The last mile of any delivery is vital for ensuring a smooth transaction and a satisfied customer. Recently, consumers have requested more deliveries, faster. Because last mile delivery involves complex logistics, companies are struggling to meet the growing demand for the quick turnaround of goods.
Experts attribute this demand to the turmoil of 2020. Consumers turned to delivery out of necessity, then got used to its convenience. As of 2021, consumers made 58% of their purchases online, compared to just 32% in 2019, and the U.S. food delivery market has increased 204% in the past five years.
The final push that gets a package to a customer’s door affects their satisfaction and your bottom line. As deliveries increase, you may need to rethink your last mile logistics. This could be a major opportunity and a challenge for your last mile delivery fleet.
What is last mile delivery?
Last mile delivery is the final leg of a trip when a product goes from a transportation hub to its final destination. With consumer interest increasing for fast and same-day delivery, fleets must come up with unique solutions to efficiently complete this final, logistically challenging step of the delivery process.
What are last mile logistics?
Last mile logistics are the strategic decisions that go into a well-routed and efficient final mile delivery. By using technology for route planning, fleets can cut their delivery times and ensure they’re taking routes safe for drivers and optimized for a great customer experience. Last mile logistics mean making sure you have the right sized vehicles, correct upfit and a more centralized fleet.
Last mile delivery trends for 2021
The delivery industry has always been evolving, but the pandemic accelerated it beyond expert predictions. Here are some trends accompanying last mile delivery in 2021:
1. Restaurant deliveries move in-house
Third-party delivery systems such as Grubhub and Uber Eats have grown exponentially. However, they take longer, cost customers more and charge restaurants a higher commission than in-house delivery systems. Pizza parlors and other restaurants such as Panera and Jimmy John’s have their own fleets of delivery vehicles and drivers, and experts predict more restaurants will follow suit. When you control delivery logistics and work with an expert fleet partner, you can boost customer satisfaction.
2. More hubs allow for quicker deliveries
One-day delivery is no longer fast enough for today’s consumers. To complete the last mile delivery more quickly, e-commerce business leaders are opening delivery “hubs” in populous cities. A transportation hub serves as warehouse space for delivery drivers to pick up goods and take them to their final destination. Some companies rely on the gig economy for help in completing these runs. In a few cities, an Amazon Flex program allows non-Amazon employees to earn extra cash by using their personal vehicles to take packages the last mile.
3. Urban last-mile deliveries ideal for fleet electrification
Range is a non-issue for EV drivers in urban areas. An electric vehicle’s regenerative braking system, which recaptures kinetic energy during deceleration, is ideal for the stop waves of inner city traffic. Plus, with the current federal push to reduce carbon, many cities have updated infrastructure to support EV charging, ultimately resolvoing range anxiety. If you also consider the falling price of battery electric vehicles (BEVs) and their low cost to maintain, using BEVs in urban areas is a smart investment for fleet owners.
Large corporations are also driving the push for BEVs to lead last mile deliveries. Amazon contracted Rivian to produce 100,000 electric delivery vans by 2030 with the first 10,000 to be in route by the end of 2022.
Electrifying your last mile delivery fleet can result in:
Overall cost savings. The price gap between electric sedans and combustion engine sedans is narrowing rapidly. When you consider the total cost of ownership including depreciation, fuel and maintenance, BEVs are often a better fit and a smarter investment.
A green brand image. BEVs play a crucial role in cutting carbon. BEVs emit fewer pollutants that contribute to climate change than internal combustion engine (ICE) vehicles and avoid the environmental damage associated with drilling for oil.
A chance to lead by example. As more and more companies prioritize adopting BEVs, other companies will be inspired to join the movement. In turn, this will lead to lower BEV prices, more charging stations and cleaner air.
The role of vehicle health monitoring & telematics in last mile delivery
Fleets that complete last mile deliveries cannot afford downtime. You can avoid last mile logistics issues by using vehicle health monitoring and telematics.
Transparency and insight into driver behavior and vehicle health will allow you to adopt processes and controls that improve productivity and ensure driver safety. The technology put in place to monitor health and behavior should be available to you at all hours, alerting you of issues in real time.
However, telematics or vehicle health monitoring technology alone does not get the job done. A skilled fleet partner will turn vehicle data into actionable solutions to help you with vehicle forecasting, maintenance management and replacement cycles.
Here are a few scenarios of how a proactive fleet partner might turn telematics data into actionable solutions:
1. Problem: Your vehicles are breaking down on the last mile, and the costs of major repairs are exponential.
Strategy: Using a vehicle health monitoring system, you set up proactive alerts for drivers when vehicles need preventive maintenance.
Solution: Your drivers receive alerts for services such as oil changes and tune-ups. Drivers are accountable for the servicing and work it into their route.
Result: When vehicles are well-maintained, they are reliable, consistently delivering in a timely manner — and therefore maintaining the expected level of customer service.
2. Problem: Your drivers’ routes are taking longer than expected and they are missing their promised delivery times.
Strategy: With vehicle behavior monitoring, you’ll receive alerts whenever your drivers exceed the number of stops, distance or time you have authorized.
Solution: The transparency of this vehicle data empowers the operations manager to make adjustments to maximize productivity.
Result: When you make good driver behavior a priority, you have a more skilled set of drivers. In turn, you preserve a set of great drivers and customers who want to continue to do business with you.
3. Problem: Your vehicles’ mileage is increasing and you know it’s only a matter of time before they break down.
Strategy: By working with a fleet partner to develop a vehicle life cycle strategy, you avoid breakdowns and gain a more predictable expense stream.
Solution: You can track which vehicles are incurring the most repairs once they hit a certain mileage, then make decisions about when to cycle in new vehicles.
Result: Your brand gets a refreshed image, and you’ll likely see better driver retention as they take pride in their new vehicle. Plus, ordering replacement vehicles ahead of time reduces acquisition costs and the risks of the vehicle not being available.
Last mile delivery logistics can be especially difficult without expert help. A best-in-class fleet management partner will know how to successfully handle last mile deliveries. Often, they will have a vehicle health monitoring system to help with maintenance management and route planning. A great fleet partner will also come with acquisition strategies to ensure you have the ability to customize services to meet your goals.
Originally posted on Automotive Fleet