Imagine you've just ordered your favorite watch online. But when the delivery date comes, your order is nowhere to be found. You check the tracking information and see that they've been delayed. You try to contact customer service, but you can't get through. Finally, your shoes arrive, but they're damaged in the box. You're disappointed and frustrated and less likely to shop with that business again.
This is just one example of how a poor last-mile delivery experience can impact customers. It is a critical touchpoint in logistics management and optimization, as it is often the most visible and impactful part of the customer experience.
However, it also constitutes a significant portion of the overall logistics costs. A study by Insider Intelligence has indicated that the last mile of delivery expenses accounts for around 53% of the overall cost of shipping. So, cutting down last-mile delivery costs while keeping it efficient is essential for business growth.
Why are last-mile deliveries costly?
The last mile of delivery presents varied, complex, and unique challenges that can all lead to increased logistics costs. Delivery delays can result in missed delivery windows, additional fuel expenses, and underproductive delivery drivers, all of which raise the entire delivery cost. Some major last-mile of delivery expenses include the following:
How to make last-mile delivery efficient
Last-mile delivery can be made efficient by adopting some innovative strategies, including:
Improve first attempt delivery rate (FADR)
FADR has become an essential metric for measuring business success in today's fast-paced world. Improved FADR can save costs associated with multiple deliveries, storing products, and managing staff. Businesses can use AI-powered solutions like Mojro to deliver accurately and efficiently.
Reducing fuel expenses
Fuel prices are continuously rising and are a big part of rising logistics costs. Businesses can considerably reduce last-mile costs by decreasing their fuel consumption. This can be achieved through route planning and optimization to ensure that the most deliveries are accomplished for a particular amount of fuel. Mojro's "Last-Mile Delivery Automation" solution enables managers to plan optimum route using a real-time geo-resolver, ensuring on-time deliveries and reduced costs.
Eliminate failed or delayed deliveries
Missed or failed deliveries can not only increase costs but reduce customer satisfaction as well. The "Last-Mile Delivery Automation" solution of Mojro offers a control tower with real-time tracking capabilities that can update managers on on-ground conditions. This will alert the managers of possible delivery delays, empowering them to make swift re-routing decisions.
Adopt advanced planning techniques
Lack of flexibility in planning and executing last-mile deliveries leads to excess costs. The daily dynamic planning offered by Mojro's "Last-Mile Delivery Automation" solution helps businesses make cluster deliveries based on locations. Managers can also make time slots flexible and ensure maximum adherence to time windows using this solution, reducing costs. Mojro's solutions for new-age logistics challenges, like continuous planning, can help managers handle the constant influx of orders while maintaining operational efficiencies. The AI and MI-powered solutions from Mojro can offer real-time visibility into logistics processes, enabling businesses to make swift decisions based on on-ground conditions, enhancing efficiency, and reducing costs.
Efficient last-mile delivery is a crucial aspect of modern logistics, and cutting down costs while maintaining high-quality service requires a strategic and holistic approach. By embracing advanced solutions like Mojro, businesses can balance cost-effectiveness and customer satisfaction for their last-mile operations.