Tony Hines explains why last mile delivery has become such a hot topic to achieve a competitive advantage.
Last mile logistics refers to the final stage in the delivery process. It's the final step in the chain where the goods or the services move from the hub or a warehouse facility to the end user which maybe a customer or a consumer, So it could be a business to business transaction or it could be a retail transaction direct to consumer. Potentially it's the most critical stage of the process. It's the stage by which customers and consumers judge customer service experience. It can be expensive, it can be complex, and the last mile might be just a few blocks away, or it could be 50 or 100 miles, depending on the location of the customer. It's simply a term for the final stage in any delivery process moving from the point of the final hub depot. through to the customer.
The focus of course from the supply chain point of view, those operating the logistics for the last mile is to deliver items to the end user as quickly as possible without delay at the lowest possible cost The boastful Amazon promise, if you're a prime customer, they'll get something to you. If you order in the morning, they promise to get it to you by the evening. Next day, delivery services have become a standard, particularly for non food items and next hour delivery is now being trialled in a number of places. The growth of the Internet and online shopping has, of course, forced dramatic change in this part of the supply chain system.
Parcel deliveries now have to be extremely efficient. Back in 2017 pre pandemic there were some 3.2 billion parcels shipped in the United Kingdom alone, and an 8.2% year on year increase. This shows a rise of around 65% since 2012. As I said, the last mile logistics can be very complex and they can be costly. Customers now demand more timely deliveries and they want the goods almost as soon as they've purchased them.
They want to know that they're on the way and they want to know that they're going to come in good time. The problem of course is traffic congestion, which has increased consistently year on year and it has both negative impacts on the economy, the environment and of course people's health and well-being.
There are more rural delivery vans on the road and delivery motorcycles on the road than ever before, and they all lead to pollution. As demand for goods has increased, so too has demand for end to end, supply chain solutions. In the business to business situation, the sooner goods get delivered, the quicker the payments are made and the quicker profits arrive. Quick supply is very important in this part of the indu
About Tony Hines and the Chain Reaction Podcast – All About Supply Chain Advantage
I have been researching and writing about supply chains for over 25 years. I wrote my first book on supply chain strategies in the early 2000s. Each week we have special episodes on particular topics relating to supply chains. We have a weekly news round up every Saturday at 12 noon. All things impacting global supply chains in that week, so come and join us on the Chain Reaction podcast. I look forward to seeing you there.
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