Small parcel shipping companies and parcel carriers have both been busy trying to solve problems of last mile delivery. It’s become increasingly difficult with industry trends like ecommerce shipping and same-day delivery becoming more prevalent. This is also problematic, because the last mile presents a lot of opportunities to disrupt supply chain management. It could also present a way for the company to distinguish itself by finding cost effective ways to improve fulfillment and perfect the last mile.
A particularly challenging aspect of the last mile is with residential deliveries. Ecommerce shipping and online shopping has become a sizable portion of parcel shipping for B2C, not just for B2B. Parcel carriers have to work on ways to improve shipping in far-apart residential areas among consumer demands for faster shipping times and cheaper shipping rates, even though they often aren’t home for delivery.
These are trends in the shipping industry that have an impact on last mile delivery and supply chain management solutions for parcel carriers and online shipping:
Faster fulfillment is a major emphasis in ecommerce shipping. Logistics management efficiency and customer service are reasons parcel shippers and package carriers are working to improve delivery speeds. The last mile is a very important part of this. Small parcel shipping speeds are reaching the point where the order needs to be processed the second it comes in if it’s to be delivered within a day, or even hours of being placed.
There are far more investments in supply chain and logistics start-ups, especially to deal with last mile delivery. Parcel shipping has seen the rise of UberRUSH, Postmates, Amazon Flex, etc. for spot-market deliveries. While this provides pickup and delivery opportunities at various times outside scheduled carrier deliveries, there is no routing management, so it’s not as efficient. These parcel shipping start-ups haven’t had much of an impact yet, and they aren’t very widespread, but it’s still something parcel carriers have to pay attention to.
Supply Chain Visibility
When using local last mile delivery companies, there may be a lack of visibility that the major parcel carriers like UPS, FedEx, DHL, and USPS have now. Major carriers have improved tracking technology and proof of delivery. Shipping data for parcel shipping has become more available, despite the difficulty of keeping track of so many packages are shipped every day. Smartphones and apps have made tracking the package or driver much easier, though there is no standardized practice, yet.
As the industry changes, so do major carriers who must adjust to new parcel shipping and ecommerce trends. The United States Postal Service has less mail delivery to deal with, but ecommerce shipping has increased. USPS is well designed for parcel delivery, as they’re stopping at these homes already. UPS or FedEx has to make scheduled deliveries to residential areas, so the costs are greater for them.
A lot of companies are beginning to take matters into their own hands. Ecommerce shipping companies like Amazon are getting their own fleets to handle last mile delivery. Some 3PLs are even beginning to offer delivery service for local parcel shipments, as well. Ecommerce shippers are working to find innovative ways to improve speed of last mile delivery and cut shipping costs to improve supply chain management and customer satisfaction.
Because of demand for faster parcel shipping speed, like Amazon’s same-day delivery, cities need to have warehouses for speedy supply chain management. Having warehouse space to store products within the same city as orders are placed makes fast and same-day delivery much easier. To think that delivery within three days used to be considered fast shows how far the ecommerce industry has come. Now, in major cities, two-hour delivery is practical.
There are a lot of things that can be monitored during a shipment. For example, temperature, humidity, and more can be monitored for food deliveries. Additionally, fulfillment centers utilize weather data for parcel shipping and routing planning. They can determine potential shipping delays, or decide if extra packaging must be added to maintain the temperature of the parcel during its delivery.
Parcel shipping and ecommerce shipping supply chain management may change with automated shipping technology in the future, but it’s not common yet. Cheap shipping rates will be more prevalent, as labor is a substantial portion of the cost. In addition, there will be no limits on driving hours of robotic parcel delivery systems. Automated deliveries are being tested, but they won’t be common place for quite some time.