Why Last-Mile Logistics is More Important Now Than Ever Before

May 21, 2020 | Industry | 0 comments

What is last-mile logistics?

First adopted by the telecommunications industry to describe the challenge of connecting individual homes to a wider network, the “last mile” is now used among supply chain professionals to explain the final step in the transportation of goods to consumers.

The increase in popularity of online shopping in recent years has accelerated the importance of last-mile logistics, as it has become common for consumers to shop from the comfort of their homes and receive delivery of their order right on their front steps. Furthermore, fast, free shipping has become more and more popular among eCommerce merchants, and this has contributed to rising consumer expectations. Rising expectations and dwindling consumer patience are among the many challenges supply chain professionals face in getting last-mile logistics just right. The final mile represents over half of the total cost of shipment of goods, so there is zero room for inefficiency in the process to protect the bottom line.

What’s more, last-mile logistics are perhaps the most consumer-facing part of the supply chain. Who among us hasn’t spent a day refreshing a carrier tracking page waiting for that hotly anticipated delivery to arrive?

How have recent events impacted last-mile logistics?

Mandatory shutdowns of retail stores and stay-at-home orders have fundamentally shifted the way we shop. Instead of heading to the mall, consumers have been turning online to purchase goods. The numbers are in: U.S. e-commerce sales increased by 49 percent in April, compared to the baseline period in early March before social distancing restrictions went into effect.

While this spike may be temporary, the effects of the COVID-19 pandemic will shift consumer habits and the retail industry for a long time to come. Anxiety around spending time in public will linger, and the shopping experience will be different as stores begin to reopen their doors with new safety guidelines in place.

Many businesses have struggled to keep up with the sudden surge in demand for home delivery. Grocery stores, for example, have seen a 110% rise in daily sales between March and April, and many have been unable to keep up with the demand for pickup orders and home delivery, often with delivery slots booked for a week or more into the future.

What do supply chain professionals need to know about last-mile logistics?

There are two sides to the coin when it comes to mastering last-mile logistics. As the most consumer-facing link in the supply chain, it’s important to get the last mile right. Consumers want fast, free delivery in most cases, and that brings us to the other side of the coin: meeting those demands while also protecting the bottom line.

The key to meeting consumer demands without exploding costs is technology. The right last-mile logistics technology enables businesses to automate processes, eliminate time-consuming paperwork, and boost efficiency with tools like route optimization.

A last-mile logistics solution that’s integrated with the holistic supply chain technology ecosystem offers the tracking and visibility needed for maximum accuracy and control, keeping your team organized and efficient. Look for mobile solutions that enable you to quickly scale up when demand surges, as we’ve seen in recent times. By using a BYOD, or “bring your own device” solution, you can easily add more drivers when needed without needing to purchase costly hardware.

Ready to learn more about Magaya Final Mile?

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