Today's customers expect fast and reliable shipping. To meet these expectations, courier and delivery providers need to continually revisit their final mile delivery strategy. In this article, we'll go over some common features of final mile delivery and provide a guide to how you can overcome challenges.
What Is Final Mile Delivery?
Final mile delivery is the last step of the delivery process when a parcel is moved from a transportation hub to its final destination. Although it's the most time-consuming and costly step in the delivery process, it's also one of the most important. As consumer demand for speedy final-mile shipping rises, so does the importance of delivering the packages as affordably, quickly, and accurately as possible.
What Types of Businesses Need Final Mile Delivery
Final mile delivery is relevant for any business that delivers products directly to its consumers.
Some of these businesses include:
- Third-party logistics companies
- Direct-to-consumer retail companies
- Food delivery companies
- Big-box stores
- Ecommerce businesses
As a delivery company, you can partner with any of these businesses to provide them with final mile services.
The Cost of Final Mile Delivery
As "free shipping" continues to become more and more prevalent, customers are less willing to pay a delivery fee, forcing your clients to make difficult decisions. In order to stay competitive in this industry, final mile delivery companies need to keep delivery costs as low as possible.
Final mile delivery costs can be broken down into three main categories:
- Dispatching – Route optimization, driver visibility, and delivery schedules can all impact the cost of the final mile delivery.
- Delivery – Some factors that impact costs during delivery include the time frame, size of orders, delivery scope, and vehicle mileage.
- Technology – This can include the costs of implementing software, smart tracking technology, up-to-date hardware, and more.
Optimizing all three of these common final mile delivery costs is key to industry success. In the following section, we'll discuss some of the common challenges that final mile delivery providers face as well as some solutions.
Final Mile: Problems and Solutions
Delivering On Time Every Time
Final mile delivery involves carrying many small packages to unique destinations. The more stops your drivers make, the more complicated your routes and overall logistics become. The increasing demand for same-day delivery adds another level of difficulty. According to a study conducted by Invesp Conversion Rate Optimization, more than half of online shoppers aged 18-34 expect same-day delivery, and over 60 percent of them say they'd pay more to have their packages delivered on the same day. Meeting these expectations is a huge challenge for final mile couriers.
One of the best tools available for keeping up with this increasing demand is route optimization software. Route optimization software considers delivery time windows, geography, and other factors when creating routes. This leads to less time on the road, saving personnel, vehicle maintenance, and fuel expenses. Businesses can see a 20% to 40% reduction in fuel costs and drive time from route optimization. Route optimization also helps to increase delivery capacity. The more time you save with optimized routes, the more time your drivers have to add new stops to their routes.
Going the extra mile
Good customer service is an important part of a successful final mile delivery strategy. There are a few things you can do to improve your customer experience, including notifications, integrations, and proof of delivery.
According to one study, about 5 to 10 percent of all final mile deliveries fail. This has a significant negative impact on your customer experience. As a final mile delivery provider, it's important to minimize failed deliveries as much as possible.
One way to avoid failed deliveries is to ensure that your customers stay informed on their order status, such as when an order is received, in transit, or delivered. With the right software, you can keep your customers up-to-date with automatic notifications. Not only does this make failed deliveries less likely, but best of all, it increases customer loyalty and satisfaction.
Another great way to improve the customer experience is through software integration. One of the most common ways to integrate is through an application programming interface (API). With an API solution, you can share documents, automatically send updates, and more. Advertising your ability to integrate with other systems can also help you to win new business.
High-quality proof of delivery (POD) also improves customer satisfaction. POD confirms the time, condition, and exact recipient of a delivery. This gives customers peace of mind knowing they received their package on time.
There are a few different POD methods—each with its own strengths and weaknesses. Signature proof-of-delivery is the original POD and one of the easiest to implement, photo proof-of-delivery has increased in popularity in the past few years, and barcode scanning is one of the quickest and simplest ways to confirm that the correct parcel has been delivered.
Equip your Drivers
Because of increased demand for final mile delivery, keeping a consistent driver base is difficult. Improving driver experience can go a long way towards keeping your drivers loyal. One of the best ways of doing that is by making their jobs easier using smart technology. Many drivers carry around multiple items, including barcode scanners, pricing sheets, order lists, GPS devices, and phones. With the right mobile app, a smartphone can accomplish the function of all these items:
- GPS tracking – GPS trackers can be an expensive addition to your driver's toolbox. On top of that, it can be difficult to integrate trackers into your software workflow. In contrast, with a mobile GPS tracker, dispatchers can keep track of drivers and send out new routes, all using the same software.
- Barcode scanning – Modern technology allows you to scan barcodes with your phone and quickly indicate when a package has been delivered. This eliminates the need for drivers to have a dedicated barcode scanner.
- Automatic notifications – With automatic notifications, your drivers don't have to send updates to customers. Notifications are triggered whenever the driver makes the update.
Although the final mile industry can be competitive, with the right workflow and tools, you can stand out and win more business. Contact our sales team directly or book a live demo to try out OnTime delivery software.