivery costs. 3PLs like Smart Warehousing also offer additional strategies for reducing shipping expenses beyond last mile delivery.
Warehouse locations play a huge role in efficiency and cost of last mile delivery. The closer a product is to the end customer, the lower the delivery cost. When warehouses are strategically placed near main transportation hubs or interstates, they help shorten delivery routes, which then decreases the shipping cost.
Smart Warehousing operates 30+ warehouses across the country, enabling nationwide two-day shipping. This coast-to-coast coverage shortens delivery distances and lowers last mile delivery costs.
Strong relationships with reputable carriers are one of the biggest ways 3PLs drive down last mile costs. Since third-party logistics companies manage high shipping volumes across multiple clients, they’re able to negotiate discounted carrier rates that individual businesses typically wouldn’t have access to on their own. These partnerships allow 3PLs like Smart Warehousing to pass along significant cost savings to their customers.
Another way 3PLs can reduce last mile delivery costs is through the use of advanced technology. By leveraging real-time tracking and route optimization tools, 3PLs streamline the delivery process, making the last mile delivery stage quick and efficient. These technology tools help identify the most efficient delivery routes to ensure your product is traveling the most cost-effective way.
A major reason businesses are turning to 3PLs for last mile delivery is the ability to offload the complexity of managing transportation operations. Coordinating deliveries, maintaining carrier relationships, handling claims, and ensuring quality performance all require time, resources, and specialized knowledge. By partnering with a 3PL, companies can rely on experienced logistics professionals who handle these responsibilities every day. This not only reduces internal workload, but it also ensures a higher level of service as 3PLs bring proven processes and industry expertise to the table.
The pressure to provide fast, reliable, and cost-effective shipping has led companies to focus more on their last mile delivery services. This is especially true in industries like retail and ecommerce, where timely and accurate deliveries influence customer satisfaction, retention, and ultimately, brand reputation. A poor last mile experience, such as delays or damaged products, can quickly harm a brand’s image. In order to meet these needs and avoid negative customer feedback, companies are partnering with third-party logistics providers and investing in 3PL last mile delivery solutions.
Industries that handle perishable goods or high-value items also significantly benefit from a 3PL’s specialized transportation network as it provides real-time tracking and mitigates risk with strategic delivery routes.
Having access to a well-established 3PL’s transportation network offers a variety of benefits when it comes to last mile delivery. An end-to-end third-party logistics provider like Smart Warehousing brings more to the table than just trucks and tracking. They offer full-service integrated solutions that enhance the customer’s final delivery experience.
One of the main advantages of working with a 3PL is faster last mile delivery. Businesses and customers gain full visibility into the delivery journey through real-time tracking systems. This boosts the customer experience by offering peace of mind with accurate ETAs and proactive updates. When speed and transparency are expected, 3PLs like Smart Warehousing provide the tech-driven edge companies need.
Unlike standalone delivery services, 3PL providers offer end-to-end logistics, combining warehouse operations with optimized transportation routes. This level of integration allows for quicker order fulfillment and fewer handoffs, which result in smoother last mile delivery transitions. With inventory strategically placed and ready to move, businesses can meet demand with agility and precision.
Experienced 3PLs with a transportation network bring deep logistics expertise, helping companies navigate supply chain disruptions and manage carrier issues. For example, Smart Warehousing has a specialty packaging program with FedEx that significantly reduces the risk of product damage during transit. Products are engineered and packaged to withstand shipping conditions, and if breakage occurs, customers can file a freight claim that’s paid immediately – no questions asked. This level of protection adds a layer of reliability that’s hard to achieve without an established partnership.
As your business grows, so does your logistics strategy. A third-party logistics provider offers scalable last-mile delivery solutions that can adjust with peak seasons, rapid growth, and shifting customer demands. Whether you’re expanding into new markets or have fluctuating order volumes, a 3PL’s transportation network is built for adaptability. Scaling your operations without sacrificing quality of service is a major benefit businesses gain when using a trusted 3PL like Smart Warehousing.
What should businesses look for when choosing a 3PL partner to handle their last mile delivery? Smart Warehousing's Director of Transportation and Procurement, Lori Gorman, states:
“Evaluating carrier relationships and service offerings is one of the most important factors businesses should look at when selecting the right 3PL partner.”
The quality of those partnerships and service levels can directly impact shipping reliability and overall customer satisfaction.
When assessing a 3PL’s transportation network, it’s important to ask the right questions:
These questions give insight into how a 3PL operates behind the scenes, and whether they can consistently deliver the level of service your customers expect.
Last mile delivery tends to be the most expensive portion of the supply chain because it’s tied to the quality of service a business pays for. While low-cost carriers may reduce shipping expenses, they can lead to other costly issues like damaged products, delayed deliveries, and poor customer experiences.
Smart Warehousing prioritizes quality by partnering with trusted national carriers like FedEx, USPS, UPS, and DHL. These vendor relationships provide our customers with peace of mind, risk mitigation, and a better experience for both the business and its customers.
Another key factor to consider when choosing a 3PL partner for last mile delivery is the strategic placement of their warehouse locations. A third-party logistics company with warehouses in major distribution hubs, specifically near main interstates and ports, can significantly shorten transit times. Close proximity to transportation routes means your products are closer to your end customer, creating a more efficient last mile delivery process. It’s also important to evaluate the cost of labor and real estate in these locations as it can affect overall expenses.
Choosing the right partner for last mile delivery can be the difference between positive customer experiences and costly inefficiencies. Smart Warehousing helps businesses protect their brand reputation by leveraging trusted partnerships and ensuring complete visibility.
If you’re ready to improve your last mile delivery strategy and want to create a better experience for your customers, connect with our team today to learn how we can help!