29 January 2024 Discover some strategies to overcome last mile challenges and provide a pleasant experience for customers. It’s no surprise that the logistics universe presents various challenges for managers, and with the constant growth of e-commerce and omnichannel sales, one of these obstacles may arise during the last mile, the final phase of the supply chain where products are delivered directly to the consumer. In this phase, everything is at stake, and the ability to anticipate and overcome bottlenecks throughout the process can be a determining factor for service quality, customer loyalty, and, most importantly, the company’s reputation. According to Zendesk data, about 50% of consumers are likely to abandon a brand if they encounter issues with delivery or during the payment process. In the Brazilian context, this rate is even higher, reaching the 80% threshold. Given this scenario, efficient management of the last mile requires our full attention. The biggest challenge is finding ways to ensure faster and more accurate deliveries by developing effective strategies to optimize supply chain management. But where to start? The main goal of this article is to share strategies for an efficient delivery management system, aligned with logistical needs, to provide solutions that not only contribute to operational efficiency but also reduce costs and transform the customer experience at the end of the mile. After all, how does the last mile work? The last mile is nothing more than the final phase of the supply chain, which includes delivering a product to the consumer. Recognized as one of the most challenging phases of the logistics process, it is here that the company establishes the correct flow of goods transportation from the distribution center to the final destination, which can be the customer’s home or a pickup point. The complexity of this process is highlighted by some obstacles, such as dense urban areas, remote rural regions, congestion, limited parking, and the growing pressure for increasingly shorter delivery times. Therefore, ensuring efficiency in the last mile has become a significant challenge for companies. Imagine an e-commerce that has received an order to deliver an appliance to a customer in the central area of a bustling city. The challenge begins at the distribution center, where the team must ensure the product is properly packaged and loaded into the transport vehicle. Along the route, the driver must navigate narrow streets, unpredictable traffic jams, and parking searches, all while meeting tight delivery schedules. In this scenario, delivery tracking becomes mandatory, providing real-time visibility of the vehicle’s location and estimated arrival date. This situation exemplifies how last mile challenges require much more than just logistical efficiency. It is essential to invest in innovation and make continuous adaptations. Companies that master this final step do more than just deliver products; they convey trust and satisfaction, creating an experience that goes beyond the mere act of purchasing. The main challenges of the last mile Route optimization, traffic management, logistics costs, and the need for flexibility to meet different customer delivery preferences represent some common last mile challenges that can potentially trigger issues for the supply chain and affect corporate customer reputation. Below, we will explore some of these obstacles that may arise during the last mile phase and strategies to overcome them. 1- Delivery speed Consumer expectations for increasingly shorter deadlines are evident, and this desire is not just a preference but a real need in the current e-commerce scenario, becoming one of the biggest challenges of the last mile. The pressure for fast deliveries has grown exponentially, driven by the expansion of e-commerce and, especially, the strengthening of major players like Amazon and Mercado Livre, who continuously innovate to offer same-day delivery to as many buyers as possible. Invesp data reveals that about 80% of shoppers want delivery on the same day as their purchase. Therefore, the shorter the time between the purchase click and the product’s arrival, the better. The lack of skills and application of strategies to improve delivery speed can lead to decreased customer satisfaction, as well as impact brand loyalty. So how can we optimize logistics for same-day delivery? First, the strategic location of distribution centers plays a crucial role. Positioning these centers in key areas can significantly reduce the distances to be covered. It is also important to have well-defined internal picking and shipping processes, using the most appropriate separation method for the company. The implementation of advanced routing technologies is another measure that helps reduce transport times by allowing drivers to follow the fastest routes and avoid congestion. Additionally, partnerships with local delivery services can be explored to leverage existing fleets and achieve broader coverage. 2- High operational and transportation costs All the logistical complexity involved in direct-to-consumer delivery contributes to increased operational costs. Consequently, if there is no effective planning, these expenses can become a bottleneck, directly impacting the company’s profitability. Shipping cost is also an important factor. According to Statista data, rising shipping costs are one of the reasons why 63% of consumers abandon their cart. Therefore, finding ways to optimize delivery is essential. High operational and shipping costs not only reduce profit margins but can also negatively impact market competitiveness. One way to address these challenges is to implement strategies aimed at improving efficiency and reducing expenses, such as: Smart routing, using specialized software; Consolidating shipments when possible to minimize empty trips; Strategic warehousing; Packaging efficiency for better space utilization in transport; Partnerships with transportation companies; Cooperation with other companies to minimize logistics costs; Transparency in shipping costs; Continuous cost evaluation and identification of improvement areas. 3- Mismatches in final consumer delivery Direct Store Delivery attempts at inappropriate times can be one of the last mile challenges. This happens when the courier manages to arrive at the location but cannot find anyone to receive the order. Such a situation not only causes frustration for both parties involved but also negatively impacts operational efficiency and costs. The importance of delivery at the most convenient time for the customer has become evident, with about 73% of consumers considering this factor more relevant than delivery speed itself, as highlighted by a study from the Capgemini Research Institute. To overcome this challenge, companies can adopt strategies that prioritize customer convenience, including flexible delivery windows, as well as allowing transparent and real-time communication on delivery status, enabling rescheduling options to fit customer schedules and implementing delivery at strategic pickup points. 4- Delivery security Concerns such as theft, hijacking, or product damage also fall among the last mile challenges, and the scenario is particularly critical in Brazil. According to the National Association of Cargo Transport and Logistics, just in 2022, the loss from cargo theft was 1.2 billion R$. The incidence of robberies and thefts not only compromises product safety but also the integrity of the logistics operation, along with the direct financial impact. These incidents cause delivery delays, customer dissatisfaction, and damage to the company’s reputation. The implementation of advanced real-time tracking systems to monitor and ensure delivery visibility, planning safe routes based on updated data on previous incidents, integrating anti-theft technologies into vehicles and packaging are among the strategic actions to tackle this challenge. 5- Losses and reverse logistics Lost orders can cause losses for both e-commerce and the delivery company. The loss of products during transport generates additional replacement costs and compromises brand reputation, impacting customer trust. During the reverse logistics process, where products return to e-commerce due to exchanges or returns, challenges persist. The agility of transport, essential during delivery, is often not replicated in reverse logistics, resulting in potential friction with customers. Effectively managing these challenges requires strategies that address not only security but also the integrity and efficiency of returns and exchanges. To achieve this, having technologies for tracking and automating logistics processes is an extremely important measure. 6- Sustainability The increase in last mile activity also raises the emission of atmospheric pollutants, contributing to air pollution and worsening urban environmental problems. Delivery vehicles powered by fossil fuels, congestion from increased delivery traffic, and excessive packaging are some of the factors contributing to this additional carbon emission. Investing in sustainable delivery fleets, such as electric or low-emission vehicles, consolidating loads to optimize routes and reduce emissions, developing efficient reverse logistics systems for recyclable packaging, exploring walking or bicycle deliveries in urban areas, and using sustainable and recyclable packaging are some practices that mitigate environmental impact and contribute to building ecologically responsible logistics. Overcoming last mile challenges with WMS and OMS In addressing last mile challenges, the technological solutions offered by warehouse management systems (WMS) and order management systems (OMS) emerge as essential catalysts for operational efficiency and customer satisfaction, acting in: Inventory optimization: the WMS system aids in optimized inventory management, ensuring products are readily available to fulfill customer orders, reducing preparation times. Efficient picking: the WMS brings together advanced picking functionalities, such as batch picking and zone picking, which can significantly improve efficiency in item retrieval, reducing errors and delays in the last mile. Real-time order management: the OMS system offers real-time tracking of order status, allowing quick and effective adjustments in case of unforeseen events or changes in customer preferences, ensuring timely deliveries. Intelligent prioritization: the OMS system can prioritize orders based on criteria such as urgency, location, and customer profile, ensuring resources are efficiently allocated to the most critical orders in the last mile. Load consolidation: by analyzing demand data, the WMS system can identify opportunities to group multiple deliveries into a single vehicle, promoting efficiency and minimizing environmental impact. Real-time tracking: the integration of real-time tracking technologies offered by WMS and OMS provides complete supply chain visibility capable of accurately monitoring deliveries and facilitating real-time updates for customers, promoting transparency and trust. Accuracy and error reduction: WMS and OMS systems minimize operational errors, ensuring the correct products are sent to the right customers, ensuring greater accuracy in processes, reducing costs related to returns and replacements. Even so, when reverse logistics is necessary, the software offers full support so that the procedure can be carried out without bureaucracy or hitches. Optimized routing: OMS facilitates optimized routing of orders, selecting the best route for delivery, considering factors such as traffic, distance, and customer priorities. The strategic combination of WMS and OMS systems offers advanced technical solutions to overcome last mile challenges. By integrating the software, companies can tackle last mile challenges with greater agility, operational efficiency, and customer satisfaction, ensuring faster and more reliable deliveries. Deagor Solutions With innovative warehouse management (WMS) and order management (OMS) solutions, Deagor not only offers answers to last mile challenges but also creates opportunities for companies to reach new levels of logistical excellence. By choosing Deagor, you invest in advanced technological resources, ensuring sustainable growth and continuous optimization of your supply chain. Increase efficiency, reliability, and customer satisfaction! Deagor is the ideal partner to drive success and evolution for companies in the dynamic scenario of modern commerce and last mile challenges. Contact us and schedule a free demonstration of our solutions. Challenges of the Last Mile: How to Overcome Them and Deliver a Perfect Customer Experience Deagor WMS per ecommerce può aiutarti!