BLOG: who runs the last mile?
Marathon runners who have reached the mark of 40 kilometers, have to do relatively little effort to make it to the finish. For distribution companies it is a different story: the last kilometer is by far the hardest and most expensive part of their trajectory.
The "last mile" in the distribution industry has always posed a problem. Large trucks entering a busy city center to supply two or three shops lose valuable time and carry a lot of air, which is hardly efficient and costs a lot of man hours as well as fuel.
According to calculations by Flanders Logistics, the average load factor of trucks and vans in Europe is barely 57 percent. No less than 24 percent of trucks run without a load.
The strong growth of e-commerce makes the last mile even more difficult. A growing number of consumer goods are delivered at homes and not in stores, which causes a lot of complications. Approximately 20 to 35 percent of consumers are absent when parcel suppliers ring their door bell, according to a study by UK’s Interactive Media in Retail Group.
Failed deliveries cause frustrations with customers and inefficiencies with carriers. In addition, carriers have to make more stops delivering one parcel at a time, which skyrockets their cost and contradicts efficiency.
The solution? City Depot is working on it. Not on our own, but together with various partners operating on our platform. Not on one solution, but a series of partial solutions. The challenge is great, but the need is even greater.
The (urban) logistics sector is undergoing a transformation from business-to-business to business-to-consumer, where different rules apply.
In order to guarantee fast and efficient deliveries logistics companies must adapt to the needs and availability of the consumer. A shop is usually open between 10 a.m. and 5 or 6 p.m., when most customers are not at home, thus requiring deliveries after office hours. Also various delivery options - to an alternative address, pick points that remain open late, or during self-selected time slots – will contribute substantially to customer satisfaction.
Deliveries are becoming more diverse, the same goes for the products being delivered. When consumers order a "premium” product online, they expect a "premium" delivery, and rightfully so. In other words, customer service is crucial. Drivers become the ambassadors of their employer as well as the retailer whose products they deliver. While the importance of premium distribution increases, so does the value of all logistics assets, ranging from warehouses and IT to employees. The end goal: deliver goods wherever and whenever the customer wants!
There is one important question we have not answered in this blog: how can we keep the cost of the last mile under control? That’s an issue we plan to discuss soon.