Last-mile: What is it?

Everything you need to know about Last-mile

In this post "Everything you need to know about Last-mile" we focus on what Last-mile is and how it works as a delivery process.

Last-mile is the final part of the supply chain. Here, packages will be sent from a distribution center to the end customer. It is often the most time-consuming and costly part of the delivery process. Here you can read about why the last mile is so important.

Why is Last-mile time consuming?

When a company uses a last-mile logistics partner, over 1000 parcels can be sent per day. This means there are many stops and short distances. The driver must deliver to individual addresses, which means more handling and lower speed.

Urban traffic, rush hour, roadworks and other difficult access conditions can delay delivery. These are unforeseeable things that you can't optimize for.

Delivery times often need to fit customer availability, and failed delivery attempts create extra trips. Many deliveries, especially those that require a signature, personal receipt or access to the building, can 't just be left at the door.

Therefore, the driver must either:

Wait for the customer to come home
Coordinate a specific time slot
Try to gain access via hallways, gate codes or the front desk

If the customer is not available or if the access conditions are not working (e.g. wrong gate code, locked door, customer not answering the phone), the driver ends up with a failed delivery attempt.

Why is Last-mile costly

Last-mile typically consists of many small deliveries spread over a larger area. This means:

Fuel consumption increases because vehicles are constantly stopping and starting, driving short distances and often in city traffic.
The labor costs per package are high as the driver spends a relatively long time on each delivery compared to earlier stages of the supply chain where large volumes are moved in one go.
The handling time per parcel is higher as the driver has to find parking, go to the customer's door, scan, deliver and possibly communicate with the customer. Overall, a lot of resources are spent on relatively few items.

Demand for flexibility and speed

Customer service and market competition are pushing businesses to deliver faster than ever:

Same-day and overnight delivery requires that there are always enough drivers and vehicles available, even when volumes fluctuate.
Extra routes often need to be driven to ensure fast delivery times, even if the vehicles are not optimally filled, which increases the unit cost.
High flexibility in time slots (e.g. delivery between 18-21 or within 1 hour) requires precise planning, backup capacity and often several small vehicles, which are more expensive per delivery. All of this makes operations more expensive because you have to oversize capacity to meet customer expectations.

Complex equipment and technology

Efficient last-mile requires advanced technological solutions to ensure speed, customer satisfaction and tracking:

Route optimization software is necessary to minimize time and distance, but it requires licenses, integrations and maintenance.
Real-time tracking requires hardware in the cars and apps in the drivers' hands.
Customer communication as automated SMS messages, live trackingdelivery updates, etc. require systems that can handle large amounts of data and integrations for order and inventory management.
Mobile devices and scanners for drivers are needed for signatures, scans, documentation and navigation.

basis. In short, industry associations act as a seal of quality and a shortcut to trustworthy partners.

Customer experience is decided in Last-mile

Even if the rest of the supply chain works perfectly, it's the last part that customers remember. A fast, accurate and friendly delivery can significantly increase customer satisfaction. Conversely, one bad experience can damage the relationship in a collaboration or the brand.

What is the most important takeaway from last-mile logistics?

Last-mile delivery is both time-consuming and costly due to many stops, high demands for flexibility and the need for advanced technology. It is also the part of the delivery that most affects the customer experience and is therefore crucial to the success of the business.