With the surge in e-commerce, online shopping and food-delivery services, businesses are continuously seeking ways to improve their supply chains. Now more than ever, a substantial component of shipping and logistics is last-mile delivery. This final stage in the delivery process represents the most significant challenge for the majority of retailers and logistics companies.
The explosion in e-commerce has completely transformed last-mile delivery. According to the World Economic Forum, the demand for last-mile services is expected to grow by 78% globally by 2030. The global online food delivery services market alone is expected to reach $154.34 billion in 2023, representing annual growth of 11.51%, Research and Markets reports.
Last-mile delivery is the top driver of customer satisfaction in a supply chain and logistics business. As the most time-consuming, expensive, and unpredictable element of the entire process, it directly impacts a supply chain's profitability. According to a Capgemini study, last-mile delivery is the biggest cost driver in the supply chain, representing a whopping 41% of supply chain costs.
As enterprises compete to keep promises of next-day, same-day or two-hour deliveries, future solutions will need to be more cost effective, faster, and run more smoothly. The demand for last-mile applications that are scalable, on-demand and in real time will soar.
Having experienced the challenges of the past year, supply chain leaders understand that many new obstacles still lie ahead. The majority have learned that partnering with technology-centric logistics providers is critical for expanding e-commerce, enabling visibility across supply chains, and meeting today’s high level of customer demand.
To achieve increased efficiency throughout supply chain operations, leaders must draw on effective last-mile delivery technological solutions. Whether or not a current supply chain operation has integrated some form of technology, the future is clear: technology is crucial to ensure a seamless and smooth last-mile delivery.
In particular, route-optimization software enhances supply chain productivity and helps to ensure a positive customer experience. It allows supply chain businesses offering last-mile delivery service to provide end-to-end visibility throughout the delivery process.
Utilizing predictive analytics, technology-based solutions can even optimize real-world factors for route planning, resulting in faster delivery times, reduced shipping costs and better asset utilization. With the use of data, statistical algorithms, and machine learning, predictive analytics can identify the likelihood of future outcomes based on historical data.
A key element in the successful integration of software for last-mile delivery of food, grocery and other e-commerce items is the calculation of transit times from counter-to-couch, rather than just on-road travel. This includes accounting for the last-yard stage, which is the transfer of goods into the receiver’s hands.
If the past year has taught us anything, it’s to prepare for the unexpected. Technology gives us the power to deploy location-based solutions, control each step of the supply chain process, and implement strategies for last-mile delivery success.
Gaurav Bubna is co-Founder of Nextbillion.ai, a spatial data-mapping platform.