The last mile in the delivery process is the most complicated, most expensive, and most important one of all. In 2020, with the rise of eCommerce sales and home deliveries, its importance intensified significantly. Last mile logistics will continue to be an important aspect in the future, and in 2023 we are going to see a number of new developments. The eCommerce sector requires a seamless process to meet customer needs, but there are several challenges that are making this more difficult.
Last mile delivery represents around 50% of the total cost of shipping, and inflation is making it even more expensive. The rise of eCommerce and the emergence of 3PL companies, combined with unpredictable fuel prices and rising labour costs, have made the logistics process more complex for shippers.
Let’s take a look at the trends we are likely to see the industry adopting for last mile logistics this year.
More and more consumers are concerned about the environmental impact of the items they buy, and in the 2022 Global Sustainability Study by Simon-Kucher, 60 percent of consumers rated sustainability as an important purchase criterion. Some of the ways companies can reduce their carbon footprint while trying to deliver items as quickly as possible include using electric vehicles, optimizing delivery routes to reduce emissions, and using recyclable packaging materials.
Using the right technology can help streamline employee tasks, keep customers on board and help companies differentiate themselves. Predictive analytics are likely to be a dominant trend, enabling companies to gain clarity on the status of shipments, as well as anticipating future problems, mitigating risks, and improving the whole process.
Another solution is real-time shipment tracking technology, which will be essential for streamlining deliveries and meeting customer expectations. The majority of customers now expect immediate updates about their orders, which tracking technology allows them to have access to.
Consumers are increasingly demanding more from their suppliers: a recent investigation by Mckinsey in the US revealed that 90% of consumers expect shipments to be delivered within two to three days and around 46% abandon their shopping cart if the estimated delivery time is too long. These increased demands are forcing companies to make this a priority.
Omnichannel retailing is a business model in which retailers offer customers a choice of ways to purchase their products, both through online and offline channels. This makes it more flexible and convenient for consumers to purchase goods or services, which can lead to a dramatic increase in sales.
Companies can improve control over delivery speed, flexibility, and costs by investing in omnichannel retailing, because it reduces the time it takes for products to go through intermediaries and makes last-mile logistics more efficient. From 2023 onwards, retail shopping experiences will become highly personalised with the help of advanced data analytics, in a bid to create seamless fulfilment experiences and maximise individual consumer satisfaction.
Drones and delivery robots
Delivery drones are aerial devices that can deliver packages to customers. They can deliver packages quickly and efficiently, especially in areas that are difficult for traditional delivery vehicles to reach. Delivery robots are small autonomous robots that can deliver packages to customers in urban settings.
The technology used for both is similar to that of self-driving cars, including sensors, computer vision systems and GPS systems, which help them navigate their environment. The increased need for contactless delivery during the pandemic accelerated the demand for this type of last-mile delivery and, in a few years, companies in all industries will use this technology to enable innovation in several areas of their operations, such as delivery, research and monitoring.
The world is changing, and the logistics sector is working hard to keep up. The last mile delivery sector is experiencing rapid growth, and it will be interesting to see how the above trends affect the logistics process and what other new innovations emerge in the coming years.