You may hear a lot about last-mile delivery in eCommerce logistics.
"Last-mile delivery" happens at the end of the journey in supply chain management. It is the phase where the order is delivered from the fulfillment center to the final address of the end consumer.
However, "last-yard delivery" has become an important focus for eCommerce retailers, especially due to higher customer expectations in delivery.
What is last-yard delivery?
Last-yard delivery is the final part of the last-mile delivery, when the delivery person physically goes to final address and hands the package over to the recipient.
However, this part of the last mile delivery can have its own set of challenges.
In this post, we'll go over the challenges of last-mile and last-yard delivery, and the trends we can expect to see as retailers find ways to overcome these issues.
The challenges of last mile delivery
Consumers want seamless deliveries to their doorstep without having to get involved at any time during the delivery process.
The last-mile delivery experience can actually make or break a customer's trust in a retailer. If a customer feels their expectations weren't met with a retailer's particular delivery service, it is possible that they won't purchase from that retailer again.
Still, last-mile delivery remains a challenge for many shippers, as many transportation networks are just inefficient.
How so? Long distances between deliveries (especially in rural areas), bad infrastructure that doesn't allow for efficient routes, traffic, and drivers having to make multiple stops along the way mean a lot fuel and costs are incurred - just to deliver one package.
And even with tracking available, sometimes this technology still doesn't provide the visibility the customer wants.
Imagine seeing the status "out for delivery" for the past few hours. Customers are naturally curious and want to know the exact location of where the driver is so they can anticipate arrival. Many logistics companies still haven't figured out how to best share this information, and of course it will take more money to develop solutions.
Last-yard challenges arise when the delivery person arrives at the location. What if the property is gated and the delivery person can't reach the doorstep of the unit they need to deliver to? Or, they have to leave the package with a doorman or mailroom, whose internal logistics are not the most organized, causing further delays in delivery?
Trends in last-mile and last-yard delivery
Companies are now focusing on the development of a transportation network for the final mile of the delivery process. There are also many innovative steps being taken by shippers to provide premium delivery services to their customers.
- Many big companies are looking for real estate in major cities so they can open and operate warehouses that are closer to their customers. Having fulfillment warehouses in major markets cuts down the distances needed for shipments to travel, and also allows for more delivery options such as same-day or on-demand delivery.
- Many courier services are also looking into partnering with the US Postal Service for last mile delivery. USPS is required by law to deliver to all postal addresses within the US regardless of location. This means courier services can rely on USPS to deliver to rural or difficult-to-reach locations if their company doesn't have the resources to do so.
- Package lockers in apartment buildings or other publicly accessible locations are one idea that's been introduced and tested by Amazon and UPS. These lockers are potentially the best of both worlds, as they allow delivery workers to deliver multiple packages all at once while ensuring that customers can conveniently come by at any time for pickup.
- Drones and robots are being tested in some urban areas of the United States to effectively manage home delivery. According to McKinsey, robots are specifically being created to tackle last-yard delivery by being able to take packages directly to a customer's front door.
While this is currently in development and the costs of this technology remain high, it does have the potential to solve our current last-yard delivery woes.
- As mentioned before, more delivery services are trying to be more transparent in their tracking. Developing technology that will allow package tracking systems to provide real-time information of where packages are will help meet customer expectations.
In 2018, last-mile delivery is inefficient and expensive.
In the next decade, solutions that can be automated and unmanned (read: more robots!) will be ideally available so that delivery can be more convenient.
But while those technologies continue to be developed, ensuring that delivery information is accurate, having better communication between delivery companies / their drivers / customers, optimizing delivery drivers' routes, and ensuring that packages are given to the right driver on the right route at the right time can help cut down on the current inefficiencies we are seeing in last-mile and last-yard logistics.