If you have never heard of last mile delivery, you might not realize the impact that it can have on a business’s profits. Maybe you have heard of it but don’t really know what it means and how it impacts a business.
Last mile delivery is the name given to the last leg of a delivery journey where the product is taken from the distribution hub to its final destination (i.e., customer’s door). According to Shipping and Handling of Texas, providers of ecommerce fulfillment services and logistics, last mile delivery can really have a serious impact on the success of a business.
Why is Last Mile Delivery Important?
While every single stage of a product’s movement from production to warehouse to store or consumer is important, it is the last stage from transportation hub to consumer that is the most important. But why is this?
The reason last mile delivery is so important is because this is the stage where it gets to the final customer, who nowadays wants it as fast as possible. Efficient, speedy deliveries are the key to success and can be the make-or-break clause that gets a company the sale. When faced with two competitors selling the same product, most customers will opt for the one that can get the goods to them in the quickest time.
The rise of ecommerce has meant that delivery times are getting much quicker and those who can offer a speedy and accurate service are capitalizing and making huge profits. The days of charging higher shipping rates for next day delivery are slowly ebbing away thanks to the likes of Amazon and other big players offering ‘free next day delivery’, or even same day in some cases.
How Last Mile Delivery Affects Profit
If your company prioritizes last mile delivery, it can have a positive impact on your profits. Making sure it works well will leave customers feeling satisfied and more likely to order from you again and/or recommend your company to others.
However, if you do not place any focus on this area of your business, last-mile delivery mistakes can happen; and these are expensive.
A sizable portion of the shipping costs your company will incur are last mile delivery. This is where a business must be extra vigilant when choosing cost-effective routes. Many will outsource this part of their business to companies with a reliable track-record in last mile delivery. Labor and fuel costs are high, especially in urban areas. Choosing the most strategic routes is vital to keep costs down and profits up. Any failure to deliver on time could lead to unhappy customers and cancelled orders. If a customer does not receive the correct order, the driver will need to return to collect the order and deliver the right one. This means higher labor and fuel costs.
How to Make Last Mile Delivery Work
Unless you are outsourcing your last mile delivery, you will need to take steps to make it work effectively for your business. You can do this by optimizing routes for your drivers. Some businesses will use route planner apps that help them to create the most efficient routes based on real-time traffic updates.
Keeping your customers informed throughout the delivery stage will help to reduce multiple delivery attempts. With regular updates, your customers are more likely to be home when you deliver.
Developing a system that allows drivers to quickly locate the package they need to deliver is another way to make last mile delivery work for you. This might mean loading the van according to delivery stops or using a package finder app.