Nowadays, almost everyone shops online. The need for land-based retailers is starting to decrease now that it has become so much easier to get anything you need with a simple click on the web. In fact, by 2026, 24% of retail purchases are expected to take place online! Due to this, the e-commerce industry has experienced staggering growth, which has had a massive impact on last-mile logistics.
But what changes has the last-mile logistics landscape actually experienced? In this article, we will deep dive into this topic, focusing on the four key areas affected by the rise of e-commerce.
Let's get started!
Before we discuss the changes in last-mile logistics, let's define it. Last-mile logistics is, put simply, the final step of the delivery process. This includes moving products from fulfillment centers (or distribution centers) to the final delivery destination, which in e-commerce is usually the customer's front door.
This stage in the supply chain is often seen as the most important and difficult because it's so close to the end consumer. If any issues arise during last-mile logistics, they can lead to more complex solutions and cost issues.
Much of last-mile logistics involves strategies such as optimizing routes, transporting goods, scheduling deliveries, tracking them, and communicating with customers.
So, with the popularity of e-commerce companies in the modern world, we can only imagine the toll it has taken on last-mile logistics. Here are some of the most direct changes we have recently experienced in the industry:
This first change we'll be discussing is an obvious one. As more customers start to choose to order products online, the number of parcels needing delivery will increase. In fact, in 2022, the global parcel shipping volume reached over 161 billion parcels! We're also expecting a growth rate of 59% by 2027. With this growth, last-mile logistics providers cannot use the same strategies they did for fewer parcels, so changes need to be made.
Although more parcels are coming in, the customer expectations for fast delivery and good customer service haven't changed. Many also require more niche demands when it comes to delivery, such as where the parcel can be left. This means delivery companies need to complete the final stretch of the supply chain without skimping on quality. Therefore, new strategies and technologies need to be implemented, which have led to even more changes in the industry.
As we just mentioned, the increase in parcels means that e-commerce logistics and last-mile delivery providers have had to find new ways to handle their processes. They need to maintain the same level of efficiency while also being able to meet the increased demand. Due to this, it's forced last-mile delivery services to adopt advanced technologies to avoid the chance of customers having a bad delivery experience.
With higher consumer demand for online shopping and faster delivery, delivery companies have started to adopt tech in things such as route optimization, real-time tracking, and automation to improve supply chain management. It makes all processes much more efficient, reduces costs, and provides better customer experiences as they can now order more without having to worry about delays or lost packages.
As an e-commerce or delivery company, you can no longer give a customer an estimated time frame, such as 3-5 working days anymore. Customers want to know exactly when they're getting their packages, and they also want them as quickly as possible. This means e-commerce logistics companies need to offer a range of flexible delivery options to keep everyone happy.
Some of the new methods that brands need to now offer on their sites to stay ahead of the competition include things like next-day delivery, time-window choices, and in-store pickups. While providers can use their new technologies to speed things up, they also need to invest in more human power to meet these demands. That includes utilizing other shipping methods and having people organize the order of products to ensure they meet customers on their chosen date and at their desired location.
If final mile delivery procedures stayed the same even with the increased demand, there would be a lot of unhappy customers. However, to make these changes, as well as providing faster deliveries with the same level of quality, e-commerce companies need to spend more on operational costs. This isn't ideal, because then it affects their overall revenue, and doesn't always seem worth it.
That's why companies are looking for alternative ways to improve their last-mile delivery operations without spending a lot of money. Due to this, e-commerce and DTC delivery brands are putting together collaborative delivery models with third-party logistics providers like Portless. We can help with every process of the supply chain, from inventory management to ensuring delivery efficiency for a fraction of the price.
The e-commerce industry is growing, and that's a great thing. However, with the additional pressure on last-mile deliveries, it has made things a lot harder for the world of logistics. Increased parcel loads, new technologies, more delivery options, and higher costs are just some of the changes last-mile delivery companies have had to face in recent years.
However, with the help of Portless, you don't have to worry about these changes anyone. We're a China-based 3PL provider who can help you cut costs and increase efficiency all while meeting the high-demand in e-commerce logistics. We've managed to help our customers improve margins by 40%, increase cash flow by 3x, and boost lead time by 10x.
If you want to experience the benefits of Portless, contact us today.
