When studying ecommerce leaders like Amazon, it becomes clear that focusing on the customer journey is the path to scaling growth. Last mile delivery is the stage of your supply chain that puts your product directly into the hands of your customers. Getting it right can significantly impact customer experience, driving increased sales.
How can optimizing your final mile logistics elevate the overall customer experience, and how does that impact your bottom line? Let’s explore its importance and the cost-saving benefits a well-optimized process can offer to your business and customers.
Last mile logistics is the process of taking your products from a distribution hub to the end customer. This step of your shipping operations directly impacts customer experience and represents a significant portion of shipping costs. In fact, it accounts for roughly 41% of overall supply chain costs, according to a report by Capgemini Research Institute.
For enterprise ecommerce, well-refined management of the last mile shipping stage can help separate you from your competitors, leading to:
Continuously improving how the final mile of your product’s movement through the ecommerce supply chain can make or break relationships with your customers and, if not appropriately handled, cost your business more than you initially forecasted.
A streamlined process offers these five benefits:
The final leg of the shipment process — factoring labor, fuel, vehicle maintenance, routing, and the potential for failed delivery attempts — accounts for a considerable portion of your annual shipping spend. You can reduce these expenses by diversifying your mix of regional last mile service providers near your fulfillment centers (FC) and enhancing your carrier selection process.
By better managing your last mile delivery logistics, you:
Use shipping technology with real-time transit data to make smarter decisions and cut costs. Integrating software solutions with your existing systems allows you to optimize choices like selecting the best last-mile delivery service and uncover cost-saving opportunities throughout your fulfillment process. For example, using the Shipium platform to power data-driven decision-making, customers see a parcel spend reduction of roughly 10%.
With consumers demanding quicker shipping than ever, maximizing the efficiency of your end-to-end product delivery has never been more important. According to CB Insights, 68% of consumers say shorter estimated delivery dates (EDD) influence online purchase decisions.
By streamlining and automating your delivery operations to select the best final mile carrier for every single order, you ensure:
A great way to ensure your supply chain never becomes complacent is to analyze its performance continually. Advanced tools like Shipium Simulation allow you to test your fulfillment strategies against various scenarios, like implementing new or alternate last-mile service providers, to uncover opportunities to increase efficiency and reduce your annual expenses.
A significant factor in optimizing your final mile carrier management is analyzing your supply chain data to understand where your customers are, ensuring your products are as close as possible. You can be more proactive in planning and executing your fulfillment by properly integrating your systems and centralizing your data into one go-to source of truth.
With a final mile strategy driven by insights, you gain:
Providing your customers with transparent delivery estimates before they click the buy now button can boost conversions while failing to meet those estimates can negatively affect your bottom line. According to Descartes’ Consumer Sentiment Report, 44% of respondents lost trust in a brand or never ordered again because of poor delivery.
Optimizing your last mile delivery workflow helps keep your promises, offering:
Even though last-mile delivery is the final step in your supply chain, it is the first point of contact between your customer and your product, making it integral in ensuring your customers are satisfied with their purchase. As a Merkle report revealed, 75% of consumers are more loyal to brands that offer a great experience.
A well-refined final mile logistics process provides:
There are many options for last mile delivery companies, depending on the regions where your customers reside.
When selecting carriers to add to your mix, consider:
| Considerations for last mile carrier selection | Benefits to your business |
| Cost and pricing structure | Clearer profit margins and the ability to offer competitive shipping rates to customers |
| Delivery speed and reliability | Improved customer satisfaction and competitive advantage |
| Technology and tracking features | Operational efficiency and customer visibility into their order status |
| Geographic coverage and flexibility | Ability to serve diverse customer bases and expand into new markets as needed |
| Customer service and support | Effective issue resolution and improved brand's reputation beyond the delivery itself |
Using a multi-carrier platform like Shipium, you simplify selection by leveraging a built-in network of reliable final-mile delivery service providers, such as AxleHire, CDL, TForce Logistics, Better Trucks, and OnTrac.
With the Shipium platform, you can seamlessly integrate your existing systems to ensure every order is shipped at the right time from the right locations in your network, reducing your shipping expenses and boosting your customers' experience. Our Fulfillment Engine powers real-time decision-making, helping uncover cost-saving opportunities and saving our customers up to 12% on average.
Book a demo today and discover how Shipium refines your last mile delivery.
Final mile delivery is the last stage of the shipping process. It’s when packages from a distribution center or local hub get delivered to their final destination, typically the customer's home or business.
Ecommerce shippers face several challenges with last mile delivery operations, including:
Final mile fulfillment significantly impacts parcel shipping costs as it: