All About Last Mile Delivery

Companies rely on transit services to safely get their products and goods to the consumer in a timely and efficient manner. With this process, each step is critical to ensure that this happens each time an order goes out.

• First Mile – The manufacturer distributes the product or good. 
• Middle Mile - This stage can vary, depending on the type of load – international or domestic. International loads would need to go through customs, storage, and further transport before it reaches the local courier service. With domestic loads, some of the previous steps mentioned would not apply. 
• Last Mile – This mile involves the products or goods being transported locally via a warehouse or distribution center, directly to the customer. 

The final step is generally referred to as the Last Mile Delivery, or LMD. 

What is Last Mile Delivery?

The Last Mile Delivery is the crucial step where the products or goods reach their destination in transport. With the prevalence of e-commerce, Last Mile Delivery has become increasingly important for companies to satisfy customers. Here’s a brief look at what a general last mile delivery process looks like:

Steps of a Last Mile Deliver Process

1. Orders are placed by the consumer into the manufacturer’s digital system. Digital systems communicate with both consumers and manufacturers. 
2. Manufacturer ships products to warehouses or distribution centers. This step is the beginning of the Last Mile Delivery. 
3. Product is given to designated courier based on locale or route. 
4. Courier scans and loads products onto vehicles for final transport. 
5. The product is delivered to the consumer, where proof of delivery is given.

Types of Last Mile Delivery

There are three common types of Last Mile Delivery, they consist of:

Retailers

Popular retailers such as Walmart, Amazon, and Target (Shipt) have invested in their own end-to-end infrastructure.

Delivery Intermediaries

Third-party companies such as Fed Ex, UPS, and USPS (depends if available based on zip code) offer same-day delivery services by charging retailers for a commission fee.

Quick Commerce

Also known as Q-Commerce, it is an on-demand type of delivery service where consumers can receive products within an hour or so of placing their order. This rose during the recent pandemic but has since slowed down. Services such as Instacart, Walmart, and many more continue to provide this specialized service at the convenience of the consumer.

Rise of Last Mile Delivery

While not a new concept, Last Mile Delivery has risen in recent years. For example, with retailers offering free 2–3-day shipping, it minimizes the costs associated with Last Mile Delivery and allows them to remain competitive.

In addition, the expansion of fulfillment centers has made it easier for consumers to get products quicker by offering cheaper shipping options such as ground versus air.

Lastly, with advancements in technology, retailers can use the Last Mile Delivery information to track their inventory and view purchasing habits of consumers. Consumers are also able to get a transparent experience (tracking, alerts, etc.) throughout the delivery process from beginning to end.

Challenges & Inefficiencies with Last Mile Delivery

The Last Mile Delivery is the most expensive part of retail logistics. Because of this, any challenges, inefficiencies, or constant mishaps can affect businesses that deliver directly to consumers.

Travel Times Increasing

With the rise in online shopping, couriers have a higher volume of stops on their routes leading to delays. Location is also a factor. Both rural and metro areas can have their own obstacles. Rural areas can have miles between each delivery, while metro areas can prolong deliveries with high traffic congestion.

Returns, Refunds or Exchanges

In the instances where a consumer needs to return, exchange, or obtain a refund can cause a challenge for businesses as the LMD accounts for a little over 50% of a shipment's cost.

Large and/or Heavy Packages

Hauling heavier products in and out of a delivery vehicle can be costly and time-consuming. While there would be two people on these loads, in some cases, there’s only one person available.

Last Mile Delivery Trends

While there are some challenges, companies are finding ways to combat them to streamline the services they offer such as:

Real-time Order Tracking

Consumers have the ability to get updates on their product from when it's received by the manufacturer, to when it ships, and when orders are delivered. Some businesses have also offered real-time alerts to consumers via email or mobile.

Utilizing Electric Vehicles (EVs)

Using electric vehicles has become popular for business as they look for more cost-efficient and eco-friendly ways to provide services. Most EV batteries last the duration of daily routes, have regenerative breaking and aren’t held to vehicle idling laws, saving companies more money.

Providing White Glove Services and Hybrid Fleet Options

Some businesses have gone beyond the LMD by also including services such as unpacking and assembling products for additional fees. This is either done directly from the business or through a third-party entity.

Also, businesses utilize third-party couriers to supplement in-house shortages.

Availability of Warehouses

Businesses have begun to build warehouses strategically closer to cities in order to better fulfill delivery routes.

Enterprise Fleet Management

Enterprise Fleet Management is a full-service fleet management company. We partner with some LMD companies for new vehicle acquisition, financing, risk management, fuel purchasing, license and titling, and maintenance management services. This frees up time for busy managers to focus on their core business responsibilities while also reducing the need for in-house administrative support.

We can consolidate billing with a detailed statement, to increase your administrative efficiency even further.

Our maintenance management programs provide oversight to control maintenance costs and to maximize uptime and asset utilization. Our Preferred Vendor network provides a variety of service locations that are familiar with fleet needs and processes, making your service experience smooth and efficient.

Because Enterprise Fleet Management’s parent company is Enterprise Mobility, we are uniquely positioned to provide replacement rentals through a single vendor. We offer a variety of trucks, cargo vans, and box vans that meet the needs of LMD fleets, whether as a replacement vehicle when a vehicle is in the shop or as a temporary, supplemental vehicle during peak delivery seasons.

We offer telematics solutions to support asset tracking, fuel efficiency, driver behavior, and route optimization, helping LMD fleets achieve safety, efficiency, and on-time deliveries.

We are a different kind of fleet management company because we offer local account managers who deliver personalized services. To discover the Enterprise difference, contact your local account team at Enterprise Fleet Management Offices & Fleet Maintenance Near You.