How Do E-Commerce Companies Achieve Last-Mile Deliveries?
Last mile delivery, the final leg of a supply chain, is when a product reaches the customer’s residence or point of contact by e-commerce companies. E- commerce companies carry out the crucial task of last mile deliveries, which is often a complicated process. These deliveries involve several complexities, hence the logistical companies play a pivotal role in fulfilling the transportation of these shipments. The last mile deliveries depend on the efficiency of the e- commerce company, making them a deal maker or breaker.
To ensure that their customers are paying no or negligible amount for the shipping of their orders, the e-commerce firms pay for about 25% of the costs incurred during delivery. Furthermore, those deliveries that fail or are delayed lead to increased costs for the company to bear, approximately accounting for 26% of their profits and diminishing their net gains.
Efficient e-commerce companies want you to receive your products as soon as possible so as to encourage you to invest in new ones, especially since the market has been a housebound one after the rise of the deadly COVID-19. The significance of the last mile delivery segment is seen to be steadily growing in India and it is predicted that this ecosystem will furtherexpand and the reliance of e-commerce companies on outsourced companies and logistical softwares will concentrate as well.
Although a fairly convenient option to choose, companies need to consider several factors before outsourcing their last mile deliveries
Outsourcing this crucial supply stage translated to a heavy risk undertaking since the outsourced delegation lead to cost and risk incurring. If product safety and punctuality is not maintained by the outsourced company, the reliability of e-commerce firms is at stake. Here are certain problems faced by e-commerce companies in finishing their last mile consignments.
- Customers that can track the delivery of their products find it easier to trust the e-commerce companies, which makes visibility a very important factor to build consumer relationships
- Package tracking also helps the customer to anticipate the arrival of their delivery aptly, eradicating all anxiety regarding the security of the product Transparency that the business owners have with their respective supply chains adds clarity to their decision making processes, making the supply run smoother.
- Efficient deliveries often cost a lot, which acts as a huge hindrance for logistics and e-commerce firms
- The last mile usually accounts for 28% for all of the supply chain costs, which acts as a primary reason for lack of infrastructure built to ensure seamless processes
- Skews in the last mile delivery further the costs the e-commerce company has to bear, in the form of inventory delays, repairing costs and increased fuel costs
All of this while compromising the operations of the company as well.
The uncertainty of the last mile delivery is the only factor of the supply chain that remains true under all circumstances. To accommodate for such unforeseen urgency, such as breakdowns, traffic, bad weather, roadblocks or even cargo theft, the e-commerce companies must always have a backup plan. For such factors that are beyond human control, it is always wiser to have complete visibility of the problem as well. Maximum deliveries are late due to lousy route planning. To pull through this hindrance and save fuel costs while doing so, the logistics companies make use of softwares that predict and suggest the optimum route for carrying the cargo through the last mile.
E-commerce operators often employ multiple logistics softwares to ensure that their supply process is not convoluted. In doing so, the carbon footprint left behind by the last mile is marginally reduced. The pollution constraints that are soon to be imposed by the government in lieu of the IPCC reports, can also be complied with when the trucking routes are optimised.
The last mile delivery process is being enhanced with technologies like Location Intelligence (LI). This technology provides features such as real-time tracking, enhanced visibility, route optimization, and fleet management. As a result of LI technology, users are notified about shipment movements. Utilising this technology, retailers can optimise delivery routes based on weather and route conditions. E-commerce companies can make use of this technology to overcome the challenges of last mile delivery.
Introduction of the latest technology in the form of location intelligence is proving to be a real game changer for numerous logistics organisations
One forgets how the last mile delivery is only possible due to first and middle miles, where the inventory has to travel from the manufacturer to the warehouse in the former and from the warehouse to the distribution hub in the latter. The orchestration that goes behind the curtains of your parcel safely reaching your possession is only possible if and when the last mile is supported by the smooth running supply chain. Insourcing the end-to-end process of your supply chain is often what companies prefer, which makes it essential to gain the visibility of your supply chain.
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