Last mile logistics is that final segment in the logistics network where finished goods are transferred to the consumer or business that ordered and purchased them. It seems like an easy enough concept, but the devil, as usual, is in the details.
The term last mile logistics should perhaps have a trigger warning attached to it due to all the headaches it causes for supply chain managers. Many of you may be familiar with the convenience of last mile delivery regarding parcel shipping. However, the modern customer is beginning to demand this same level of convenience on a larger scale, such as large and bulky item transport.
What is the Last Mile Logistics?
Basically, the last mile refers to the movement of products or materials from the transportation hub to its final destination. This final part of the shipping journey is oftentimes the most inefficient and the most expensive.
E-commerce delivery is part of the last mile logistics that you may most be familiar with as a contemporary consumer. And if you live in an urban setting, you can easily see how last-mile delivery gets even more complicated quickly. The transportation of goods in cities, also known as urban logistics, requires finesse to cut through traffic and efficiently make deliveries in an impossibly dense market. The types of transportation that can be used in suburban or rural areas can’t always cut it in the city, thus forcing urban logistics providers to get even more creative.
Consider Amazon, according to their warehouse data, they receive 35 orders every second. That’s over a billion orders every year. It is impressive that Amazon can process all these orders at their warehouses and distribution centers but the true challenge is transporting every unique order directly to these customer’s doorsteps. The uniqueness and sheer volume of these orders make the logistics of transporting the orders the “last mile logistics” to each customer an incredibly expensive undertaking.
The Problems With Last Mile Logistics
Perhaps the most obvious problem associated with the last mile is the uniqueness of every customer. Every customer has a unique order to a unique address at a unique time. This makes it extremely hard for supply chain managers to structure or standardize last mile deliveries. Because every customer is different they require different solutions. This can quickly become both time consuming and financially costly. This is especially true for LTL carriers.
- Sharing Economy
Advantage of Last Mile Logistics
The last mile logistics can be a challenge for many firms to address. However, it is a problem that is rapidly being technologically addressed within a highly competitive industry. Businesses that can take steps to better understand and evaluate their supply chains regarding the last mile are going to be better positioned to capture market share within the transportation industry. This is why it is so important to work with a qualified 3PL. A solid 3PL possesses the technology and carrier relationships to effectively address problems regarding last mile shipping.