The rapid acceleration of digital transformation in businesses is most evident in the delivery solutions it provides to customers. Not only are businesses shifting to online when it comes to receiving and processing orders, there is also a shift in terms of consumer shopping behaviors online. There was a time when a 5-7 days waiting period for delivery was considered the norm. Nowadays, a delay of a day or two in delivery is already a significant issue that can put you at a disadvantage from your competition.
Last mile delivery emerges as a plausible solution in overcoming this problem. However, it is not without its own sets of challenges.
Challenges of Last Mile Delivery
This is a breakdown of the common challenges that businesses face when implementing last mile delivery solutions to their customers. You can also find recommended solutions to overcome each of these challenges.
1. High Cost of Last Mile Delivery
The cost of last mile delivery services is not cheap. In fact, it accounts for 28% of the total cost of the delivery. This can put business owners in a pickle, especially when you consider the high expectations that customers have set on same-day delivery. This type of delivery service is growing in demand and some shoppers even expect businesses to offer them – not just an option.
This can put a strain on a business’ budget, especially when you consider the level of demand in the market. For example, the holiday season brings about a higher volume of orders. The huge sales can compensate for the added costs of last mile delivery. What happens during the slow shopping season? Are the sales enough to compensate for the costs of the delivery?
One of the best ways to overcome the cost challenges of last mile delivery is through route optimization. When you hire drivers to deliver your goods, they often rely on their knowledge of the area to develop an efficient route. However, they might not be prepared for real-time issues that can cause delay and inefficiency to the delivery service, such as road accidents or natural calamities.
The use of route planning tools can overcome this issue. Efficient route planning can be achieved in real-time so that any unforeseen events can be taken into account.
Automated order batching is another plausible solution to minimize costs associated with last mile delivery. This tool uses a unique algorithm that matches rider requests based on a specific location. This maximizes every delivery route to increase goods delivered and to generate a surge in profits.
2. Late Deliveries
As the consumer behavior has changed when it comes to shopping, so has their expectations of delivery services. E-commerce businesses have adopted their services to handle a large volume of orders, but delivery services are not quite up to that level yet.
Issues such as late deliveries can definitely impact your business’ profit margins. This rapidly changing consumer behavior towards deliveries is the main driving force behind last mile delivery solutions. There is a push towards higher efficiency to ensure that goods are delivered on time.
Technology is a crucial aspect of the solution. With the use of technology, it facilitates real-time and fast dispatching of orders. The orders are handled by the right person and at the right time. There are no delays in between each step of the delivery process. This results in an overall improved efficiency of last mile delivery and greatly reduces total delivery times.
If you are encountering common delivery issues such as late deliveries or wrong deliveries, it is time to look at your suite of technology. You might need to upgrade into a better technological solution that would bring about higher efficiency.
3. Lack of Transparency
Transparency is an important aspect of the delivery process, especially if you want to promote customer loyalty. When people order something from your business, they want to know exactly where their product is at any given time. It also helps them to keep track of their orders so they can anticipate when it will arrive.
Unfortunately, there is not enough of this with most last mile delivery solutions available these days. It is a norm for businesses to assign a tracking code to their customers so they can check the movement of their item/s. But some codes are not as detailed as they ought to be. Customers now demand real-time information when tracking packages.
If you want to improve transparency of your delivery service, you need to consider utilizing software that offers this particular feature. It will give customers more confidence about their orders when they can track its movement.
4. Adhering to Timeline
Delivery timelines can pose additional challenges to companies offering last mile delivery. Missing your delivery timeline can be very costly for companies and it can eat away your profit margin.
For example, there are food delivery services that do not charge their customers when they fail to deliver the orders within the agreed time frame. In fact, some customers cancel their orders or refuse to pay for orders that arrive beyond the expected time of delivery.
According to this report, customers don’t mind paying 33% if it meant getting a faster delivery service. This is a very important statistic as it emphasizes the value placed by customers on on-time delivery.
It is an additional weight on the companies’ shoulders because there are a lot of variables involved in the delivery process. Your ability to predict and overcome these unforeseen circumstances to meet your delivery timeline can be achieved with an efficient route planning software. With this tool, you can optimize routes as you go so as to avoid potential delays while making deliveries.
In fact, it is believed that 40 minutes is the longest that customers will wait for an order, in the case of restaurant deliveries. The longer it takes to deliver their orders, the higher the possibility that the customer will cancel or refuse the order.
Last mile delivery is a significant component of any business offering delivery services to their customers. The only way to overcome these challenges and to survive is to streamline the delivery process. Technological intervention, such as in the case of route management software, can help with these problems since you can auto-allocate deliveries, offer real-time tracking, and enjoy dynamic route planning.