What is last-mile logistics? What challenges does it represent? How can you turn it into a key asset for your e-merchant business? In this article, we tell you all about last-mile delivery and the solutions you can implement to make it a real advantage for your online business.
- What are last-mile logistics?
- Why last-mile logistics is a challenge for e-tailers
- How to optimize last-mile logistics?
- Carrier selection for last-mile delivery
Last-mile logistics is an essential part of your e-commerce supply chain. This is the final stage in the delivery process, from the warehouse to the customer’s door.
But why is it so important, and how can it be optimized? And as an e-tailer, how can you turn this logistical challenge into a competitive advantage? We tell you all about last-mile logistics.
What are last-mile logistics?
Last-mile logistics, a term now commonplace in parcel delivery, refers to thefinal stage of the delivery process, when your product moves from the depot or distribution center to the final destination: your customer’s home. This last segment of a product’s journey may seem insignificant compared to the distance it may have traveled since manufacture. Yet this small portion of the route is of major importance.
To understand this, it’s useful to visualize theentire supply chain process. From the production of your item, through its transportation through various checkpoints, to its final arrival at your customer’s premises, each stage requires a certain amount of coordination and resources. However, last-mile logistics is often described as the most sensitive to manage.
It’s no coincidence that this is considered the most delicate stage in the parcel delivery process. Unlike other segments of your supply chain, where items are moved in large volumes, last-mile logistics involves individual deliveries to specific, often scattered, addresses. What’s more, the challenges of city delivery, such as traffic congestion, access restrictions, and customers’ growing expectations of speed and flexibility, make this stage even more complex.
As e-commerce continues to grow, last-mile logistics are becoming an essential part of your customer experience and the success of your online sales business. It is therefore essential to optimize this phase to improve efficiency, reduce costs and increase customer satisfaction.
Why last-mile logistics is a challenge for e-tailers
Last-mile delivery is much more than just a stage in the supply chain: it has become a major challenge for e-tailers. Indeed, the final moments of a product’s journey from the warehouse to the customer’s home have a considerable impact on many aspects of your business.
Logistics costs
The first difficulty lies in the costs associated with this stage. A Capgemini study has shown that the cost of last-mile delivery can account for up to 41% of the total cost of supply chain flows, even though the distance is generally short in relation to the overall journey. This is partly due to the fact that deliveries are generally not pooled at this stage, which drives up the unit cost of transport. In other words, the last mile is often the most expensive.
Customer satisfaction
Secondly, the last mile has a significant impact on your customers’ satisfaction. Quality and speed of delivery have become decisive factors in the customer experience, especially with the rise of e-commerce. According to Urby, Internet purchases account for 80% of all parcels delivered in France, and this volume is growing by 20% every year.
Consumers have high expectations when it comes to delivery, and any problems encountered at this stage can damage their loyalty to your brand. Some studies even reveal that more than 80% of consumers do not reorder from a company with which they have had delivery problems.
Ecological impact
Finally, last-mile delivery also has a significant environmental impact. It is estimated that this stage is responsible for 25% of greenhouse gas emissions in French cities. Every day, over a million deliveries are made to 70,000 establishments in the Paris region alone. As a company, you therefore have a responsibility to seek to reduce this impact as much as possible.
For all these reasons, managing last-mile logistics represents a major challenge for e-tailers. It’s essential to adopt a strategic approach to optimizing this stage, looking for solutions that reduce costs, improve customer satisfaction and minimize environmental impact.
How to optimize last-mile logistics?
Understanding the importance of last-mile logistics is the first step to improving the efficiency of your deliveries. As an e-tailer, you can play a decisive role by making strategic choices that optimize this critical phase of your supply chain. This can mean lower costs, a reduced environmental impact and a significant improvement in customer satisfaction.
Why this topic is important for e-tailers
It’s crucial to understand that optimizing last-mile logistics doesn’t just rest on the shoulders of carriers. As e-tailers, your strategic decisions can significantly influence the effectiveness of this final phase. For example, the choice of your warehouses, the management of your stock, and even the choice of your logistics partner can have a significant impact on last-mile delivery performance.
Multi-warehouse: a solution worth considering
Une des stratégies que vous pouvez adopter pour améliorer votre logistique du dernier kilomètre est le système multi-entrepôt. En répartissant votre stock dans plusieurs entrepôts stratégiquement situés près de vos principaux marchés, vous pouvez raccourcir la distance de la livraison finale.
This can not only reduce transport costs, but also speed up delivery, improving your customers’ experience. And that’s why Shippingbo offers you its OMS Supervision to efficiently manage this multi-warehouse configuration.
L’OMS Supervision vous donne accès à une vision 360 de vos stocks peu importe le nombre d’entrepôts dont vous disposez, donc plus besoin de vous limiter à un ou deux entrepôts, pour optimiser votre logistique du dernier kilomètre vous pouvez les multiplier. Mais son efficacité ne s’arrête pas là, en choisissant cet outil vous aurez la possibilité d’aiguiller vos commandes vers l’entrepôt adéquat.
Let’s take an example: you have warehouses in the following 4 cities: Paris, Lyon, Marseille and Toulouse, and one of your customers domiciled in the Toulouse region places an order on your site. By establishing a rule in OMS Supervision which stipulates that all orders must be routed according to the proximity of the warehouse to the customer’s address, the order is then directed to the warehouse in question. In this way, you can reduce order dispatch times thanks to automation, but also delivery times thanks to this proximity, which helps you save money and reduce your ecological impact.
So by opting for multi-warehouse management, you optimize your last-mile logistics, both for your company’s profits and your customers’ satisfaction.
Omni-logistics: hybrid logistics for optimization
To go even further with OMS Supervision, you can consider outsourcing part of your logistics to several external players, without making your logistics any more complex. This diversification of storage locations is also known asomni-logistics.
This approach gives you greater flexibility and efficiency, allowing you to adapt your logistics to fluctuations in demand and regional variations, without having to invest in new premises, staff, … Here again, OMS Supervision Shippingbo is an invaluable asset, giving you an overview of your supply chain and facilitating coordination between your various storage locations, whether internal or external to your company.
In conclusion, as an e-tailer, you hold many cards for optimizing last-mile delivery. Whether through multi-warehousing or omni-logistics, there are many ways to improve your logistics and overcome the challenges of city delivery. The key is to adopt a proactive and strategic approach, always keeping in mind the ultimate goal: your customers’ satisfaction.
Carrier selection for last-mile delivery
When it comes to last-mile delivery, the carrier plays a vital role. Choosing a partner who understands your specific needs and is able to propose appropriate solutions can make all the difference.
Tailor-made services
Carriers specializing in city delivery can offer tailor-made services, such as overnight delivery, delivery to relay points, or delivery by eco-friendly vehicles. These options can not only help reduce costs and delivery times, but also contribute to a better customer experience.
Quick adaptability
What’s more,adaptability is an essential criterion when choosing a carrier. As the e-commerce market is constantly evolving, it’s important that your carrier is able to adapt quickly to changes, whether in terms of order volume, delivery zones, or environmental regulations.
A complete, high-performance ecosystem
Shippingbo also gives you access to its e-commerce ecosystem of over 40 carriers and freight forwarders, some of whom offer more practical and eco-responsible solutions for your last-mile delivery.
For example, GLS makes some of its deliveries by bicycle, DHL opts for electric vehicles in the city, and UPS has chosen to use eQuads, an electric vehicle similar to a golfette, for some of its city deliveries.
In conclusion, optimizing last-mile logistics also involves your choice of choice of carriers. They must be able to understand your needs, but can also offer you alternatives to traditional van transport, to increase your customer satisfaction.
Conclusion
Optimizing last-mile logistics is a real challenge for e-tailers, but it’s also an opportunity to stand out from the crowd. By optimizing this phase of delivery, not only can you save money, but you can also improve the customer experience and minimize your company’s environmental impact.
Whether you opt for multi-warehouse management, outsource part of your logistics, or choose the right carrier, Shippingbo can help you make the right choices for optimized logistics.
Now that you know all about last-mile logistics, are you ready to optimize your logistics?
