Picture this: You order a product of your choice through an eCommerce website. You wait in eager anticipation for the delivery of the product. However, there is an inordinate amount of delay in the delivery. How does that leave you feeling? Delays in last-mile deliveries leave customers frustrated. Unsurprisingly, these days customers are spoilt for choice, and are ready to shift loyalties to rival companies if their expectations are not met with regard to delivery standards.
This makes last mile delivery challenges a critical concern for retailers, eCommerce companies, and logistics providers.
What Is Last Mile Delivery?
Last mile delivery refers to the final stage of the delivery process, where goods are transported from a warehouse or distribution hub to the customer’s doorstep. This stage is often the most expensive, complex, and customer-visible part of the supply chain.
Why Last Mile Delivery Challenges Matter for Businesses?
Impact on Customer Experience
Delivery delays, lack of visibility, and failed deliveries directly impact customer satisfaction and brand loyalty, especially in highly competitive eCommerce markets.
Cost and Profitability Implications
Since customers are reluctant to pay additional delivery fees, businesses are often forced to absorb last mile delivery costs, putting pressure on margins and operational efficiency.
Key Last Mile Delivery Challenges
Route Planning and Optimisation Challenges
Finding the best possible route for a delivery driver to follow while travelling from the warehouse to the destination for product delivery is a critical aspect of llast-miledelivery. Inefficiencies at this stage lead not only to delayed deliveries but also result in increased costs for the retailer.
High Cost of Last Mile Delivery
Retailers, in most cases, have no option but to absorb last mile delivery costs, since consumers tend to abandon online shopping carts if they see any unforeseen additional costs apart from the cost of the purchased product.
Traffic Congestion and Urban Density
Traffic congestion, limited parking, and restricted delivery windows in urban areas significantly increase delivery time and operational complexity.
Lack of Transparency and Real-Time Visibility
After placing the order through an ecommerce website, customers are interested and even demand to know the progress of the delivery of their order.
Failed and Missed Deliveries
Incorrect addresses, unavailable customers, and communication gaps often lead to failed deliveries, increasing costs and impacting customer satisfaction.
Demand Fluctuations and Peak Volumes
Seasonal demand spikes and promotional events place additional strain on last mile delivery networks, making capacity planning and execution more difficult.
Use of outdated technology
The use of outdated technology in logistics in this day and age might seem like a remote possibility. However, the fact of the matter is that several logistics companies still shy from using the latest technology. Even if they do adopt modern technology, it is often in the areas of warehouse management, thus short shifting last mile-delivery. This leads to lost customers and missed opportunities.
how to solve last mile delivery challenges?
route optimisation Uusing Aanalytics and AI
Advanced analytics and AI-powered route optimisation tools help identify the most efficient delivery routes by factoring in traffic, weather, and delivery constraints.
real-time tracking and visibility platforms
Modern delivery tracking solutions provide real-time visibility into vehicle and parcel locations, enabling proactive issue resolution and improved customer communication.
technology-enabled dispatch and fleet management
Auto-dispatch systems and GPS-enabled fleet management tools improve driver utilisation and reduce manual intervention.
leveraging logistics process outsourcing
Logistics process outsourcing allows organisations to optimise last mile delivery operations by leveraging specialised expertise, scalable resources, and proven technology platforms.
business benefits of optimising last mile delivery
Optimising last mile delivery helps organisations reduce cost per delivery, improve asset utilisation, enhance customer satisfaction, and increase operational agility.
How Infosys BPM Helps Overcome Last Mile Delivery Challenges?
Infosys BPM logistics business process outsourcing can help organisations navigate last mile delivery challenges by enabling route optimisation, improving visibility, and reducing operational inefficiencies through technology-enabled delivery models.
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FAQ
The biggest last mile delivery challenges include high delivery costs, inefficient route planning, traffic congestion, lack of real-time visibility, failed deliveries, demand fluctuations, and reliance on outdated technology. These challenges directly impact customer satisfaction and profitability.
Last mile delivery is the most expensive stage because it involves smaller delivery volumes, high labor and fuel costs, urban congestion, failed delivery attempts, and limited route efficiency. Businesses often absorb these costs to meet customer expectations.
Poor route planning leads to longer delivery times, higher fuel consumption, and increased operational costs. Optimised route planning using analytics, AI, and real-time traffic data helps reduce delays and improve delivery performance.
Technologies such as real-time tracking, GPS-enabled fleet management, analytics, IoT, and automated dispatch systems help improve visibility, optimise routes, reduce failed deliveries, and enhance overall last mile delivery efficiency.
Logistics process outsourcing helps businesses overcome last mile delivery challenges by providing access to specialised expertise, scalable delivery operations, advanced technology platforms, and cost-efficient execution models that improve service levels and reduce complexity.
