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All You Need to Know About Final Mile Delivery

October 16, 2019 Final Mile

We bet you can’t wait to get those custom-made boots you ordered a few days ago!

Your package should be easy to track if the company delivering it posts that information online. But why does the tracking seem to just drop out of sight when the package arrives in your city (but not yet at your home)?

Answers to this simple question are not so simple. To find out more, read the following guide to final mile delivery.

What is Final Mile Delivery?

“In addition to being a key to customer satisfaction, last mile delivery is both the most expensive and time-consuming part of the shipping process.”

The final mile is where we live and work, which is what final mile delivery is all about–and why, in spite of the cost, it’s so important to shipping companies and their reputations. The customer matters.

Whatever glitches might happen in a warehouse, in the air, on a truck, or on a train are known only to those conveying the freight–sometimes not even them. But the recipient is expecting the item and is sure to know if something has gone wrong.

As an item makes its way from the warehouse to its destination, the “last mile” of delivery is the final step of the process–it’s when the package should finally arrive at the recipient’s address. It nearly always does, thanks to the local delivery outfit.

Final mile delivery is used by some surprising “shippers,” too–such as passenger airlines. If your checked airline luggage is delayed, it’s usually a local courier who brings it from the airport baggage claim to your home or workplace.

Why Use Final Mile Delivery?

You probably don’t even know you’re using it a lot of the time, especially if you’re not tracking your package online. The package arrives and you’re happy. This is how final mile delivery helps you.

However, more and more packages now start their journeys at large companies such as UPS or Amazon, then are handed off to another entity–typically a private courier or USPS–for delivery in their locality.

Often, businesses will contract with a local courier to deal with the final mile. It just makes sense to hand the package off to someone local, who knows directions, traffic patterns, and so on. They will deliver it expeditiously.

For an extra fee, many local courier services also will provide services such as product assembly and packaging disposal. And they will go beyond simply dropping the package outside the house and instead take it to the inside location of choice.

The final mile is likely to change in the future, however. It’s a bit disorganized today–and appears to be heading further in that direction as more people become involved in the supply chain.

Who Does Final Mile Delivery?

It should be no surprise that UPS and FedEx now dominate the last mile of delivery. In fact, FedEx estimates that more than 95% of all e-commerce orders in the US are delivered by them, UPS, or the United States Postal Service (USPS). 

There is competition, though. Others on the list include XPO Logistics, USPS, Walmart, Amazon, Postmates, Deliv, Hitch, and Darkstore.

At least half the names in the top 10 are familiar to most Americans, but others are not. Some of the less familiar companies are local and/or niche delivery services or couriers.

Final mile delivery can be quite a business opportunity once you realize how many branding nuances are possible–nuances not often available from larger carriers.

Some smaller businesses specialize in same-day delivery. Others, such as Hitch, match the people placing an order with couriers heading in the direction that the item needs to go. Uber and Lyft have begun to compete in this arena as well.

For its part, the giant Amazon has been pushing hard for greater control over the final mile. The introduction of its Shipping with Amazon service will put the company in head-to-head competition with UPS and FedEx for this business.

This, along with nearly doubling its subcontracted Amazon Air fleet, and a great deal of internal shuffling of employee jobs and other efforts is in support of its well-hyped one-day delivery for Prime customers. It’s all about final mile delivery.

Optimizing Final Mile Delivery: What Some Experts Have to Say

It’s become clear to many people that final mile delivery has benefits and challenges. Here, some experts are cited for what they see as the challenges of the final mile, both now and in years to come.

Business Insider’s Shelagh Dolan writes, “If you’ve ever tracked a package online and saw that it was ‘out for delivery’ for what felt like forever, you already understand that the last mile problem is inefficiency.”

That’s because the final leg of a shipment typically involves “multiple stops with low drop sizes.” Most residential customers–especially those in spread-out rural areas–seldom receive more than a few packages from the same carrier on any given day.

It’s more than this, though. The challenges to business are complex–and growing more so by the day.

Greg Hewitt, the CEO of DHL Express, speculates about the future of shipping, noting that consumer demands are increasing rapidly at various levels and across an ever-expanding territory.

He reminds us that infrastructure and logistics will be key to the success of the entire supply chain, from global to local. As the customer base of companies large and small goes global, the industry must be able to accommodate the added traffic.

Solving the final mile dilemma will be tricky. Will Salter, CEO of Paragon Software Systems says that a big issue with the final mile has to do with supply chain partners that won’t collaborate.

Salter believes shippers will be forced to collaborate in the future. In fact, he foresees the inevitability of local governments needing to step in and enforce measures to consolidate traffic in urban areas, including all the delivery trucks.

He says: “Come 2040, this level of efficiency will be standard, but it will require close public-private collaboration. In future urban delivery models, local governments will become active and essential partners.”

Time will tell…

The Final Mile

Local couriers can’t offer every type of delivery service, especially when it comes to bulky items or those with special handling needs. But when it comes to the final mile, they could easily remain your “go-to” carrier for the foreseeable future.

And while improving logistics and infrastructure is essential on a larger scale, the role of local couriers will likely be maintained. They offer personalized and knowledgeable local service. They can navigate metro areas or serve small towns.

The next time, you need some sort of local delivery or pick-up–and desire final mile delivery on a budget–give them a call. You’ll probably see a local person at the door soon, ready and waiting to help you.

Can a final mile delivery service meet your needs? Call your local courier and find out!

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