Last-mile delivery is the key customer satisfaction driver in a logistics and supply chain business. It directly impacts profitability as it is the most time consuming, expensive, and unpredictable part of the entire process. Tight delivery schedules, varying fuel costs, and limited control over delivery teams make managing last-mile delivery complex.
Challenges faced by last-mile logistics and delivery businesses
1. Managing delayed deliveries: Late deliveries ruin your customer experience and lead to loss of revenue. A minute delay in timelines can lead to dissatisfaction at the customer end and involve rescheduling for your business as well. Managing offended customers and re-planning deliveries would exhaust a significant amount of time, resources, and capital of your business.
2. Cutting down last-mile delivery costs: Rapidly increasing competition and evolving customer expectations have made last-mile delivery cost-intensive for logistics operators. A research report by Capgemini suggests last-mile services account for 41% of supply chain costs. Offering competitive delivery charges or completely waiving them off is becoming the new norm to keep up against the competition. Customers are expecting faster deliveries, which pushes costs higher making maintaining profitability tougher.
3. Optimizing delivery density: Managing delivery workloads becomes complicated due to fluctuating order numbers. While logistics companies are tackling the influx of deliveries during festive or discount seasons, they also have to work upon generating revenues during times of sporadic ordering. Irrespective of these supply chain complications, customers expect orders to be delivered within timelines and as per their convenience. Research reports suggest 90% of buyers track the status of their packages and expect delivery as per their schedule, making dynamic scheduling a necessity for delivery companies.
4. Handling customer disputes: False claims of non-delivery and late delivery can harm your reputation and involve unaccounted expenses on customer support. Dissatisfied customers may raise fake concerns over social media, which would taint your brand image and business. Online reviews matter to your prospects, as only 48% of them would consider investing in a business with a rating below 4 stars. It requires you to spend time and money on clarifications and grievance redressal.
Offer frictionless experience through route optimization software
Seamlessly fulfilling last-mile deliveries is not simple, but technology can help you overcome the associated challenges and meet customer expectations on delivery timelines. Route optimization software works effectively to enhance the productivity of your supply chain and offer a great customer experience. It helps you in the following ways:
1. Reduce costs: Using AI-backed advanced route optimizing software solutions helps you to plan, schedule, and re-route efficiently. Pre-planning your delivery schedule helps you to minimize travel time and fuel costs from one customer address to the next. Dynamic re-routing allows you to utilize time windows effectively, prioritize deliveries, and communicate route modifications to drivers in real-time.
2. Boost efficiency: Reduce operating costs by cutting down fuel costs and monitoring driver performance through a route optimization solution custom-made for your business. Using multi-stop route planning helps you save time from manually charting routes and calculating fuel expenses. The software picks the shortest and fastest routes so you deliver more in less time and optimize fuel consumption, reducing your carbon footprint.
3. Offer transparency: Route optimization software built for last-mile delivery comes with real-time tracking and in-built digital delivery receipts. It allows customers to select their preferred time slots for delivery and alternate delivery locations. They can be apprised of package status and accurate delivery timings. With real-time driver monitoring, you can keep track of each item and avoid fraudulent activities.
4. Reroute and reschedule quickly: Route planning and scheduling are important for all logistics businesses. You may have to reroute delivery orders due to unprecedented conditions such as traffic, road conditions, sudden weather change, address discrepancy, and fulfilling emergency deliveries. Route optimization software will help in faster rescheduling and swift communication with drivers to maintain delivery rate within time windows.
Route optimization technology is a delivery innovation to empower supply chain businesses offering last-mile deliveries. It offers end-to-end visibility throughout the delivery process and even managing returns. Leveraging technology helps you optimize your last-mile operations and scale your business by automating route planning and delivery management processes while offering a top-notch customer experience.