Pandemic-driven double digit-growth in e-commerce and the corresponding growth in demand for fast and reliable home delivery is unlike anything we’ve experienced before. For shippers and carriers, it’s starting to feel like peak season lasts 52 weeks a year, and along with an industry-wide labor shortage and cargo ships sitting offshore, the challenges seem endless. In addition, savvy consumers are driving last-mile delivery strategies with preferences for speed, accuracy, visibility, and sustainability. With so many options for online shopping, fast, affordable, on-time delivery plays a huge role in maintaining customer loyalty.
These challenges are driving innovation in last-mile delivery. As a result, shippers are shifting to new last-mile strategies like utilizing more agile, tech-forward regional carriers and distributed inventory techniques that put goods closer to the end consumer and streamline delivery. Although it’s not always easy to implement a new last mile strategy, we’ve compiled a list of the most common challenges (and solutions) to make last-mile shipping a success for any retailer or e-commerce company.
Challenge #1: Integrating Technology Systems
Integrating a new last-mile strategy, whether adding a new route or a new carrier, often requires significant time to ensure established systems and new technology will play nicely together. Connecting the dots between new and older systems that may not blend well is essential to ensuring the transition is as seamless as possible.
Solution: Start by evaluating and making a list of all technology that may need to be integrated, including current transportation management, warehouse management, order management, CRM, and ERP systems. Check for pre-packaged integrations between your carrier and your existing software platforms. Ensure that your new carrier has a robust suite of APIs (software intermediaries that allow two applications to talk to each other) to enable information exchange across systems. When selecting a carrier, your tech team should be involved from day one to ensure there are no surprises and that integration does not become a bottleneck delaying your launch.
Challenge #2: Attracting and Retaining Drivers
The labor shortage in the logistics industry has become more acute as the demand for e-commerce has continued to climb. There are more packages to be delivered and rarely enough drivers to deliver them. So, what can companies do to attract and retain talent and keep customers happy?
Solution: While drivers crave flexibility, they also want to make the best use of their time by working with a company that provides efficiencies like a reliable schedule and the most efficient driving routes. For gig drivers, efficiency equals profitability. And in the era of The Great Resignation, drivers want to work for companies that value them and provide a sense of purpose. Being upfront about your company’s mission and vision and sharing the pain points you’re solving in the industry can go a long way in attracting and retaining talent.
Challenge #3. Integrating Operations from the Get Go
Adding a new carrier to the mix can cause even the most well-run companies to falter with their logistics if everyone isn’t on the same page and day-to-day operations aren’t laid out transparently from the beginning.
Solution: It’s critical to be in lockstep with your new partner and share your company’s current and forecasted package volume forecast, regional growth plans, customer expectations, and anticipated changes. Ensuring that everyone is on board, from executives to frontline workers, provides a streamlined process. Taking the proper steps to ensure a successful initial kick-off bodes well for the future.
Challenge #4: Customer Communications
Today’s consumers want to know where their packages are as soon as they purchase from a store or website. End-to-end customer communication, including real-time tracking (like seeing where a truck is en route), can make or break their last-mile delivery experience. Ensuring a customer can make changes up to the last minute is also of increasing importance.
Solution: A last-mile delivery partner should help ensure that customer communication is seamlessly integrated into a company’s website or app to ensure no gaps in communications from purchase to delivery. Real-time updates can enhance a consumer’s experience by freeing them from waiting around or dealing with uncertainty. It also provides proof and transparency through the whole delivery process. For example, a photo of the delivered package on a customer’s front porch with the address/house visible is hard to dispute.
Challenge #5. Sustainability
According to Deloitte’s 2021 Holiday Survey, 63% of consumers are willing to pay more for certified sustainable/eco-friendly goods, while 42% prefer shopping at retailers that adopt sustainable practices. These numbers are trending upward. Customers are willing to pay a premium for sustainable products. Of course, they still want their packages delivered as quickly as possible, but the more sustainable, the better.
Solution: Utilizing a delivery provider who works to take the necessary steps to reduce unnecessary greenhouse gas emissions can be a big win for customer expectations. Finding new solutions for old problems doesn’t have to be complicated. Exploring partnerships with electric vehicles, robots, remote-controlled and autonomous vehicles can help create a greener supply chain.
With the continued growth of e-commerce showing no signs of slowing down any time soon, today’s shippers need to pay close attention to their last-mile strategies. Flexibility, communication, adaptation, and sustainable practices integrated with technology can help form the right solutions to benefit both shippers and consumers.