Most everyone has experienced the frustration of receiving a delivery notice telling them to expect a delivery between 8.00 AM and 8.00 PM—a huge time span that asks us to be on guard all day for our goods, if they are actually delivered.
In recent years, expectations from customers for fast and flexible delivery have continued to climb, spurred on by the growth of e-commerce. In fact, industry reports indicate that the global last-mile delivery market is expected to reach $258 billion by 2030.
And because of this growth, the last mile is now critical to the success of businesses.
On the one hand, the last mile is often the most expensive part of logistics and, on the other, it has the biggest impact on customer experience. By starting with the last mile and planning backwards, businesses can turn this challenge into a competitive advantage—boosting customer satisfaction, optimizing delivery speed, and improving overall efficiency.
Why is the last mile so expensive?
The last mile can be challenging to orchestrate and costly if managed inefficiently. According to Forbes, last-mile delivery accounts for 53% of the total cost of shipping. This phase, where products make their final journey from a distribution center to the customer's doorstep, often involves different vehicles, routes, and access points. It’s a time-sensitive process that requires careful coordination, and the cost of paying drivers for this stage can really add up.
At the same time, with deliveries ranging from perishable goods and bulky furniture to specialized services, it’s rarely a one-size-fits-all situation.
And this is where the real challenge lies.
There are so many moving parts to orchestrate across the order journey, from planning routes to managing inventory, and keeping all stakeholders informed. With such integrated elements, it’s no wonder the last mile often ends up being the most expensive link in the chain.
Addressing these challenges effectively requires flexibility and a combined understanding of logistics and technology. The cost of last-mile logistics is high, which is why companies need to optimize this process from the ground up to keep costs in check and make sure everything runs smoothly.
The last mile is all about the customer
Last mile has a direct impact on your customer’s experience, as this is where they finally receive the goods that they’ve ordered. Customers want flexibility—whether it's doorstep delivery, a convenient pick-up point, or delivery within specific time windows.
Meeting these variable delivery preferences requires companies to offer choices that are tailored to each customer’s individual needs, and to do so in a way that ensures efficient operations and a high level of customer satisfaction.
Since the last mile is often the only part of the delivery process where the company has direct contact with the end customer (and where the customer first meets a representative from the company), it’s crucial that this experience is both seamless and positive. Getting the last mile right can be the difference between a happy, loyal customer and a frustrated one. The key here is precision and transparency—delivering on time, every time, while staying flexible enough to handle the unexpected.
Start planning the last mile first
Many companies face the challenge of coordinating across first, middle, and last miles, as well as between central warehouses and local distribution centers. Planning often starts with where an item is to be picked up, and from there the rest of the supply chain is adjusted reactively.
However, working backwards enables you to fine tune the entire process and make sure that everything upstream (for example, warehousing, distribution, and transportation) runs as efficiently as possible.
By starting from the end point—the most challenging (and expensive) part of distribution and a key touchpoint for customer experience—you’ll be in a much better position to solve the complexities that come with it. Incoming goods need to be quickly received and staged appropriately, while outbound goods must be planned and delivered precisely according to customer expectations.
When the last mile is prioritized, all upstream links become more targeted and coordinated, resulting in faster deliveries, fewer errors, and lower costs. It’s a strategy that gives your business a competitive advantage and ensures that you’re delivering at the level that customers expect in today's market.
The role of technology in last-mile logistics
Technology plays a huge role in optimizing last-mile logistics.
With the right systems in place, businesses gain transparency over their entire logistics operations. Automation, data-driven decisions, and intelligent software ensure effective coordination across the order journey, helping companies manage routes, drivers and deliveries much more efficiently.
Transparency in logistics is essential, both to ensure that customers can track their order in real-time and for logistics companies to respond quickly to changes. An innovative IT infrastructure can optimize the entire supply chain, from inbound deliveries to inventory management, and on to final delivery. Automation and advanced algorithms can help plan routes, optimize fleet management, and ensure that deliveries are always made quickly and efficiently.
Challenges can arise when legacy systems and newer technologies need to work together to optimize the last mile. For example, integrating existing ERP systems with modern software solutions can create added complexity. But, with the right approach, you can create a software setup that’s flexible and adaptable, giving you better control over operations while providing customers with the transparency they expect.
Think last mile first
The last mile should be thought of as part of the company's strategic foundation, not as an afterthought.
When businesses prioritize the last mile, they’re better equipped to avoid bottlenecks, use resources more efficiently, and keep customers satisfied. Starting with the most challenging part of logistics means that every other step in the order journey falls into place and becomes more coherent and adapted to customer needs.
This not only provides a smoother operation, but also gives companies a strong competitive advantage by consistently delivering the kind of experience today’s customers want.
