Logistics has always been a complex process of moving goods, such as warehousing and transportation, from their point of origin to the point of consumption based on customer-specific needs. Therefore, logistics companies have to handle intricate systems that require a high degree of coordination in acquiring, storing and transporting goods and resources on a global scale. Just as Traditional logistics companies were dealing with volumetric deliveries and covering large distances, the sudden boom of last-mile logistics and changing consumer behaviour has posed the question for logistics giants to concentrate on the final leg of delivery in a better way.
A recent report by RationalStat states that Global Last Mile Delivery Market is valued at US$ 79.9 billion in 2023 and is expected to grow at a significant CAGR of over 8.1% over the forecast period of 2023-2030. While another report by Technavio states that the last mile delivery market size is expected to grow by USD 165.6 billion from 2022 and 2027 and estimates the growth momentum to progress at a CAGR of 15.62% during forecast period.
Big logistics players can outsource their last-mile burden to make a vast difference in their delivery performance. Last-mile delivery logistics is a way to move goods from a transportation hub to the final destination or the customer’s hands. Last-mile delivery logistics mainly involve the use of small carriers to deliver products to a customer’s doorstep and its only goal is to deliver the product as fast as possible.
During the Covid-19 pandemic, the significance of logistics became all the more important because of safety concerns and restrictions and increased the dependency of businesses on logistics companies exponentially. Overcoming multiple challenges, logistics companies are still ensuring timely deliveries, even to the remotest destinations and continuing operations amid supply chain disruptions to meet the growing demands even after the scourge.
Planning & Execution of logistics
Each and every aspect of the logistics process—from packaging to transportation, inventory management and warehousing—requires seamless functioning and is linked with each other. The entire process functions as a relay team to ensure coordination between each of them. Moreover, today’s customers expect fast delivery. They look for either same-day delivery, or a maximum of two- to three-day delivery.
Outsourcing the last-mile burden
Contract logistics is basically the outsourcing of resource management jobs, such as supply chain operations, to a third-party logistics company. Contract logistics companies handle such activities as designing and planning supply chains, designing facilities, storage and warehousing, transportation and distribution of goods, processing orders and collecting payments, managing inventory and even providing certain customer service aspects under a contractual agreement.
The key objective of contract logistics is optimising customer’s supply chain operations, reduce costs and enhance overall efficiency. Contract logistics providers bring expertise and resources to the table, such as advanced technology, specialised equipment and experienced personnel, allowing their clients to focus on their core business activities while outsourcing the logistics management.
Managing Director
Borzo India and Regional Director
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A McKinsey reports says the cost of global parcel delivery, apart from pickup, line-haul and sorting, amounts to €70 billion, with China, Germany and the US accounting for over 40 per cent of the market. Besides, a number of movers of different sizes say that last-mile logistics is the key to driving more growth and profits. So, last-mile delivery logistics solution is on the rise for every supply chain business.
Rise of last-mile delivery players
At present, last mile logistics is one of the hottest trends in moving goods. Today, consumers are ready to pay even double the money for such last-mile delivery services as same-day or one-day delivery. Many big e-commerce players and last-mile delivery startups are major differentiators. It is, basically, the logistics options and the quality of service that influence the decision of online customers and affect e-commerce players directly.
Streamlining last-mile delivery
Nowadays, last-mile delivery is the most important and expensive part of any business, especially those in e-commerce. The way last-mile delivery companies earn more revenues from this process at less cost is by streamlining this phase. Certain ways to streamline include…
- Adopting advanced technological tools for last-mile delivery can be one good approach. For instance, introducing delivery drones and e-wallet payment methods can ensure more success through faster deliveries. GPS in every delivery vehicle and saving data of previous routes to delivery destinations in a central system can reduce delivery time. These, in turn, ensure customer satisfaction and loyalty.
- Another approach for last-mile companies can be increase in number of warehouses. More warehouses in an area will ensure less time for delivering products. These can also include centers or physical stores from where customers can pick up products after ordering a product.
- The best way to streamline the process is by measuring every delivery performance on a daily basis. If a delivery goes wrong, there will be records to understand the factors that have caused the error. This will help both parties get in sync to avoid the same errors from recurring.
The Landscape of logistics demands a strategic shift for traditional players. The emphasis on last-mile delivery solutions has been accelerated due to the changing consumer behaviour of wanting everything ‘fast’ and at their desired time slot. Outsourcing through contract logistics, embracing advanced technologies, and prioritising customer satisfaction are key avenues for success in this dynamic industry. As last-mile delivery continues to be a crucial differentiator, logistics companies must not only meet but exceed the rising expectations of consumers. Additionally, in today’s ‘Quick commerce’ world of modern logistics, businesses are constantly looking for newer ways to streamline their operations, improve efficiency and lower their environmental impacts.
