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Why is last mile logistics so important in business?

Every product you use has come a long way, often thousands of kilometers. From material producers, through production lines, containers, warehouses, finally coming into your hands. The whole process is complicated and multi-stage, and to be accurately carried out, each phase should be smooth and quick. However, this last stage of the whole journey is the decisive one, it is the final touch, the culmination of all activities. We call it “the last mile”.

 

A marathon with a sprint finish

 

The moment when courier takes the package for delivery starts the “last mile” – a stage that is some kind of race against time on the track between the warehouse or distribution center and the customer’s home. Until this time, all logistics was carried out massively. The production and transport of the product took place in large batches and each component process was a multiplication of certain pre-planned activities. It is the “last mile” phase, when the supply chain breaks down into small pieces. Each copy of the product goes in its own direction, towards its future owner.

There are millions of such products. There are also millions of customers waiting for their shipment. At this stage, the delivery process becomes more complicated. Therefore, properly organized “last mile” logistics is important both for increasingly impatient customers, but also (or perhaps above all) for sellers and suppliers trying to meet these requirements.

 

The easier it gets, the harder it is

 

Never before has it been easier to create your own business based on trade than now, when Internet access is commonplace. Creating an online store is often a matter of a few productive days, and the right choice of products can result in hundreds of packages to be sent to new buyers. However, this is not the only factor that complicates the delivery process. With such a large number of stores, fierce competition is born, the stake of which is to retain the customer for longer. And about that, even small details can decide.

The end customer is usually not aware of the entire logistic process, the entire path of the goods from the moment of their production. The purchase decision itself is made much later, so it is the efficiency of the “last mile” mileage that determines the quality of service provided by a given seller.

 

The clock is ticking

 

Changing the status of an order to “out for delivery” turns the clock in the mind of every buyer. The 21st century kills our patience and makes us used to live in an „instant” mode. We have a hard time waiting, we want everything here and now. No wonder that the waiting time for a package with a freshly ordered smartphone or a new game is endless. How impatient are we? Research shows that as many as 30% of customers are willing to pay extra for the order, only to get their goods few hours earlier.

The result of this rush is the intensive growth of the global “last mile” market. According to the “Global Opportunity Analysis and Industry Forecast, 2021-2026” report, its projected value for 2026 is $66 billion. This is almost a twofold increase compared to 2020 (39 billion dollars). The projected growth rate over the period 2021-2026 is 9%.

So how to invest to achieve high efficiency of this key phase of the delivery process?

 

Strength lies in quantity

 

One solution is to go back to the roots and try to join together individual routes of shipments. Automatic parcel lockers that are becoming more and more popular can be used for this. This solution creates a win-win situation between the addressee of the shipment, the courier company and the seller. Those mentioned first have a very fast, convenient form of delivery, which allows picking up the package at a convenient time. Couriers also do not have to go around the vast neighbourhoods looking for their destination, stop every few dozen meters and leave the heated cabin of the car again and again. It is also a much more advantageous option for the service of the online store itself, which has an easier way of addressing parcels, and the store itself gains customers satisfied with the instant delivery of the desired product.

 

This mile is last, but it is the most important – take care of it

 

It is an unwritten duty of every online store owner to ensure the satisfaction of their customers. There are many ways. You can bet on a unique range, above-average quality of products, or something else that will stand out from many similar places. However, each of these features will be overshadowed by not considered last mile logistics, because in the 21st century even the best product loses its attractiveness if the waiting period for its delivery is too long.

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