What Is Last Mile Delivery & Why Does It Matter?

In the competitive world of ecommerce, the last mile of delivery is where customers are won or lost. This critical stage of the logistics journey directly impacts the experience of your customers and shapes your brand’s reputation. Ready to unlock the secrets of last-mile success? Let's dive in.

Last-mile delivery is the final and most crucial step in getting products into customers' hands. This stage encompasses everything from the moment a package leaves the distribution centre to its arrival on your customer's doorstep.

Despite its short distance, the last mile is often the most complex and costly part of the delivery process, directly influencing customer satisfaction and brand loyalty. In this article, we'll explore what last-mile delivery is, why it’s so important, the challenges it presents, and how your business can optimise it for success.

What Is Last Mile Delivery?

Last-mile delivery is the final and most critical step in the logistics process, where goods are transported from a distribution centre to the end customer’s address. This phase is crucial because it directly impacts the experience and satisfaction of your customers.

Some key components of last-mile delivery include dispatch, the transportation itself, parcel tracking, and effective customer communication. It involves coordinating the delivery route, ensuring accurate and timely delivery, and often providing options for customers to track their orders and receive updates on delivery status.

Why Is the Last Mile Important?

The last mile plays a vital role in shaping the customer experience. It’s the final touchpoint, where your brand leaves a lasting impression, good or bad. A smooth and timely delivery enhances customer satisfaction and builds trust, while delays or issues can lead to frustration and negative reviews.

What’s more, a well-executed last-mile strategy can give your business a significant competitive advantage. In a world where speed and reliability are key, businesses that consistently deliver stand out, attract more customers, and drive loyalty. It’s certainly done Amazon no harm!

What Is the "Last Mile Problem"?

The "last mile problem" refers to the challenges and inefficiencies associated with the final leg of the delivery process, where goods are transported from a distribution centre to the customer. This stage is often the most expensive, making up roughly 53% of total shipping costs, due to factors like fuel, labour, and infrastructure requirements.

Fundamentally, the high cost stems from individualised deliveries, which involve more stops and longer routes compared to bulk transportation, and uncontrollable customer inputs, which may be vague, inaccurate or out of date.

As a result, it’s also where things most often go wrong – common issues include late deliveries, lost packages, and incorrect addresses, all of which will negatively impact a business's reputation.

What Are the Challenges of Last Mile Delivery?

Last-mile delivery is fraught with challenges that can significantly impact both costs and customer satisfaction. As the final step in the delivery process, it often involves navigating complex urban landscapes, coordinating multiple deliveries in a single day, and managing customer expectations for speed and reliability.

These challenges are made worse by traffic congestion, narrow delivery windows, and the growing demand for same-day or next-day delivery. Understanding these obstacles is key to improving last-mile efficiency and maintaining a competitive edge.

Here are some of the challenges you’re likely to face:

Cost and Complexity

The high cost per delivery is a major challenge in last-mile logistics. This stage can account for over half of total logistics expenses, driven by the need to deliver small packages to multiple, often dispersed, locations.

The complexity doesn't end there: optimising delivery routes is equally challenging. Inefficient routing increases fuel consumption, labour hours, and overall operational costs.

Getting these factors right while maintaining delivery speed and accuracy requires sophisticated planning and technology, making last-mile delivery a complex and costly proposition.

Time Sensitivity

Customer expectations for faster delivery, such as same-day or next-day services, put immense pressure on logistics providers to streamline operations. Meeting these demands often results in higher costs as companies race to shorten delivery times.

Urban congestion adds to the operational challenges of last-mile delivery. Heavy traffic and limited parking in densely populated areas slow down delivery times, leading to delays and missed delivery windows.

Address and Location Issues

Incorrect or incomplete addresses often lead to failed deliveries, resulting in increased costs and unhappy customers. These issues require additional resources to resolve, further complicating the delivery process.

Urban and rural locations each present unique challenges. In cities, dense traffic and limited parking slow down deliveries, while rural locations involve longer distances and fewer delivery routes, making timely and cost-effective delivery a challenge.

Reaching remote or hard-to-access locations further increases delivery time and costs, adding another layer of complexity to that final mile.

Customer Availability and Preferences

Failed delivery attempts happen when customers aren’t home to receive packages, leading to multiple delivery attempts that drive up costs and reduce efficiency. Each additional attempt adds to the complexity and expense of the last-mile process.

In addition, customers often prefer specific delivery windows, which further complicates scheduling and routing. Delivering on your customer preferences requires careful planning, making it harder to optimise delivery routes and manage costs effectively. Balancing the expectations of customers with operational realities is a key challenge of the final mile.

Technology Integration

Due to the scale and complexity of final-mile operations, it can be difficult to implement real-time visibility of your deliveries, which frequently leads to mismanagement and delays. We’ve gotten used to accurate tracking and updates, but logistics providers can struggle when this data is unavailable.

Even where it is available, data management presents its own challenges. Handling and utilising vast amounts of data – from traffic and weather patterns to customer preferences – can give you a real edge in optimising delivery routes and schedules. However, useful integration of this data requires sophisticated technology and skilled labour to wield it, making it a big ask for many smaller enterprises.

Environmental Impact

Sustainability is a serious concern in last-mile delivery due to the greater environmental impact of frequent, small-scale deliveries. Each trip ratchets up your emissions, especially in urban areas where congestion leads to idling engines. As consumer awareness and pressure increases, companies must take steps to reduce their last-mile carbon footprint.

Although businesses are exploring greener alternatives, like electric fleets or bike couriers, these eco-friendly solutions come with their own set of challenges. For a start, the initial investment in sustainable technology can be high, and the logistics of implementing new delivery methods requires careful planning.

Despite these hurdles, the shift towards more sustainable practices in last-mile delivery is essential for meeting regulatory demands and shifting customer expectations.

Scalability

Although many businesses operate successful last-mile strategies during normal times, scaling deliveries during peak periods, such as holidays or major sales events, can cause real strain.

A sudden surge in demand can completely undermine existing infrastructure, leading to delays and an uncharacteristically poor delivery experience for customers.

To manage these spikes, companies must dedicate time and resources to improve the flexibility and responsiveness of their logistics networks. However, a flexible logistics solution often demands sophisticated (and expensive!) technology and a well-trained, well-coordinated workforce.

Security and Theft

Package theft, or ‘porch piracy’, is a growing threat for online shoppers in the UK, increasing by over 50% in the 12 months up to June 2023 alone. Simply put, the rise in online shopping has led to more unattended packages on doorsteps, making rich pickings for opportunists and organised thieves.

Many companies are adopting secure delivery methods, like signatures on delivery, secure lockers, or delivery notifications to encourage customers to pick up packages promptly.

But it remains a considerable challenge. Businesses will need to continually innovate and adapt delivery strategies to stay one step ahead and maintain customer confidence.

Regulatory Compliance

Local regulations are another particular challenge in last-mile delivery. From parking rules to ULEZ, local regulations can vary widely and change frequently, requiring companies to continually review and update delivery strategies to remain competitive and compliant.

Labour laws can also trip up small business owners, especially with the rise of the gig economy across delivery roles. Companies must ensure that they adhere to requirements around minimum wages, working hours and safe working conditions, which can be more difficult to manage across less traditional working arrangements.

How Can I Improve Last Mile Delivery?

It’s a long list of challenges, but improving your last-mile delivery doesn't have to be an overwhelming task. With the right strategies, you can take a chunk out of your long-term costs while boosting delivery speed and accuracy.

Here you’ll find some broad areas that you should investigate to overcome common issues and keep your customers happy long into the future.

Optimise Your Routes

It’s the beating heart of the last mile: optimising your routes can help you to tackle many common last-mile conundrums, from congestion to delays.

Start by implementing routing software that uses real-time data – like traffic conditions, delivery windows, and distance – to create the most efficient routes. Although it will come with a price tag, routing software can save you money in the longer term by reducing fuel consumption, labour costs, missed delivery windows and more.

If you want to get sophisticated, give dynamic routing a try, too. By adapting routes in real time to account for unexpected delays or changes, you can ensure that deliveries stay on schedule, keeping customers happy and your operations running smoothly.

Leverage Technology and Automation

Don’t stop at routing software – technology is the most powerful tool available to deliver more packages on time. Start by providing real-time tracking to both customers and drivers. Real-time data boosts transparency, reduces missed deliveries, and enhances the overall customer experience.

You can also work to automate the dispatch process. If you can automatically assign deliveries to the nearest and most suitable driver, you will reduce travel time and labour costs while getting more packages out the door.

Improve Customer Communication and Flexibility

Flexible delivery options are key to boosting customer satisfaction. Give your customers the ability to choose delivery times or pickup locations to increase convenience and reduce missed deliveries.

Proactive communication is equally important. Keep your customers informed about their delivery status with real-time updates, and allow them to make changes if needed. Giving customers the chance to preemptively resolve delivery issues enhances their experience, but it also reduces the likelihood of failed delivery attempts, saving you time and money.

Verify Addresses and Use Geolocation

Address verification at the point of order is a simple yet effective way to reduce the chances of delivering to incorrect or incomplete addresses. With address verification tools available out of the box across many ecommerce platforms, this step can quickly prevent costly delivery errors and save you money.

You can also use geolocation services to help pinpoint exact delivery locations, especially in rural or hard-to-find areas. An easy solution is to add a service like what3words to your checkout, giving your drivers clear geolocation data that is simple for customers to understand.

Make Data-Driven Decisions

The right data can take the guesswork out of your last-mile delivery strategy. Begin by regularly reviewing delivery data to identify bottlenecks and patterns in poor execution.

For example, time spent at each delivery stop can reveal inefficiencies, such as long customer interactions or difficulty locating addresses, while big differences in actual and planned driving distances might suggest inefficiencies in routing. These insights will help you refine your processes and boost performance over time.

You can also take it a step further with predictive analytics. Try forecasting demand, optimising inventory locations, and anticipating potential delivery issues to stay ahead of the curve.

Enhance Delivery Infrastructure

If your deliveries are concentrated in a few key areas, try decentralising your warehouse by establishing micro-fulfilment centres close to these areas. Local distribution centres ensure that products are readily available near your customers, shortening delivery times and cutting costs.

If a new warehouse is out of budget, you could also partner with a 3PL to serve customers in specific locations, outside of the cost-effective zone of your own warehouses and fleet.

When it comes to your fleet, take another look at your vehicles to ensure that they are the right match for your most popular products and delivery routes. Both of these factors can change over time, so continuous evaluation to tailor your fleet to the geography and nature of your deliveries is a smart move.

What’s more, if electric vehicles or e-bikes make sense for your business, fleet adjustments can help you meet sustainability goals as well as improving the customer experience.

Improve Last-Mile Workforce Efficiency

Give your last-mile workforce the right training to deliver better results and improve job satisfaction. A successful last-mile delivery infrastructure requires a highly motivated team that’s equipped with the skills and tools they need to perform their jobs effectively.

Some ideas might include:

Route Optimisation Training: Teach drivers to use GPS and route planning tools more effectively.
Time Management Skills: Equip drivers with techniques and procedures to prioritise tasks and handle delays.
Customer Service Training: Enhance communication skills for better customer interactions.
Technology Training: Ensure comfort with delivery apps and troubleshooting common tech issues.
Safety and Compliance: Provide defensive driving and safety regulation training to reduce accidents.
Stress Management: Offer stress reduction techniques and wellness programs to prevent burnout.
Feedback and Continuous Improvement: Foster a culture of feedback and regular performance check-ins.

Enhance Security and Delivery Confirmation

To reduce the risk of theft and disputes, consider introducing secure delivery options like lockers, smart boxes, or simple photo confirmation upon delivery. Secure delivery solutions offer peace of mind for both you and your customers.

The simplest option is usually to ensure that digital proof of delivery is collected for every package. This can include digital signatures, photos, or other forms of confirmation, helping to verify successful deliveries and resolve any potential disputes quickly and effectively.

Implement Sustainability Initiatives

Embrace sustainability by offering eco-friendly delivery options, such as carbon-neutral delivery, and encouraging customers to choose these greener alternatives. It may increase costs, but it will also reduce your carbon footprint and help your business stand out to environmentally conscious consumers in an increasingly competitive online marketplace.

Another option is to reduce or optimise your packaging. By reducing waste and minimising package sizes, you can lower the environmental impact of your deliveries and cut costs. Smaller, lighter packages can be packed more densely and consume less fuel, contributing to a more sustainable, cost-effective last mile.

Build in Scale

Scalability is key to maintaining delivery performance during peak times like holidays or sales events – your most critical moments. Start by developing flexible staffing plans that allow you to scale up your workforce as needed, ensuring you can handle increased demand without compromising service.

We also recommend expanding your network of trusted delivery partners. Establishing good relationships with third-party logistics partners can help manage overflow during high-demand periods, ensuring that all orders are fulfilled on time and customers remain satisfied even during your busiest seasons.

Let Us Take Care of Last Mile Success

The last mile of delivery is where many ecommerce businesses falter. It's complex, costly, and critical for customer satisfaction. Get it wrong, and you risk losing customers and damaging your brand.

Every delay, wrong address, or failed delivery attempt chips away at your reputation. The pressure to deliver fast and flawlessly can be overwhelming, especially when you're juggling so many other aspects of your business.

At Tap'in, we specialise in taking the burden of the last-mile off your shoulders. From route planning to packaging, our team is equipped with cutting-edge logistics tools and expert knowledge of delivery in London and the UK. We’ll ensure that your products reach customers quickly and reliably, every time.

Focus on growing your brand – let us handle the rest. Get in touch today to see how we can simplify your last mile.