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Retail Business Review | Thursday, June 01, 2023
Last-mile delivery is one of the most critical parts of the supply chain as it acts as an interface between the consumers and the supply chain management. However, the importance and goal of achieving consumer satisfaction have raised numerous challenges in the last-mile delivery industry.
Fremont, CA: The last-mile delivery industry is facing challenges in keeping up to speed with shifting consumer behavior, transportation, delivery inefficiencies, and environmental disruptions, making the smooth operation of the industry a difficult task.
Challenges of Last-mile Delivery
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Higher Delivery Costs: The delivery cost is high because many expenses add up in the last-mile industry, like fuel, inventory, and maintenance. Additionally, failed deliveries, returns and replacements are some of the major contributing factors to the increasing cost of the last-mile industry.
Rising Consumer Expectations: The ultimate goal of the last-mile delivery is consumer satisfaction. However, keeping up with consumer expectations is one of the critical challenges that the industry is facing today. Consumers today want shorter delivery frames with minimal shipping charges and fast-responding customer support. Achieving these services while maintaining profit margins is a major challenge which is putting immense pressure on the last-mile industry.
Lack of Real-time Visibility: Consumers want to know every detail about their packages. Therefore, end-to-end visibility is essential for last-mile delivery to maintain customer satisfaction. Enabling visibility to consumers has been made possible through real-time tracking, which gives transparency on the movement of packages. But many companies are still not prioritising end-to-end transparency with their consumers.
Poor Route Planning: Route planning is challenging because of the uncertain contingencies that can occur during last-mile delivery. Factors like weather, political or social events that lead to road blockages, road repairs, and unexpected congestion can hamper the route optimisation process. Even with technology that can forecast weather and congestion at a given hour of the day, it is impossible to predict and plan delivery routes accurately.
Obsolete Technology: About half of the global last-mile delivery companies use outdated technology to carry out their process. Not using the right modern technology can cause problems with delivery management, delays, and operations. Manual methods are not feasible in today’s day and age, especially with the availability of equivalent modern-day technology to replace them. Using obsolete technology is highly costly and hampers the growth of the last-mile industry, resulting in high customer turnover.
Failed Deliveries: Delays and failed deliveries are inevitable in this industry. Tackling delivery delays has been difficult for last-mile services for many years, and with the demand for faster deliveries increasing, it is only becoming more challenging.
Unpredictable Accidents: A controlled environment can be maintained within a facility. However, anything can go wrong during transit. The safety of the goods during the transportation is a priority because damaged goods are an additional cost for the company. But companies can’t predict conditions like traffic, accidents, and bad weather, which makes it hard for courier and delivery services to run smoothly.
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