Last mile delivery for seamless connectivity

Did you know that the last mile delivery industry comprises 53% of the overall shipping costs and is valued at 151.87 billion in 2022? Companies usually absorb around 25% of the cost themselves, but this percentage is on the rise due to the growing expenses associated with supply chain inefficiencies.

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In 2022, around 159 billion parcels were delivered, and it is predicted to reach 256 billion parcels by 2027. With this growth, the entire market will face new challenges, contributing to the rise in ongoing inflation.

Difficulties associated with last mile delivery

This complex chain comes with numerous challenges. But one of the major challenges that remain is lack of visibility. Navigating through congested urban environments, unpredictable traffic patterns, and non-standardised addresses poses logistical hurdles that can impede timely and efficient delivery.

Additionally, the ever-increasing customer expectations for quick and flexible delivery options further intensify the challenges. Also, the rise of e-commerce introduced a need for third-party logistics firms (3PLs), which have filled delivery gaps, but have made fulfilment more complex for shippers. Unpredictable fuel prices and increased labour costs add to the pile.

Ultimately, balancing cost-effectiveness with exceptional customer service, managing the complexities of reverse logistics, and optimising routes to ensure minimal travel time are all obstacles that businesses face in the quest for successful last mile delivery.

Fastest-Growing Segment in the last-mile delivery market

Based on the multiple modes and attributes, the last-mile delivery market is segmented by delivery mode, application, destination, service type, vehicle type, and mode of operations. All of these segments contribute significantly to the market, but the core segment remains the service type that includes Business-to-Business, Business-to-Customer, and Customer-to-Customer.

According to the survey, it is stated that in the coming years, B2C will expand significantly compared to the B2B segment. B2C-type last-mile delivery focuses on delivering shipments and items from nearby transportation hubs to final customers. The B2C segment has shown a gradual increase due to the digitalization and emergence of multiple technologies.

Key regions for the last mile delivery market

Asia-Pacific countries (APAC) are projected to contribute around 40% of growth by 2027 in the last-mile delivery industry. China being the major contributor in APAC, with around 28% over the last five years, other countries are working rigorously to enhance and improve their last mile logistics by adopting various technologies. Moreover, with the presence of global players and the population at its centre, APAC has been witnessing rapid growth in the number of small and medium-sized regional e-commerce players. Therefore, the growing e-commerce sector will boost demand for last-mile delivery services in this region.

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7 last mile logistics smart solutions for effortless connectivity

1. Route Optimisation: Optimising delivery routes using advanced software solutions allows businesses to reduce travel time, fuel consumption, and transportation costs. By leveraging route optimisation tools tailored for location and city, companies can navigate congested areas, avoid roadblocks, and ensure efficient last mile logistics.

2. Real-Time Tracking and Communication: Integrating GPS tracking, real-time updates, and mobile applications improves visibility and communication during the transportation of goods. This allows for better monitoring, coordination, and timely updates for both customers and delivery personnel.

3. Strategic Partnerships: Forming partnerships with local delivery services in your location or city expands your delivery reach and leverages existing expertise and infrastructure. By tapping into their local knowledge and established networks, businesses can optimise routes, reduce delivery times, and deliver products more efficiently.

4. Address Verification: Implementing address verification tools helps ensure accurate and standardised addresses for successful deliveries. This reduces the chances of failed deliveries, enhances first-time delivery rates, and improves overall efficiency.

5. Flexible Delivery Options: Offering flexible delivery options tailored to the preferences of customers in a location or city can significantly improve last mile delivery success rates. Providing specific time slots, alternative pickup locations, or even self-service lockers caters to the varying needs of customers, driving customer satisfaction and boosting business reputation.

6. Optimise Operations with Analytics: Leverage data analytics and machine learning algorithms to analyse historical delivery data, identify demand patterns, and optimise inventory placement. By making data-driven decisions, businesses in [location or city] can streamline operations, minimise stockouts, and improve last mile delivery efficiency.

7. Reverse Logistics Optimisation: Streamline the process of returns and reverse logistics by implementing efficient procedures for product pickups, inspections, and exchanges. This minimises delays, reduces costs, and improves overall customer satisfaction.

By adopting these points, businesses can overcome the challenges associated with last mile delivery and ensure efficient, timely, and satisfactory experiences for their customers.

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Sources: Insider Intelligence
Technavio
InsightAce Analytics
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