The e-commerce industry will grow to $2.4 trillion in 2018. With this growth comes increased pressure to get goods to consumers faster.
Companies now compete to provide the fastest shipping for the cheapest price. This need has driven last mile delivery companies to provide competitive solutions.
How did this service get started? How can we expect the industry to develop in the future? We take a look at the state of final mile logistics past, present, and future.
What Is Last Mile Delivery
Final mile delivery is the transport of shipments from a logistics hub to the final destination. Usually, the final destination is a residential home.
This final phase of distribution has traditionally been the most complicated and expensive. Carriers cannot consolidate well as each shipment goes to an individual home.
The struggle arises when a shipment shows “out for delivery” for a long period of time. The consumer waits while the delivery truck makes many stops.
Origin of Final Mile Services
Shipping packages began with the California gold rush. People needed a way to send gold and money back home.
Packages would travel on the transcontinental railroad. Then they would get stored at the nearest train station. Recipients would then have to go to the station to collect their packages.
Home delivery services of packages began in the early 1900s. Services like USPS and American Messenger Company began offering home delivery services. Today we know the American Messenger Company as UPS.
This led to the growth in popularity of catalog services. The rise of automobiles allowed for delivery companies to consolidate their shipments.
The increased popularity of catalog orders created greater demand for delivery services. Delivery services responded by creating better infrastructures.
By the 1970s UPS had a national network of delivery vehicles. This made shipping services faster as packages moved through the logistics system.
Last Mile Delivery Companies Today
Today e-commerce drives the final mile industry. As consumers shop online, retailers compete to get their goods to consumers faster.
This has driven many couriers to offer one day and same day shipping services. The key to this kind of service is putting locations closer to the customer.
This has led to an increase in competition for commercial real estate. The drive to be closer has also led to “final mile” turning into “final inch” deliveries.
Many couriers offer white glove delivery services. This service brings deliveries into the home and sometimes unpacks them.
Robots do the bulk of the work when it comes to picking, pulling, and packaging product for delivery. This automation reduces delivery time and expense.
The Future of Last Mile Logistics
Companies like Amazon have led the way in innovation for the improvement of final mile logistics. Drones are the most popular concept for delivery automation and faster fulfillment.
A quick search through patent filings and one will find beehive style housing for drones. Another idea is a blimp style home base warehouse to end the need for commercial real estate.
Another patent by Amazon shows the use of the shipping label as a parachute. This would let the drone drop the package and never need to land.
Another developing concept is better inventory management. Amazon hopes to stock nearby warehouses with items consumers are most likely to order.
The idea is to perform the bulk of the transport before the consumer buys the product. This way the product gets to the consumer faster once ordered.
An example of this would be shipping hurricane supplies to their warehouses in Florida for hurricane season. If a hurricane doesn’t come, the retailer would then discount the item until they sell.
The key to success with this plan is having warehouses strategically placed nearby. This lets the retail do the bulk of shipping in advance.
Final Inch Deliveries
Some companies look to further final mile from doorstep delivery. This includes delivering groceries straight to a customer’s fridge.
This sort of delivery into the home is still in the testing phases. Companies are still determining consumer response to this sort of service.
Some companies are following Uber’s example and using crowd sourcing for their logistics. Shippers post delivery jobs on an app, then drivers pick up available gigs.
This removes the need to maintain a fleet of trucks. It also reduces delivery times as drivers are familiar with the roads and traffic flow.
Instant Tracking Capabilities
Many shippers are turning to constant tracking instead of faster shipping. This lets consumer get instant real-time updates of every move their shipment makes.
Consumers can choose from SMS notifications, emails, or Google alerts. This kind of notification system satisfies the majority of people who want shipping they can depend on.
Analytics Will Help Create Detailed Strategies
Analytics is king these days, and it’s no different for logistics. Smart technology applied to automated shipping systems creates an immense amount of data.
This data can then help isolate the factors creating the highest impact on costs. Logistics companies can then tweak and adjust their strategies to refine their expenses.
This will result in last mile delivery costs getting reduced. As costs sink, more consumers will choose services like same day delivery.
Final Mile Logistics
Final mile delivery developed when people began to ship more than gold and money. As retail companies grew their catalog businesses, couriers expanded their delivery networks.
Today, last mile delivery companies networks that allow them to merge shipments. This lets them economically and quickly deliver packages to their final destination.
Proximity is king today with distribution companies vying to be as close to customers as possible. Retail companies compete to deliver packages as fast as possible to consumers.
Many retail companies are looking to automate the final mile delivery process. The future of final mile logistics is the technology of drones and robots to end the need for people and vehicles.
Let us provide a quote for our last mile solutions today.