Overcome ongoing challenges with supply chain efficiency and build competitive advantage with last-mile delivery (LMD) technology solutions.
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Leverage Last-Mile Delivery Technology for Supply Chain Efficiency
By Oscar Sanchez Duran | December 4, 2024
Last-mile delivery technology advancements help organizations stay reliable and agile
E-commerce and fulfillment operations are growing daily, thanks to customer demand for faster and more reliable deliveries. Agility in last-mile delivery processes and service options is critical to addressing that demand. It allows you to meet customer demands providing fast, accurate and efficient product delivery that increases customer loyalty and gives your organization a competitive advantage.
To optimize your last-mile operations to meet challenges including the demand for faster and more reliable deliveries, technologization, a hyperfocus on customer experience, increasing sustainability demands and rising costs, leverage these top seven trends in last-mile delivery (LMD) technology.
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Look to last-mile delivery technology trends to create competitive advantage
To overcome ongoing challenges, supply chain technology leaders can heed last-mile delivery strategy and technology trends in three categories: proximity, experience and innovation.
Last-mile delivery trend No. 1: Fine-tuned delivery with reliability and speed
Why it’s trending: Ninety percent of respondents to the Gartner Future of Supply Chain Survey say speed is one of the three most important aspects of their LMD options, and 40% rank it as the most critical. Additionally, 85% of respondents rank reliability in their top three most crucial factors for last-mile operations, with 48% deeming it the top consideration.
Recommended actions: Invest in LMD technology solutions to increase speed and reliability, leverage route optimization capabilities and explore LMD vendors’ courier network and crowdsourcing driver capabilities to free up additional capacity to meet demands.
Last-mile delivery trend No. 2: Microfulfillment to supercharge last-mile delivery
Why it’s trending: By 2030, the microfulfillment industry is expected to grow 12 times its 2022 size, propelling the development of microfulfillment centers (MFCs) in response to demand for LMD services in several verticals.
Recommended actions: Evaluate the need to establish an MFC based on strategic priorities and customer demands, and assess LMD technology vendors’ capabilities in integration and inventory management to ensure the best routing options and services for the end customer.
Last-mile delivery trend No. 3: Customer centricity
Why it’s trending: Measuring customer satisfaction will be the most valuable metric for making strategic decisions in the next one to three years, according to 69% of respondents to the Gartner Future of Supply Chain Survey.
Recommended actions: Leverage LMD solution capabilities to enable faster and more reliable delivery through multiple fleet options, customized delivery options and stronger communication to maximize customer engagement and ultimately increase customer experience.
Last-mile delivery trend No. 4: Ultraconvenient delivery
Why it’s trending: Last-mile logistics account for 41% of total delivery costs, largely because other service types are often more efficient than home delivery. Consumer convenience is vital for organizations with omnichannel business strategies that provide last-mile shipping options.
Recommended actions: Assess LMD capabilities to provide more delivery options and leverage cost optimization and demand forecasting capabilities to promote delivery services that can lower transportation costs while increasing efficiency.
Last-mile delivery trend No. 5: Sustainability and electrification of fleets
Why it’s trending: A World Economic Forum study indicates that moving to electric vehicles (EVs) can reduce delivery costs by 25%, and energy consumption and CO2 emissions by 30%. At the same time, the exponential growth of consumer deliveries has generated an enormous rise in packaging waste.
Recommended actions: Lower carbon emissions and improve route optimization and operational efficiency through the use of LMD technology. Consider investing in EVs or other alternative fuel vehicles, drones or bikes to further reduce carbon emissions and noise pollution while providing cost savings.
Last-mile delivery trend No. 6: Proliferation of unmanned vehicles
Why it’s trending: Numerous companies are starting or expanding drone delivery services and other unmanned vehicle technology. Upcoming innovations driven by supply chain AI and machine learning will allow for even greater automation in delivery processes.
Recommended actions: Develop a strategy for using unmanned vehicles for LMD. Start by identifying use cases and products suitable for LMD using different fleet types, assess how clients might react, and determine trade-offs and challenges.
Last-mile delivery trend No. 7: AI and GenAI in last-mile delivery
Why it’s trending: Companies are prioritizing innovation opportunities in their LMD strategies, and incorporating AI is a primary means to address market demands. Forty-two percent of logistics organizations have placed automation technology in their top three activities where they have invested the most effort to improve last-mile operations.
Recommended actions: Explore the current AI and GenAI capabilities of LMD vendors, assess current AI use cases for logistics against your last-mile operations and desired outcomes, and consider integrating GenAI capabilities to improve customer experience.
Last-mile delivery FAQ
What is last-mile delivery?
Last-mile delivery (LMD) is the final product delivery phase during which products travel from a warehouse to a truck to the customer. A new wave of LMD technology solutions — specialized, customer-centric transportation management solutions that focus on managing the ultimate stage of the delivery process — are poised to help solve many organizations’ last-mile operations challenges.
How can supply chain leaders optimize last-mile delivery?
Supply chain leaders can optimize last-mile delivery (LMD) by working to get the most out of current technology solutions and focusing on innovation ahead. Understanding new technology trends in LMD allows supply chain technology leaders to choose applications that create competitive advantage for their organizations.
What are the key developments in last-mile operations and delivery?
The largest and most significant developments in last-mile operations and delivery are related to automation and collaboration capabilities, optimizing operations and creating efficiencies while also improving the customer experience. Last-mile delivery (LMD) technology allows supply chain technology leaders to be closer to their customers, reduce costs, generate new revenue streams and increase customer loyalty.
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