28 May The stakes of last mile logistics
The “last mile” is an expression that has taken on a whole new meaning with the rise of e-commerce. E-commerce has contributed to the increase in home deliveries and shorter delivery times.
This has quickly become a major headache for companies offering transportation services, who are competing fiercely to find ever faster and more efficient ways to deliver.
However, we are still far from meeting all the challenges that lie ahead.
What is last mile logistics?
Last mile logistics is the final step in the delivery process. It starts at the distribution center and ends when the delivery is successfully completed. The “last mile” is more an expression than an actual measure of distance and the final stage of delivery can be as much as several hundred miles long. Our LTL transportation service between Canada and the United States is no exception!
A crucial logistical step for the transport company
The last mile is currently considered to be the most important element in the logistics and supply chain. The main objective is to deliver the package as quickly as possible. This is the key to customer satisfaction.
It is also the longest and most expensive part of the entire shipping process. When done properly, it can save a lot of time and money, which can make a company efficient, profitable and reputable.
Unique obstacles to each delivery
All last mile deliveries are unique. Some involve crossing borders and meeting specific international standards. In this case, the goods are usually handled by professional truck drivers. Other deliveries are much shorter but require navigating through a crowded city that is difficult to get through. Most of the time, a home delivery service is then hired.
Managing the last mile in response to logistical, economic and environmental challenges
The “last mile” is a very important part of road transport at all levels. It accounts for more than 20% of total logistics costs and represents nearly 20% of urban traffic.
All of which offers the road sector a large number of areas for improvement, whether economic, logistical or environmental.
The increasing number of delivery points: a major challenge
E-commerce has led to an explosion in home delivery with its focus on customer satisfaction. The change in our modes of consumption has had the direct consequence of increasing the number of points of sale. Customers are no longer only interested in getting the products they want, they also want them delivered directly to their homes, to their work or even to pickup points, which is much less time-consuming for them.
These developments have led to a densification of traffic in cities, with urban goods transport now accounting for nearly 20% of total urban traffic, or one vehicle in five. In addition to the increase in the number of vehicles on motorways, this consumption trend is changing the jobs in the road transport industry, which are held together by performance objectives and an increase in the number of journeys to be made.
Under these conditions, we can better understand why last mile logistics is a major challenge for the transportation sector in the 21st century. We can therefore expect a major revolution in this field.
Last mile logistics in the face of environmental challenges
How could we not address the environment when it comes to the transportation sector? Urban traffic congestion leads to very negative externalities for the environment. Delivery of goods in urban areas today accounts for the bulk of greenhouse gas emissions and this is mainly due to sub-optimal management of the “last mile”. According to an ADEME report, the rate of empty kilometers traveled by delivery trucks exceeds 25% and the fill rate rarely exceeds 67%.
Reducing travel times, optimizing routes, vehicle speeds and load distribution are all levers that can significantly improve the sector’s performance, while certain actions can limit the environmental impact of transport operators.
The challenges of last mile logistics: a powerful economic lever
The “last mile” alone accounts for more than 20% of the total cost of the value chain.
Optimizing the logistics is therefore a powerful lever for economic growth.
Home delivery is a market that has jumped by more than 30% since 2010. The package business is expected to slightly exceed $5 billion in sales this year, which is something that is sure to attract newcomers to an already highly competitive market. Remember that giants such as UPS or FEDEX have been around for a while and each have several billion packages delivered worldwide.
As a result, carriers that can fully optimize all segments of their distribution chain will be able to stand out from those that simply rely on their strengths.
Manage your last mile with Transport Econo Nord
The next few years will be a time of major changes in the transportation sector, with the era of the digital truck, for example, which could see the light of day around 2030.
In the meantime, last mile logistics should already be the focus of attention for retailers and transporters, who have to master this stage and understand the stakes if they want to stay in the race.
At Transport Econo Nord, we put our expertise at the service of our customers every day. Contact us if you are interested in organizing your logistics with our team of experts.