An effective final mile logistics strategy must consider all variables, defining what is necessary to provide a superior customer experience. Unfortunately, not all final mile carriers are equal, and services may vary widely between geographic regions. However, this is not enough to abandon the management of final mile logistics, especially as Amazon rolls out newer, faster delivery windows. As a result, shippers need to understand why the problem of transparency continues to affect final mile logistics, what benefits can be realized through effective management, and a few best practices to maintain it.
Lacking Transparency Still Plagues Final Mile Logistics
Transparency is a significant problem in final mile logistics. Everyone has experienced the annoyance of receiving the notification, “out for delivery.” It provides little insight into when a package will be delivered, and not everyone has the luxury of waiting all day to see if it arrives. At the same time, the incidence of theft and fraud continues to increase, and customers expect more transparency within the final mile. In addition to reduced transparency, final mile remains the most expensive and invasive aspects of shipping. In rural areas, deliveries may be miles apart, eating away at valuable delivery time, explains Trucking Info. Yet, more frequent, proximate delivery locations in urban areas open the door to delays and risks.
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Effective Final Mile Logistics Offer Big Benefits
An effective final mile logistics strategy identifies the threats and opportunities to timely delivery, and when taken in that context, it is all about risk management. Failure to provide the exact experience set forth by the most prominent players in the industry, such as Amazon and Walmart, will result in customers leaving your brand. However, effective final mile logistics lowers this risk and offers these key benefits.
- Higher profitability. Providing more than standard delivery is an excellent way to open the door to new revenue streams, including the addition of white-glove services.
- Increased customer service. Providing more information and automating exceptions within the final mile will naturally lend itself to improved customer service levels.
- Reduced demand for LTL and FT modes. Carriers, 3PLs, and other logistics companies have devoted countless resources to figuring out how to navigate the trucker shortage and capacity crunch, but a simple review and revision to final mile logistics management could be the solution. For instance, improved final mile services, especially on transactions involving a single touchpoint from store to customers houses, which is the definition of the final mile, will lessen the burden on traditional over the road modes, including LTL and FT.
- Improved accountability. The infusion of technology within the final mile to better manage operations will also lead to enhanced accountability, reducing the incidence of fraud and theft, while improving customer service.
- Faster speed to market, reducing carrying costs. When more products are shipped faster, it effectively lowers carrying costs for warehouses, and as more brick-and-mortar stores are used as a distribution center or fulfillment center, carrying costs will continue to diminish.
- Lower labor costs. Better management of final mile logistics will also lower labor costs in both forms of reducing demand on traditional modes and the effective outsourcing of the final mile to participants of the gig economy. The same benefit will result in lower product price points, building brand value along the way.
- End-to-end visibility across your network. Improvements within the final mile will lend themselves to increased visibility, allowing for better risk management.
How to Maintain Effective Final Mile Processes
To maintain control over final mile processes and ensure all experiences are stellar, shippers should follow these best practices:
- Use the right technology to track progress.
- Connect everything.
- Outsource final mile to dedicated service providers.
- Think beyond “just leave on the porch” (JLOP) delivery options.
- Move fulfillment closer to customers.
- Use a final mile inclusive transportation management system (TMS) to streamline all logistics’ management.
Reap the Benefits of Technology Designed to Meet Final Mile Needs
Final mile represents both the biggest opportunity for improved brand value and grave risk for poor customer experiences. However, those that invest in technology designed to meet the needs of the final mile from the onset of shipment tendering, such as a dedicated TMS, will reap significant benefits.