Winning Strategies to Conquer Last Mile Logistics

Remember when same-day delivery was a luxury? Now, it’s just another day in the world of online shopping. In fact, it is expected that 99% of retailers will provide same-day delivery services by 2025. 

In the 3PL warehousing game, those who can optimize last mile logistics and conquer customer expectations are king. 

But first, what is the ‘last mile’ in delivery and logistics? It might sound straightforward – last mile delivery is just the final leg of a package's journey from a distribution center to your doorstep. However, dealing with last mile logistics is no small feat and can be deceptively tricky to nail down.

Ready to master last mile logistics? This blog will delve into the challenges logistics providers face and explore 4 strategies to overcome these hurdles and streamline last mile delivery.

The Last Mile Problem

The last mile in logistics is actually the most expensive part of the shipping process, accounting for 53% of the total delivery costs in the United States. And, on average, shippers cover 25% of the shipping expense out of pocket. 

Common issues that can make last mile delivery costly and complex include:

• Inefficient order planning
• Dispatch issues
• Rising fuel costs
• Lack of visibility

And when you add things like consumer preferences for fast delivery time into the mix, it creates another layer of complexity for last mile logistics. 

As the last mile landscape has rapidly evolved in recent years, driven by consumer expectations and the rise in e-commerce orders — the use and availability of technology to combat this demand has also evolved in leaps and bounds.

Emerging Trends and Technology in Last Mile Logistics

1. Last Mile Trend: Warehouse planning for increased order volume 

Ensuring your warehouse operations can handle increasing order volumes is necessary to stay ahead and future-proof your business, especially with the last mile delivery market projected to exceed $50.2 billion by 2025 with 62% of that market stemming from e-commerce sales.

2. Last Mile Trend: E-commerce and omnichannel popularity continuing to rise

By 2024, a whopping 278.33 million Americans are expected to be shopping online. This surge in online shoppers has increased the number of last mile deliveries, especially in cities like Manhattan, Chicago, Phoenix, and Houston. Meeting these delivery demands has led to urban warehousing, where networks of warehouses are strategically placed within or near major cities to shorten delivery times and be closer to the end consumer.

3. Last Mile Trend: Innovation in urban delivery transport 

In urban areas, you’ll find same-day delivery a reality with the help of technologies such as delivery drones, robots, and eBikes. The use of Cargo eBikes are now a popular option for shippers due to their ability to carry more weight, navigate busy city streets with ease, reduce the last mile carbon footprint, and deliver packages 60% faster than vans. 

4. Last Mile Trend: Multi-warehousing for localized inventory storage

This is not limited to last mile, we are seeing global supply chain shifts with an increase in nearshoring and friendshoring, to bring stock closer to the last mile market and circumnavigate potential delays or other issues with long supply chains. For last mile providers, this can also take the form of using multiple warehouses across their markets to store inventory closer to their market, for faster last mile delivery.  

5. Last Mile Trend: Integrated WMS to unlock growth

According to this study, when selecting a 3PL partner, shippers are looking for a 3PL that has a tech solution to manage their operations. On the flip side, our CartonCloud Logistics Index report found that 3PLs are seeking a WMS that can help them improve their customer service and increase the amount of services that they can provide to clients.

Having the right software can not only help you win more business and bring in additional revenue, it can allow you to plan your operations to reduce potential delays and unexpected costs, and offer diverse and innovative service offerings. 

Strategies to Optimize Last Mile Logistics

There are several last mile delivery logistics solutions that you can incorporate into your 3PL operations to tackle the last mile problem and meet consumer demand.

Last Mile logistics Strategy 1: Expand your warehouse network to reduce fuel costs and expedite last mile deliveries

Rising operational costs have been a significant concern in the logistics industry for several years. In fact, our CartonCloud Logistics Index report found that 75% of logistics businesses were experiencing an increase in operational costs, such as fuel, and are focusing on reducing these costs for 2024. To mitigate these expenses, it’s important to have the right infrastructure in place. 

Ensuring your warehouses are strategically located with a central hub can better streamline your shipments and avoid wasted miles that add up to wasted money. 

With proper inventory management and planning, you can distribute stock across multiple localized hubs, to reduce shipping costs and respond quickly to order spikes. 

Hub and Spoke last mile logistics: The hub-and-spoke model is an effective distribution strategy for those with the option of utilizing multiple warehouse spaces — this may be owned spaces, or utilizing other 3PL partners. 

This model decentralizes your inventory from the main hub. With order forecasting, you can send out bulk shipments to regional spokes to be held for last mile distribution, rather than having all orders sent through extensive supply chain delivery channels for every order. Each of the ‘spoke’ warehouses as shown below, can be located close to their last mile market, allowing for fast dispatch from the facility to the end receiver. 

When expanding your warehouse network, it’s important to keep in mind effective warehouse management so you can increase your overall visibility. CartonCloud’s WMS is equipped with a multi-warehouse functionality, allowing you to have real-time data sharing across all of your warehouses, and be able to locate and track inventory at all times.

You also have direct control and visibility over stock allocation into each of your warehouses, ensuring your pickers and packers have clear visibility of only the stock in that specific warehouse.

If you don't have multiple warehouses, there's no need to worry! Partnering with the right 3PL providers and outsourcing last mile services can also give you access to these strategic locations while keeping costs down and maintaining quality customer service. 

Last Mile logistics Strategy 2: Boost visibility across your entire network with the right WMS tools

Visibility is key to managing last mile deliveries efficiently, especially when you’re dealing with multiple warehouses or partners. 

As your network expands, more staff and devices will need access to your WMS. This is where an integrated WMS and TMS like CartonCloud comes in handy, especially if you’re using a hub-and-spoke model. With these systems working together, your workers can seamlessly track inventory levels at the hub, monitor shipments to spokes, assign and allocate tasks across your team, and optimize routes for delivery vehicles radiating out from the hub.

As a fully integrated WMS and TMS, CartonCloud further simplifies this process by allowing access to both the desktop and mobile app through a central login. All you need for your warehouse and transport management needs, in one place. 

This means you can access everything you need anytime, anywhere! With the ability to create multiple user logins, you can ensure that data is always up-to-date, and all activity is tracked to the user for genuine transparency.

Another key tool that is essential for last mile visibility is having an all encompassing client dashboard. CartonCloud’s client dashboard acts as your mission control, with all of your action items located in one spot. You can easily track sales order volumes, see how many orders need to be packed, and view any flagged issues so you can address them immediately. That way, you can keep everything running smoothly and efficiently across your entire warehouse network.

Last Mile logistics Strategy 3: Streamline your last mile deliveries using a cross docking model

Cross docking minimizes storage time by directly transferring goods from inbound to outbound trucks, reducing your handling costs and speeding up deliveries. When paired with the hub-and-spoke model, it creates a streamlined flow of shipments to spokes without stock sitting longer than necessary in the central hub. This means your customers avoid extra warehouse handling fees, giving you an even greater edge over your competitors!

With CartonCloud’s crossing docking feature, you can sort your stock faster and provide transparency across the entire process. You can pre-build your delivery run and have everything ready to go as soon as your incoming stock arrives. Once the stock is checked in, you can allocate it to a delivery run, and it’s ready for dispatch!

Learn more about how you can execute last mile deliveries faster with cross docking here.

Last Mile logistics Strategy 4: Simplify order fulfillment by integrating E-commerce platforms with your WMS

Getting order fulfillment and planning right is super important for nailing last mile logistics. With the rise of online shopping, customers expect their deliveries to be fast and accurate. Proper planning helps you avoid any potential delays and ensures your inventory is in check.

With the increase of online orders, having direct integrations into CartonCloud with your customers e-commerce platform makes handling orders much simpler. If your customers use Shopify, CartonCloud’s Self-Managed Shopify Integration lets you quickly connect to your customers account and view inventory reports in real-time. This seamless connection ensures that you can manage and fulfill orders efficiently and keep pace with the growing demands of the e-commerce market.

Want to know more?

CartonCloud is created by logistics people for logistics people.

Contact our friendly team today to schedule a FREE demo and see for yourself how our WMS can elevate your last mile logistics strategy.