Amazon has nearly 80 fulfillment centers located throughout the U.S. That is partly how they are solving the last-mile issue. But for the typical freight agent, it’s not only cost prohibitive, it is often financially unfeasible to build one fulfillment center —let alone more than six dozen. With faster on-time delivery demand coming from consumers and trickling down to freight agents, how do you minimize those last-mile logistics challenges?
Customers Expect On-Time Delivery No Matter What
The good news is that the demand for freight agents is only going to increase as consumer expectations for fast, on-time delivery continue to soar. The bad news is that this trend toward on-demand shipping is only heightening last-mile logistics issues for freight agents. Here are the types of expectations your shippers are up against:
- Nearly 70% of consumers expect higher on-time delivery rates during peak seasons like the holidays.
- Over 60% would likely not return to a business that delivered two days after the expected delivery date.
- If deliveries are incorrect or delivered late more than twice, nearly 60% and 55% of consumers respectively will drop a business.
- More than 40% of consumers expect delivery within four days and no more than six days.
While the survey conducted by Voxware showed that 60% of consumers will forgive two delivery errors, a great many others will drop a business after just one mess up. That puts even more pressure on you as the freight agent called in to assist shippers with meeting that demand.
Solving Last-Mile Challenges for Freight Agents
It is the home stretch and your load has just a few short miles left to go before the shipment is fulfilled. Yet it is in this final leg that most freight agents encounter logistical challenges that make meeting increasing consumer demands even harder.
Here are 10 ways to minimize last-mile issues:
#1: Smart Planning for Distribution Centers and Warehouse Facilities
Many freight agents will be called in to fill in the last-mile as part of an overall supply chain. It accounts for close to 30% of your overall shipping costs. You won’t always be managing freight from end-to-end. In those instances, you will need to have a smart plan for enabling your carriers to drop off and pick up at different locations throughout your region.
Third party logistics providers are filling in the gap and competing for last-mile shipments by co-locating their distribution facilities and warehouses throughout the U.S. By partnering with other logistics firms providing warehouse and fulfillment processing centers, you can slash overhead costs while increasing your capability to meet the last-mile challenge for your customers.
#2: Real-Time TMS Management with Carriers
One area where the last-mile issue comes up is in both metropolitan and remote areas. Weather, traffic, and accidents can create bottlenecks in the overall supply chain resulting in late deliveries. If you fail to meet expectations, the shippers that have invested in your ability to meet delivery requirements will suffer the repercussions in lost business, and you will risk losing valuable business accounts.
In order to offer the kind of last-mile logistics performance that attracts the big shipper accounts, many companies use transportation management system (TMS) technology that can be utilized by their carriers —offering real-time reporting. For instance, GlobalTranz’ CarrierRate gives you and your carriers real-time alerts about detours, accidents, weather, and more, including a “live chat” feature and dashboard reporting.
#3: Supply Chain Coordination with Carriers and DCs
Using a technology-driven platform for internal purposes won’t work unless it can be coordinated or integrated effectively with carriers and distribution centers. The transportation platform you choose should allow you to better coordinate your supply chain using interactive mapping and customizable interfaces.
#4: Utilize Local Facilities to Complete Last-Mile
Delivering over the last-mile requires some crafty route planning that utilizes local facilities and delivery hours to your advantage. For instance, some locations, particularly where distribution centers are located near residential areas, have restrictions for when freight can and cannot be delivered. Remember to take into account local limitations as well as opportunities for getting a jump on next-day and same-day delivery by planning for night time deliveries.
#5: Optimize Route Planning for Contingencies
All along the shipment route, your freight could run into problems delivering on time. However, no part of the trip accounts for more delays than the last-mile. In order to optimize your routes to plan for contingencies, you should factor in the typical traffic in the areas where your carriers will be delivering.
Are there alternate routes that have fewer traffic lights and higher speed limits? Will your final destination be in a high traffic area? Always plan for contingencies by optimizing several different routes for on-time delivery.
#6: Look to New Technologies
Meeting the last-mile challenge will soon take to the sky with the use of drone technology for front door deliveries. However, until that time, many freight agents are avoiding congestion by evaluating self-driving vehicles for delivery and incorporating machine-to-machine (M2M) technology into their supply chain processes. These new technologies in turn will give smaller freight agents more leverage in a competitive logistics industry.
#7: Customize Delivery Options to Meet Demand
Just as individual consumers want more delivery options, freight shippers also want choices. By customizing your delivery options to meet their customer demands, you are able to reel in more business, even with a small regional freight business. Many companies are taking advantage of third-party logistics providers (3PLs) to fill in those gaps in their supply chains over the last-mile.
#8: Use Data Analysis to Predict Consumer Behavior
How do big companies like Amazon wager that they can come out ahead by offering so many free shipping options? They use data analytics based on user behavior to come up with times that work best for their customers.
By doing so, they increase the chances that a customer will choose their business over another. Advanced customer retention software can help you zero in on the types of user behaviors that can be understood in order to cater your services to your customers.
#9: Manage Consumer Expectations
Sometimes it just isn’t possible to meet consumer expectations. For fastest delivery, you may have to charge higher rates; but for lower rates, you likely have to offer slower service. Today’s consumer doesn’t want to make an either-or choice. They want it both fast and cheap and so do big shippers.
Because an online retailer has an influx of sales, the need for fast deliveries to meet demand could require the aid of multiple third-party providers. Yet in order to compete, you will either need the type of robust networks that can guarantee on-time delivery, or you will have to better manage customer expectations.
#10: Skillfully Coordinate Fragmented Freight Services
Finally, the freight services market has become completely fragmented. No longer is it one company shipping out their products using their own trucks locally and cross country. Instead, even some of the biggest retailers are only using their vans and trucks for the very last leg while the heavy lifting to get the goods in the vicinity is carried out by 3PLs.
You have an opportunity here to skillfully coordinate the fragmented freight services market to give your customers a seamless experience when they interact with you. Good freight logistics requires both the technology to accomplish your goals and the know-how to utilize those benefits to your advantage.
3PLs Offer Best Solutions to Last-Mile Logistics Issues
GlobalTranz’ freight brokerage technology platform, CommandCenter, is the ultimate solution for freight agents trying to solve the last-mile logistics issues plaguing on-time delivery stats. The more reliable your solutions and the more innovative your logistics technology, the faster your business will grow.
Now that 3PLs are in such high demand, you can no longer wait to catch up. You need the best TMS and CRM platforms on the market in order to ensure the success of your freight management business. Take your freight business to the next level – contact GlobalTranz now for more information.