Last Mile Delivery for 3PL’s: The Challenges and Solutions

eCommerce has seen huge growth over the past two years due to the dependency on deliveries since the COVID-19 pandemic. And it doesn’t look like things will be slowing down any time soon. Many companies have begun relying on third-party logistics services (3PL) to help them with the increasing demand and rising customer expectations associated with last mile delivery. It is predicted that by 2026 the 3PL market will reach around $1.75 trillion [1].

Last mile delivery, or final mile delivery as some call it, covers everything from when your goods leave the warehouse up until they are at their final destination.

So, why would a 3PL need support from a last mile logistics specialist?

Keeping up with the needs of your customers can be very challenging, given the constant technological advances, operational complexities, unpredictability due to external factors, and any extra costs that may arise due to changes in the economic, political or social climate.

Let’s look at some of the challenges in more detail:

1. Changes in customer behaviour and expectation

Delivery expectations have changed a lot over the years, and waiting 3-5 working days for a parcel isn’t always acceptable for the modern consumer. Free and fast shipping is what most expect, with some customers even demanding same-day delivery, which is why almost 80% people shop with Amazon [2]. Any changes to delivery dates can also cause 62% of consumers to never shop with a retailer again, and this figure goes up to 68% during peak holiday shopping seasons! [3]

More recently, customer have expectations on how a business is working to minimise their impact on the environment. Therefore, planning all delivery routes to ensure shorter delivery times with lower carbon emissions is vital throughout the final mile. Customers need clear visibility on this at the time of purchase checkout to see low-carbon options.

2. Technology advances

Technology plays a huge role in increasing overall business efficiency, it can sometimes require lots of changes, overheads, and complex integrations to get to the benefits. For example, cost is a huge factor to consider, the time and resources needed to train staff, and any upgrades or updates that are needed. Therefore, it comes as no surprise that almost half of all delivery companies are still using outdated technology.

3. Transparency and tracking

Along with the rise of customer expectations for delivery times, customers also want to know where their parcels are at any given time. This level of transparency helps to keep consumers updated on their shipping status and ETA in real-time, avoiding the need to send emails or spend time on the phone to call centres if there have been any disruptions.

4. Unpredictability

Unfortunately, many elements that can disrupt a package being delivered cannot be avoided no matter how much planning is in place. However, deciding on the most logical routes and having efficient backup routes in place can help minimise any customer dissatisfaction and ensure that costs remain within budget.

5. Rising costs

With the increase in customer demands, inflation, rising fuel costs, and other factors, final mile delivery is becoming costlier and dearer. It’s estimated that around 53% of the total shipping cost comes for the last mile alone!

Is there a solution?

GFS’ Last Mile Delivery

  • Shipping management software that unlocks delivery options and new markets for a streamlined and unified delivery process.
  • First-class customer experience with the GFS Customer Care and Operations team who proactively monitor and track every individual parcel.
  • More parcels and more business. Access to hundreds of different carrier services through one single relationship and one simple technology integration, regardless of the service or country of origin.
  • Latest technology suite with single integration into your operations.
  • Access to a global network and lane-specific experts.

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