Last Mile Delivery: Managing Speed and Control with IoT
All residents in the 130-apartment housing complex I live in are connected through a social app. We have seen a huge spike in online orders and home deliveries since the COVID-19 outbreak. We notify other residents on the app, when a delivery is missed or items delivered to the wrong address. On an average, three to four deliveries go missing every week.
The last mile is critical in providing a superior customer experience through delivery certainty. This allows companies to deliver right, retain customers, and stay loyal to the products sold. Have you ever wondered how companies can satisfy ever-increasing consumer demands with effective last mile delivery?
What is last mile delivery?
Last mile delivery is the final step in a delivery process that ensures that goods reach the end user. It is worth noting that around 53% of the cost of shipment is spent in last mile delivery. While companies bear around 25%, the rest is borne by the end customer. Usually, execution of last mile delivery involves small parcel shippers in a range of 50 to 100 miles. Studies estimate that parcel shipments will continue to grow and could double in the next 10 years.
What concerns do companies have?
Now that you understand what we mean by last mile delivery, lets dig deeper and try to understand some of the many challenge’s companies must overcome to decide the optimal strategy to implement an efficient last mile delivery process. Urban deliveries are always challenging due to traffic, parking regulations, and adverse weather conditions. Product complexity is another problem, especially for high-value or specialty products. Driver shortage and capacity crunch are the other hurdles, especially for North America. The retailers and shippers have their job cut out to be able to provide a superior customer experience and enhance brand loyalty.
How are companies tackling the challenges?
In a desperate effort to control costs and positively impact end customer’s experience, companies are increasingly insourcing last mile logistics. Some of the key aspects of this shift include:
- Providing product specific delivery timelines options ranging from a few days, the same day or even just a few hours to the end customers. Our research shows that many customers are willing to pay up to 20% extra for faster deliveries.
- Organizing pick-up locations where customers can collect their orders at their convenience.
- Adopting smart IoT technologies to track vehicles and packages in real time. Live data is collected, harnessed and analyzed carefully to provide auto-generated communication to relevant stakeholders.
IoT-enabled logistics solution key to last mile delivery
Effective last mile logistics allow shippers to get more products to end users on time. Promising trends emerging in this space include delivery lockers, and delivery by drones. IoT adoption remains key contributor to the success of such initiatives.
- Artificial intelligence and machine learning based route planning and optimization help the logistics officer to take quick decisions.
- Real-time data insights help planners and dispatchers automate and manage the delivery window, fleet and load, while accounting for weather conditions and traffic constraints in real time.
- Accurate ETAs and advanced delay alerts enhance the end customer experience.
- Electronic proof of delivery captures the exact coordinates of order fulfillment and ensures that the shipment has reached the right recipient.
About the Author
Raj evangelizes IoT technologies to enable digital transformation and operational excellence for TCS’ customers. He has extensive experience in manufacturing, supply chain, engineering and industrial services with deep understanding of IoT, industrial internet and digital twins.
Raj with his team has helped many organizations in creating smart products, services, and solutions to harness new business models, bring in operational excellence and additional revenue streams.