Last Mile Logistics refers to the final step in the delivery process from production facility or distribution centre to the end user. This step can account for 28% of the total shipment cost. This usually involves the use of parcel or small package carriers to deliver products to consumers. As e-Commerce continues to grow, shippers of all sizes have identified last mile logistics as the cornerstone to driving growth and profitability. In many cases, this could be the route to competitive advantage. Below are some of the challenges of last mile logistics:
- Urban deliveries can be delayed by traffic congestion
- Can involve multiple delivery points
- Traffic congestion can also increase fuel costs
- Deliveries can be hindered by parking restrictions and regulations
- Frequently, there is no-one present at the destination to receive the delivery so the delivery has to be returned to the depot or repeated the following day
To overcome these challenges, logistics organisations are implementing the following solutions for last mile logistics:
- Using more “urban friendly” modes of transport such as smaller vehicles and bicycles
- Using delivery lockers or collection points allowing end users and consumers to collect goods themselves at convenient locations which reduces delivery points
- Exploring the use of drones and robots to complete deliveries
- Improving transport management and route optimisation to avoid congestion hotspots