Despite inflation and economic unpredictability, e-commerce remains an industry ripe for growth. Pitney Bowes anticipates global parcel volume to reach 256 billion by 2027 – an 8.5% CAGR from 2022 – and global retail e-commerce sales are still expected to reach US$6.3tn
this year alone. When it comes to the last mile, there remains an incredible opportunity for brands, carriers and logistics providers to capitalize on the momentum and even greater stakes to meet incredibly demanding expectations.
The reality for many though is that while the last mile can serve as a strong competitive advantage, these operations continue to stand as one of these most challenging pieces of the overall logistics puzzle, even for well-established enterprises. That final mile stretch is costly, it’s wrought with real-world obstacles that brands and carriers must overcome every single day, and while it can elevate the modern customer experience, it can just as swiftly damage it if mishandled.
Everything from limited fulfillment capacity to inefficient route planning and disconnected systems managing last-mile operations put retailers at risk of failed execution. Those that don’t adapt to current trends and more strategically connect the dots between logistics operations and customer experience at all levels will consistently lose out.
Here’s what the last-mile industry looks like today and what logistics, retail, CEP and 3PL leaders should keep top of mind to stay ahead of the curve.
Customers want what they want, whenever they want it
With Amazon reporting its first unprofitable year, it’s clear that even major companies are facing hurdles in the wake of today’s ‘everything now’ economy. Above all though, what consumers want is a memorable, seamless and fulfilled delivery experience that factors in shipping costs, provides on-demand delivery options and comes with clearly defined delivery windows for the ultimate convenience.
For brands, CEPs and 3PLs, this will require much closer alignment between logistics operations and the customer experience. Smart, dynamic routing options will increasingly become key to satisfying customer-preferred timelines and maintaining optimal capacity and service efficiencies. Capacity-led bookings for instance, can help ensure that there are available slots upon checkout for end consumers and can accommodate dynamic order demands without sacrificing added spend.
Getting this right is an opportunity for retail brands and logistics providers to solidify fulfillment as an impactful point of differentiation in a competitive retail and e-commerce landscape, a driver of brand loyalty to keep customers coming back for more, and a growth enabler for their business operations.
Emerging technology is paramount to success
With tons of factors in play around last-mile delivery – fulfilling hundreds or thousands of on-demand orders; finding the right delivery partners; ensuring on-time deliveries within designated windows; and real-world obstacles such as heavy traffic, construction or poor weather conditions – companies can no longer rely on human brain power alone to navigate the various hurdles of last-mile logistics.
Artificial intelligence, machine learning and predictive analytics help to remember, adapt and work with large masses of data in ways that the human brain and manual manpower cannot. It has been proven to improve decision making – increasing efficiency, cutting costs and minimizing human dependency at every step of the supply chain as a result.
This technology offers the ability to not only capture, analyze and action against thousands of variables, but also use historical data for future projections to drive more efficient functions across dispatch planning, scheduling, routing and consumer behaviors. In turn, utilizing emerging technologies can allow companies to cut logistics costs, save precious time and ultimately build better relationships with their customers, providing a point of differentiation in a market often dominated by big-name players.
Sustainability isn’t a buzzword anymore, it’s business critical
A recent survey found that 75% of US consumers are concerned about the environmental impact of the products they buy. As such, consumer demand and expectations have made sustainability a mandatory need for businesses.
Even from a regulatory standpoint, the US government is taking necessary steps to drive ESG forward, recently publishing its National Blueprint for Transportation Decarbonization, which sets a national target to reduce carbon emissions by 2050.
To deliver on ESG goals though, companies will increasingly need to be more strategic in their approach and implement a variety of tactics, from bringing fulfillment centers closer to consumers, incorporating tactics such as parcel lockers to reduce carbon emissions, or investing in electric vehicles. On the technological and software side, enterprises and retailers that implement tools that optimize capacity planning, slot management and routing will be able to reduce empty miles and carbon emissions by clustering deliveries for high drop density and optimal load capacity and utilizing fleet optimization for a lesser number of vehicles on the ground.
Driver health and wellness is front and center
It’s unlikely that 2023 will shed the workforce-related issues that plagued 2022, including union strife, contractor upheaval and labor shortages just to name a few.
Drivers are tired of the immense pressures they’re under to make daily on-time deliveries without the support they need from their employers to be set up for success and they will increasingly push back on undesirable working environments if left unaddressed for long.
A major opportunity to improve driver satisfaction and attract new drivers comes in the form of driver payout visibility, which allows drivers to view their earnings and payout information in real time, typically through a web portal or mobile app. The visible details include trip earnings, bonuses and deductions, along with a schedule for payouts and method of payment, helping drivers to better understand their earning potential and plan their finances accordingly.
Above all though, driver health and wellness must and will continue to take a front seat as drivers begin to expect companies to empower them with the right technology, resources and incentives that set them up for long-term success and won’t waste any time in abandoning current posts for those that do.
The time is now
As the logistics and retail industries continue to remain hypercompetitive, the time is now for enterprises to seize opportunities to differentiate themselves and drive impactful results against challenging economic, consumer and environmental pressures. Putting customer expectations first, utilizing AI, machine learning and emerging technologies to streamline supply chains and prioritize sustainability, and setting drivers up for success will be critical components to staying ahead of the curve now and in the years to come for last-mile professionals.
