What is Last Mile Delivery Optimization? Benefits, Challanges & Solutions

In recent times, the supply chain has been an essential part of all businesses. Everything comprises logistics from receiving orders to getting them delivered to the customer’s doorstep. From local courier facilities to international deliveries, logistics is everywhere. It is easy to order stuff online, but the process of order execution and completing last mile delivery is far more hectic.

In this blog, we will be discussing “last mile delivery optimization,” one of the most crucial steps of the delivery process.

What is Last Mile Delivery?

Last Mile Delivery can be defined as the process of delivering a shipment from a transportation hub to the final delivery destination. This means that you’ve reached the last phase of the supply chain management process and are almost at the end of your journey.

So, it is imperative to get this phase right to ensure that you can make last mile deliveries on time and in excellent condition, both of which play an important role in customer satisfaction.

Why is Last Mile Delivery Optimization Important?

Last mile delivery optimization is the process of optimizing your delivery operations and customer experience to meet customer expectations. It’s designed to help you build your brand, get more repeat customers, and boost sales. In short, last mile delivery optimization focuses on improving all aspects of the last step in a product’s journey from manufacturer to consumer.

Even though last mile deliveries may be small and considered routine, they can take up a lot of time and money. Imagine the hundreds of deliveries made by a large company each day. Businesses with many customers often have to distribute their products to multiple locations across the country.

Businesses need to find ways to optimize their last mile delivery process to maximize efficiency. Companies look for ways to reduce costs and drive profitable growth in their transportation operations to accomplish this, and this is where route optimization software comes into action.

Steps to Optimize Last Mile Delivery

1. Data Collection

As we know, data collection is now considered an asset by the companies. Data helps the brand understand its existing consumers, target consumers, and study its competitors. For logistic businesses, data holds more importance as it’s all about customers’ ratings and trust. 

The data and analytics have provided huge scope for the end-user to understand customer behavior, improve the delivery experience, and reduce cost. Here are a few reasons why data holds importance in last mile delivery optimization. 

According to a study by Precedence Research, the last mile delivery market is growing at a CAGR of 10-20% and is likely to hit US$ 424.3 billion by 2030. That means a huge customer base with vivid data is about to confront the business. So, only the ones with more data analytics and data management would be able to survive.

This data can be used to study the overall needs of the customer. Data includes customer’s need for delivery, estimated time and the average time for each delivery, customer reviews and complaints, traffic conditions, vehicle load capacity, and accessible routes.

Properly executed data analytics can also help e-commerce sellers improve inventory forecasting, reduce spoilage, minimize returns by providing more accurate product information, improve customer service, and increase revenue through streamlined marketing efforts.

It can help convert your customer’s dissatisfaction to satisfaction. Collecting and storing such data and using it for business growth are all needed to understand and satisfy your customer’s needs.

2. Planning and Execution

Optimizing the last mile delivery is a challenging task for businesses. Planning offers a strategic approach and helps reduce costs, increase efficiency, enhance customer experience, and improve overall performance. 

Planners must consider customer-specific needs and preferences at every stage of last-mile delivery optimization. They must identify the most sought-after routes and time slots for the last mile delivery operations of products based on this customer segmentation.

To execute these plans, customers should have greater visibility into their orders from the moment they are placed till they are delivered. This can be done through trackers that provide real-time information about where their orders are located and when they will reach them.

Proper planning and its execution in last mile delivery operations have many benefits like

• reducing the cost of transportation
• enhancing the customer experience
• helping in improving efficiency
• increasing productivity
• minimizing risk factors

3. Technological Implementation

Traditional last mile delivery operations have many loopholes like miscommunication in rural areas or areas with no network, which may result in more delivery time, or, in some cases, packages being returned back to the warehouse. Customers want their deliveries as fast as possible, but major logistics have no provision to facilitate deliveries early.

Sometimes, due to bad weather or heavy traffic, deliveries are delayed, which is obviously not in the control of the logistics company. But now, using technologies like Google Maps, high-end tracking systems, and route optimization, it is avoidable.

Delivery route optimization can be done well by using data analytics, and it helps reduce fuel costs and carbon footprints. This technology will soon replace GPS systems as it will provide more efficient delivery routes from one place to another. 

Route Optimization Software like Upper Route Planner uses predictive analysis to find out optimal routes for delivery professionals. It will analyze the past trends and calculate many routes with various combinations of factors like traffic, weather conditions, and vehicle capacity.

4. Inventory/Warehouse Management

One of the other last mile delivery strategies is the selection of warehouses.

The need for warehouse space increases as your business grows. But, many companies fail to plan their warehouse space according to their requirements and end up facing challenges in the last stage of delivery. To avoid it, invest in an appropriate warehouse and different warehouse equipment that can help you fulfill the orders efficiently.

Use your old customer data to identify your major area of operations. It will help you choose the nearest location to set up your warehouse, saving time and decreasing operational vehicle costs.

Also, make sure to install a Warehouse Management System (WMS) in your warehouse, which will ease the process and increase your last mile delivery efficiency.

A good Warehouse Management System helps you store products in the most optimized way so that you can find them easily when needed. It reduces physical labor and increases productivity by using advanced technologies like RFID, robotics, sorting and scanning devices, and inventory management software.

The Modern Warehouse Management System integrates all your business systems into a single platform, making data processing much easier, faster, and more accurate. It enables you to get real-time insight into your inventory levels so that you can plan your routes accordingly. It also helps coordinate incoming and outgoing shipments within the warehouse, thereby improving order fulfillment time and customer satisfaction.

So, when you start experiencing an increase in orders, make sure that you have enough space to store them for packaging and shipping purposes.

5. Proof of Delivery

Proof of Delivery is the last and most crucial step in last mile delivery. The customer receives proof of delivery (POD) when the driver or courier hands them the package. It’s also used to show proof to shippers that the package was delivered, sometimes in order to get paid. A POD can be a physical document that goes through paper trails, or it can be digital.

It can be used as proof in case of any dispute as essential data like the name of the recipient, delivery address, and day & date of delivery is mentioned on it. This evidence ensures that goods were delivered on time and as expected, which is beneficial for both the seller and the customer.

The Proof of Delivery feature of the Upper Route planner is unmatchable. Its exceptional benefits make it more than just a traditional proof of delivery software. Using Upper Route Planner, drivers can capture a photo of their delivered package to prove their on-time delivery. It eradicates the use of manual paperwork by adopting a digital proof of the delivery system. It provides real-time updates of successful deliveries.

Challenges in Last Mile Delivery and Its Solutions

There are several factors that make last mile delivery complicated.

• First, the sheer physical distance makes it challenging to manage from a logistics standpoint. Many a time, the location of your storage facility is far away from delivery destinations. It may result in a slow delivery rate and customers’ disappointment. To deliver quickly and efficiently, make sure to try Upper Route Planner, which can optimize routes for up to 500 deliveries at once. 
• Second, manual data entry makes the task more hectic. When the delivery manager assigns deliveries, they manually need to make a list of packages and allow them to their respective drivers. It is feasible up to a few numbers of deliveries. But if it’s in hundreds, it becomes hectic for them. To overcome it, use route optimization software like Upper Route Planner, where you can import all the data from your excel sheet in just a few clicks.
• The third is the issue of cost: as we mentioned above, last mile delivery can be pretty expensive. This comes down to logistics again — transportation costs increase significantly the further away a destination is located from a distribution center or fulfillment facility. And since there are more residential addresses than business addresses in most areas, this is where many packages end up going.

You can use Upper Route Planner, which optimizes and gets you the best route for all of your deliveries. It can manage up to 500 deliveries in just one click, saving up to 40% of fuel costs and ultimately saving your operational costs.

Conclusion

It is important to adopt new business advancements to keep up with technological evolution. Especially in the logistics business, it is necessary to match your last mile delivery performance with audiences’ expectations. Ensure to manage your logistics and adopt tools and software that make your business operate hassle-free.

Talking about easing the process, Upper Route Planner plays an important role. It is an easy-to-use route optimizing software, comprising many features. You can add up to 500 delivery stops in a few minutes. 

Using it, you can serve 40% more customers at the same time and get a detailed report on your delivery operations. To know how this software helps your business, get a 7-day FREE trial and explore a range of features.