How last mile optimization can boost logistics business

The spread of e-commerce and rise in consumers’ expectation for faster deliveries has put pressure over logistics businesses to remove hurdles and inefficiencies in last-mile delivery. Any logistics business is fraught with complaints relating to late deliveries, package return and damage and in some extreme cases package theft. A study by Accenture in 2018 found that in US almost 81% of people are not ready to pay more than $5 for delivery. For a business that relies on high volume and low margins, optimising the last mile is the way forward as it would directly impact increase in profits and better customer satisfaction. Here are some key reasons to be looked over so that the customers and businesses go home with nothing less than a happy face.

Optimizing last-mile logistics begins with creating a fit-for-purpose fulfilment network. An Integrated Design Network is based on suitable service requirements that have both online and offline impact. Route optimization is the cornerstone of this business. Yet many companies don’t use real-world information to optimize routes. It can be easily accomplished by leveraging modern technologies. A dispatch & delivery management software which automates delivery routes using a set of permutations and combinations algorithms, if used in real-time for shortest and efficient routes can avoid unnecessary delays and wastages of resource capacity thereby reducing costs by almost 20%.

Monitoring of different activities including personnel involved in last-mile delivery is essential to maintain high productivity. According to a DHL report, it is estimated that about 40–60% of drivers’ time is wasted when away from distribution centers, not driving. Tracking and monitoring people, tasks and daily activities like loading time, vehicle checks etc shows ways to factor in efficient processes. Here too, a last-mile-delivery software can be used to track and manage all drivers and other activities via an integrated dashboard. Data generated through tracking can be used for creating efficient plans for the future. For example, data on order history can easily predict the heavy/lean days and time slots, based on which the driving staff can be efficiently assigned.

Monitoring customers’ demand schedules and maintaining their histories to identify problem areas and devising best-suited delivery schedules can be equally beneficial to logistics companies. Logistics businesses can actively work with customers to eliminate problem sources.

Payment on Delivery is a popular option for customers for online purchases. It allows buyers to make payments for their purchases via cash or card at the time of delivery of their orders. This last-mile delivery facility enables customer to be in control of the purchase process especially the final transaction part. It has become an integral part of the individual customer online consumption process. From the buyer’s viewpoint, for many, the COD mode is preferable as payments are made only after a delivery arrives. Hence, there are fewer risks since the payment is made only after the ordered product is delivered.

Though in cash transactions, sometimes tendering an exact amount for the customer or tendering change for delivery person becomes difficult. Logistics players can look at new possibilities to make the COD mode easier. Linked Online Transaction Platforms is an effective way to count the problem of exact cash/change. Businesses can generate their own bar codes on different online transaction platforms, enabling clients to make safe and easy payments platforms like PayTM, PayPal, Google pay etc.

The customer-centric approach works out better than a business-oriented one. Bringing everything to customer’s fingertips helps in end-to-end transparency regarding order status which in turn positively impacts customer’s trust. Last-mile software gives customers control and contact with their shipment which enhances a long-term positive connect.

Efficient last-mile logistics movement optimization is the key, not just to on-time deliveries, but also to high customer satisfaction and retention. In a nutshell, to ensure a happy family of customers and to stay ahead of the competition, it is vital to have an advanced last-mile delivery. The in-store environment has to be replaced with ‘perfect delivery experience’ as logistics is no longer a cost-guzzling variable but adds a lifetime value to the business.

By Abhishek Bansal, Co-Founder & CEO, Shadowfax