What is a last-mile delivery in the logistics business
In a product's journey from warehouse shelf to customer doorstep, the "last mile" of delivery is the final step of the process — the point at which the package finally arrives at the buyer's door. In addition to being a key to customer satisfaction, Last-mile delivery is both the most expensive and time-consuming part of the logistics shipping process.
What is the last mile problem?
If you've ever tracked a package online and saw that it was "out for delivery" for what felt like forever, you already understand that the last mile problem is inefficiency. That's because the final leg of shipment typically involves multiple stops with low drop sizes.
In rural areas, delivery points along a particular route could be several miles apart, with only one or two packages getting dropped off at each one. In cities, the outlook isn't much better; what urban areas make up for in stop proximity is quickly negated by the near-constant delays of traffic congestion.
The costs and inefficiencies of the last mile problem have only been further compounded by the continuous rise of e-commerce in retail sales, which has dramatically increased the number of parcels delivered each day, as well as raised customer expectations to include not just fast, but also free, delivery.
Technology solutions to improve last-mile logistics
With the rise of the gig economy, many consumers are already familiar with the concept of crowdsourcing local services through digital platforms like Uber, Airbnb, and Postmates. Location-based crowdsourcing allows consumers to open a mobile app to hail a ride, book a place to stay, order coffee to the office, hire a handyman to mount a TV, send flowers to that special someone, or even schedule takeout to arrive just as they're walking through their apartment door.
With crowdsourcing technology, retailers, logistics partners, and consumers can connect directly with local, non-professional couriers who use their own transportation to make deliveries. Companies can get their online orders to customers faster, and customers can get their items when and where they want them. The freedom to make on-demand and scheduled deliveries also ensure that customers are home at the time of delivery — eliminating the need for a second (or third) attempt. The crowdsourcing model has been prevalent in transportation, hospitality, and food delivery for some time now, and retailers are eyeing its low startup costs, asset-light operations, and improved customer experience to ease their last-mile delivery woes.
And with the ongoing integration and enhancement of automation across logistics industries, it's likely we'll start seeing delivery robots, drones, and self-driving vehicles making many of these drop-offs in the not-so-far future.
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