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Last Mile Delivery

Last mile delivery refers to the transportation of goods from distribution centers to customers' doors, representing over 53% of total shipping costs. It poses significant challenges due to factors like lower average speeds, more stops, failed deliveries, and high return rates, leading to increased operating costs and diminished profits. Companies affected include third-party logistics, direct-to-consumer retailers, food delivery services, and e-commerce businesses.

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32 views3 pages

Last Mile Delivery

Last mile delivery refers to the transportation of goods from distribution centers to customers' doors, representing over 53% of total shipping costs. It poses significant challenges due to factors like lower average speeds, more stops, failed deliveries, and high return rates, leading to increased operating costs and diminished profits. Companies affected include third-party logistics, direct-to-consumer retailers, food delivery services, and e-commerce businesses.

Uploaded by

esmail mitwaly
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Last mile delivery

What is last mile delivery?


Last mile delivery, also known as last mile logistics, is the transportation
of goods from the distribution center to the final delivery destination -
the customer's door. The goal of last mile delivery logistics is to deliver
packages at affordable prices, as quickly and accurately as possible.

But it is not easy.

The last mile of your product delivery represents over 53% of your total
shipping costs.
If you don't improve your process, inefficiencies can lead to high costs -
driving your overheads through the roof and lowering your business
profits.

What companies are affected by the last mile delivery problem?


By definition, last mile delivery is convenient for companies that
provide products directly to their consumers.
 Third-party logistics companies
 Typical direct-to-consumer retail businesses
 food delivery companies
 E-Commerce
Why is last mile delivery so expensive?

Delivering thousands of packages to their final destination every day is


a complex logistical challenge. Fulfilling the last mile is complicated,
and many factors contribute to the total cost

1.Lower average speeds = more time on the


road, fewer miles per gallon
The need to decelerate, stop and accelerate at fast intervals has a
significant impact on both average speeds and fuel efficiency.
So, drivers not only have to spend more time on the road to cover the
same distance, but also cost you more gas

2.more stops lead to more idling and downtime


On average, a delivery truck uses 0.84 gallons per hour when idling. In
addition, you still have to pay delivery drivers regardless of whether
they are standing still or moving

3.Failed deliveries
When you're delivering products to the end customer, failed deliveries are a big
part of the equation.
There are a number of reasons why this is such a big problem:
• The customer does not expect delivery.
• The customer is not at home because of the late delivery.
• There are no options for scheduling delivery.
• Wrong address of the customer.
4.Returns, refunds or discounts
The average rate of return for e-commerce products is 20%,
which makes achieving e-commerce a special challenge. If you
sell consumer products online, you can expect at least one in
five customers to send their purchased product back, either for
a refund or for a different item (you'll have to deliver it for free)

The real commercial impact of the last mile


delivery problem
 Higher operating costs and lower profit margins
 Bad customer experience and little brand loyalty
 More cancellations and returns

Reference:
https://optimoroute.com/last-mile-delivery/#:~:text=Last%20mile%20delivery%20is%20the
%20final%20logistics%20stage,from%20delivery%20hubs%20directly%20to%20the
%20customer%E2%80%99s%20door.

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