THE EVOLVING LANDSCAPE OF FINAL MILE DELIVERY
WHAT IS FINAL MILE DELIVERY?
“The Final Mile is the last delivery in the supply chain. It’s about getting things from the manufacturer into the hands of the customer. For example, from the pharmaceutical manufacturer to the pharmacy to the person who needs his meds.”
– Kirk Godby, Managing Partner of Flexible WorkForce
Past President of the Customized Delivery and Logistics Association
Also known as last mile delivery or last mile logistics, final mile delivery is the last part of the shipping journey. It entails the delivery of a package to the customer’s door and is the most costly part of the shipping process.
WHAT FACTORS CONTRIBUTE TO THE GROWTH OF FINAL MILE DELIVERY?
“B2C e-commerce is expected to generate $3.2 trillion in revenue by 2020 while the B2B e-commerce market is expected to be twice that size. In terms of transport revenue, global B2C e-commerce produced $85 billion in 2015, and is expected to grow by 15% annual compound rate by 2019.”
– John D. Schulz, SupplyChain 24/7
There are two key factors driving the evolution of final mile delivery services: the growth in the global e-commerce industry and consumer desire to manage their own orders. With experts projecting B2C e-commerce to generate $3.2 trillion in revenue by 2020, a growing number of consumers will develop expertise in choosing their shipping carriers and tracking the status of their orders.
HOW HAS THE LANDSCAPE FOR FINAL MILE DELIVERY EVOLVED?
Final mile delivery has evolved in tandem with growth in the e-commerce industry. A growing number of consumers are playing an active role in their product deliveries, which has prompted the evolution of final mile delivery. Deborah Adams Kaplan of Supply Chain Dive outlines the following trends in last mile delivery:
1) HIGHER EXPECTATIONS FOR SPEEDY SERVICE
Quick final mile delivery times are helping businesses gain an edge over competitors who place less emphasis on speedy service. Over 80% of consumers feel that “fast” shipping is delivery that occurs in two days or less, highlighting the need for shipping efficiency.
2) HEIGHTENED DEMAND FOR SHIPMENT VISIBILITY
As consumers become more comfortable managing their own orders, their desire for regular delivery status updates will increase. Order tracking is a top priority for consumers, who now expect to know exactly where their order is located at all times.
3) CARRIERS ARE BECOMING UPSELLERS
In the past, carriers focused exclusively on delivering a purchased product to the consumer. Some of today’s carriers are also helping to bolster sales revenue by keeping their trucks stocked with a variety of related products that shoppers might be interested in purchasing when their order is delivered.
WHAT IS THE ROLE OF TECHNOLOGY IN FINAL MILE DELIVERY?
“Changing customer trends and innovations catalyzed by today’s nascent technology are shaping the next-generation supply chain. Customers will expect immediacy, personalization, and convenience; new technology and advanced analytics will be the enablers.”
– A.T. Kearney, 28th Annual State of Logistics Report
Technology plays a key role in creating a positive customer experience by enhancing the delivery process. Here are a few ways that technology comes into play with final mile delivery:
- Technology allows customers to receive status updates via email, text, or phone
- Mobile technology enables customers to track their orders and see real-time data on their shipments
- Technology is being used to track final mile delivery teams’ adherence to goals and KPIs
- If your business does not select a carrier that remains abreast of technological developments in last mile technology, you run the risk of losing traction to those that take advantage of the latest advancements.
WHY IS FINAL MILE DELIVERY IMPORTANT TO YOUR BUSINESS?
“There is an art and a science to successful Final Mile delivery. Like same-day, Final Mile involves timeliness, speed, accuracy and precision. Fast and efficient Final Mile gives consumers what they want and shippers a way to measure up to increasingly demanding buyer expectations.”
– Andrea Obston, Director of Public Relations
Customized Logistics and Delivery Association
Customer expectations are higher than ever. For instance, over 43% of consumers expect 24/7 support from online businesses and most customers expect premium delivery services or free shipping on their orders. Failure to respond to the evolving demands of consumers can cause customers to abandon your business in favor of one that will meet their demands for accuracy, speed, and precision. By selecting a carrier with a focus on final mile delivery, you can help bring the following to your business:
- Higher levels of customer satisfaction
- More repeat business
- Increased referrals
WHAT DOES THE FUTURE HOLD FOR FINAL MILE DELIVERY?
“Robot delivery is already being tested in San Francisco for Yelp Eat24, using a Marble robot on city sidewalks…McKinsey envisions a future where autonomous vehicles and drones will deliver 78% of all items, with traditional delivery accounting for only 20% and another 2% by bike couriers.”
– Deborah Adams Kaplan, Supply Chain Dive
In fact, some experts estimate that 80% of all items will be delivered by robots or “delivery bots”. This technology is currently being piloted in California and Zion Market Research estimates that the delivery bot industry will grow to $12 billion by 2024.
Current delivery bots are equipped with six wheels to allow them to navigate uneven sidewalks and curbs. They also feature weather-resistant technology and infrared cameras to promote nighttime navigation.
THE BOTTOM LINE
As the last phase of the supply chain process, final mile delivery plays a key role in bolstering customer satisfaction. Recent technological advances with final mile delivery now enable customers to enjoy real-time updates on their shipments and to request their preferred time of delivery. As the e-commerce industry continues to grow, final mile delivery is expected to reach new heights over the next decade.
To learn more about final mile delivery, please contact the logistics specialists with Final Mile Ottawa, a division of Ottawa Logistics. You can reach us by email at firstname.lastname@example.org We look forward to hearing from you!