Managing last mile delivery with IoT

What is last mile delivery?

Last mile delivery is the final step in a delivery process that ensures that goods reach the end user.

It is worth noting that around 53% of the cost of shipment is spent in last mile delivery. While companies bear around 25%, the rest is borne by the end customer. Usually, execution of last mile delivery involves small parcel shippers in a range of 50 to 100 miles. Studies estimate that parcel shipments will continue to grow and could double in the next 10 years.

What concerns do companies have?

Now that you understand what we mean by last mile delivery, let's dig deeper and try to understand some of the many challenges companies must overcome to decide the optimal strategy to implement an efficient last mile delivery process.

Urban deliveries are always challenging due to traffic, parking regulations, and adverse weather conditions. Product complexity is another problem, especially for high-value or specialty products. Driver shortage and capacity crunch are the other hurdles, especially for North America. The retailers and shippers have their job cut out to be able to provide a superior customer experience and enhance brand loyalty.

How are companies tackling the challenges?

In a desperate effort to control costs and positively impact end customer’s experience, companies are increasingly insourcing last mile logistics.

Some of the key aspects of this shift include:

• Providing product specific delivery timelines options ranging from a few days, the same day or even just a few hours to the end customers. Our research shows that many customers are willing to pay up to 20% extra for faster deliveries.
• Organizing pick-up locations where customers can collect their orders at their convenience.
• Adopting smart IoT technologies to track vehicles and packages in real time. Live data is collected, harnessed, and analyzed carefully to provide auto-generated communication to relevant stakeholders.

Solution

IoT-enabled logistics solution key to last mile delivery

Effective last mile logistics allow shippers to get more products to end users on time. Promising trends emerging in this space include delivery lockers, and delivery by drones. IoT adoption remains key contributor to the success of such initiatives.

• Artificial intelligence and machine learning based route planning and optimization help the logistics officer to take quick decisions.
• Real-time data insights help planners and dispatchers automate and manage the delivery window, fleet and load, while accounting for weather conditions and traffic constraints in real time.
• Accurate ETAs and advanced delay alerts enhance the end customer experience.
• Electronic proof of delivery captures the exact coordinates of order fulfillment and ensures that the shipment has reached the right recipient.

IoT solutions, such as TCS DigiFleet^TM, provide real-time actionable insights to enable companies address dynamic requirements of route scheduling to deliver on time. Predictive engines go one step further they factor in possible delays to provide accurate delivery ETAs and updates. The level of inventory optimization is also going to impact last mile delivery.

The landscape of last mile delivery is set to change dramatically in the near future. Find out more about how to ride the change and transform the last mile delivery to ensure superior customer experience.