Last Mile Problems and Solutions
Within only a few months after the start of social distancing, e-commerce surpassed its market growth projections that were expected over the next few years. Online shopping became a necessity in order to comply with new safety and distancing rules.
The increased demand for e-commerce was so high that by April 2020, the growth investment put forth by many logistics companies to keep up was overwhelmed by consumers showing no intention of slowing down. Many operations collapsed under the newfound pressure, delaying supply chains and frustrating customers who tried to follow-up on orders lacking status reports.
The former Director of Logistics and e-Commerce at Walmart Mexico and Central America, Juan Antonio Andrade, as a member of the Mexican Association for Online Sales, commented on customer satisfaction saying that 54% of all online sales are reported by consumers to have some problem, two-thirds of which are related with logistics activity.
What are the problems that more commonly affect e-commerce logistics, and how can we solve them? We’ll explore last mile deliveries, for in them lie the majority of these challenges and, at the same time, they need to be at the center of any solution aiming to better the consumer experience as related to the supply chain.
Solutions for Logistics
What are last mile deliveries? They define the very end of the supply chain, the last leg of a journey that culminates in the consumer receiving their package. Due to their usual urban setting, last mile deliveries are affected by more outside factors than other parts of the journey, including traffic jams, natural phenomena, vehicle breakdowns, etc. However, all of the common risks associated with package delivery come as no surprise, since they’ve always been present in operations.
The pandemic and the reopening of the economy, on the other hand, brought forth both beneficial and detrimental circumstances to logistics and urban transport in many ways. For example, at the start of the implementation of social distancing rules, the reduction in urban traffic meant that deliveries could handle larger volumes of packages generated by the rise in e-commerce, even upgrading their efficiency. On the other hand, the economy reopening caused a sudden increase in vehicle quantities on the street that made deliveries more challenging and did not reduce e-commerce demand. With this context in mind, we can list the more concerning logistics problems in last-mile deliveries in today’s world and how they can be approached in order to avoid supply chain setbacks.
- Lack of safe parking: the demand for loading docks can increase as much as 70% in reopened urban areas. The designation of more docks will make anticipated booking possible and create a better distribution of parking spaces during rush hours.
- Alternatives to delivery: although users prefer in-person delivery straight to their front door, it generates higher costs for companies due to delivery times and the common situation where delivery people have to visit the same address more than once until the user can receive their package, which can result in the expenses being passed down to the consumer.This is why offering the option of picking a package at a nearby office can not only reduce delivery costs but also lower online purchasing prices.
- Alternative transportation and warehousing: Combining on foot or non-motorized vehicle deliveries with urban communal warehouses could drive us closer to a green logistics industry and push logistics providers towards higher efficacy, thanks in part to a degree of government regulation in warehousing.
- Real-time management: Commonly, logistics operations manage their vehicles manually using spreadsheets. This system allows for a more close control but lacks the speed that situations, such as last-minute address changes in last mile deliveries, demand of managers. Because of this, real-time management systems are necessary for keeping a close eye on the big minute-by-minute picture, automatically adjusting to sustain efficiency.
- Efficient follow-up: the availability of smartphones has allowed logistics monitoring to become widespread, rendering expensive GPS systems installed in each vehicle nearly obsolete. However, using software that both tracks and can produce quality control reports, just like the ones generated in factories, allows for pertinent changes in the supply chain to ensure quality. It is vital that consumers also have all package tracking utilities available to them. There’s no point in providing tracking services if users can’t access them.
For last mile solutions to be truly effective, a logistics operation requires both world class planning and a large scale vehicle fleet that can surpass expectations. Woodward combines these elements with over 8 decades of experience, which prepared us for the reopening of the economy that accelerated e-commerce growth unpredictably, surpassing all initial estimates. Although said supercharged e-commerce will likely normalize eventually, it won’t be reduced considerably and much less disappear. This demand came to stay, and if economies choose to work with it , all commerce and logistics related activities will find themselves reaping large scale benefits that can fill present economic voids.