Last-mile deliveries often represent the most difficult aspect of supply chain management. Pound-for-pound, they are certainly the most costly element in the delivery process. They are also fraught with the danger of delay, damage, and loss—all while end customers anxiously wait for their often-critical shipments. 

Here are five challenges shippers face when managing last-mile deliveries — and how they can tackle them holistically with a combination of technology and people.

1. Last-mile shipment visibility is impossible without a comprehensive solution. Too many companies these days still keep track of shipments with Excel spreadsheets, or even with paper documents. It’s fair to say that those companies have zero real-time visibility to last-mile deliveries and can do little to provide customer service to those whose shipments may go awry.

Even those that deploy technology have difficulty because they usually will need to log in to multiple systems to ascertain the status of shipments — so they don’t have a bird’s-eye view of the overall deliveries situation. That’s better than doing things manually but it doesn’t aggregate all shipment data nor does it address the problem of reducing end-customer anxieties when shipments are delayed. From a technology standpoint, what is required is a comprehensive system that can track all shipments. But technology doesn’t provide a holistic final-mile solution. Visibility alone can’t make sure that deliveries get where they are supposed to go and keep customers informed personally.

For that to happen, shippers need, in addition to technology, a team of human beings to monitor shipment exceptions, such as delays and damages, and to communicate directly with customers to alleviate their concerns. Total visibility plus live tracking of couriers is a game changer.

2. Shippers take the blame for faulty deliveries. Most of the time, whatever the cause of shipment delay, damage, or loss, the customer will blame the shipper. Customers will often refuse to order from a shipper again and the shipper loses crucial repeat business. Keeping customers satisfied, on the other hand, boosts the shipper’s Net Promoter Score — a metric that gauges customer willingness to recommend a vendor to others — and can increase same-store sales between 20% and 190%. Recent research shows that consumers worldwide are less than thrilled with the state of last-mile deliveries — so companies that perform well have a competitive advantage. When it comes to last-mile deliveries, a shipper’s brand reputation hangs in the balance.

A holistic solution combines technology and the personal touch to alleviate problematic shipments. The technology automates the monitoring of shipments and generates “exceptions.” Those are monitored by a human team that communicates directly with customers. Most customers won’t mind dealing with a shipment delay if they are personally kept informed of the shipment’s status. Besides relieving the shipper of the burden of performing such tasks, last-mile solutions help create a great buying experience for the customer — which will positively impact a shipper’s top and bottom lines.

3. Supply and demand never match existing last-mile capacity. Whether a company has its own fleet of delivery vehicles or relies solely on outside providers, delivery will vary on any given day. Existing capacity will rarely be able to accommodate all deliveries efficiently — which is why access to additional outside capacity helps to make sure that all deliveries are dealt with properly.

Shippers often have deliveries to make at divergent locations, making it difficult to optimize routes — and making it more efficient and cost effective to place some deliveries with other outside carriers. Access to an aggregated and connected network of logistics providers helps shippers optimize deliveries and lower costs.

Comprehensive last-mile delivery solutions provide electronic access to a marketplace of providers and human management of those suppliers to vet them for proper insurance, licenses, and service quality, and to coach and counsel them when deliveries go south. Proper management of such a pool also means that the team works to constantly grow it, making sure that capacity is available in advance for specialized requirements and that the network includes national, regional and local entities, in order to play on the strengths of each.

4. Most last-mile systems fail to account for returns. It’s useful to think of last-mile systems as an extension of a shipper’s customer service organization. That’s why it’s crucial to deploy a solution that accounts for customer returns. The returns process is an important element of the overall customer experience.

Shippers that ease the returns process for their customers have a leg up on the competition. Other things being equal, customers are likely to do business with vendors that pick up their returns directly, rather than requiring the customer to deliver the return to a shipper or carrier location. Facilitating the returns process also benefits shippers. Once an item is to be returned, it reverts to the shipper’s inventory. If customers have 30 days to return an item, they may take their time getting to a returns location. By making the returns process easy, shippers can retrieve their inventory more quickly.

Advanced last-mile delivery solutions are agnostic to when, where, and why pickups and deliveries need to be made. Deploying a system that sees returns as just another pickup and delivery and elegantly addresses scheduling issues has the obvious advantages of saving time, cost and hassle to end customers and shippers. 

5. The last mile represents the costliest leg of the delivery process. Think about what it takes to get a product from an overseas manufacturing facility to an end-customer in the United States. The first leg of the journey will likely involve a voyage in a container on an ocean vessel to a coastal seaport, followed by inland movements by rail and/or truck. The transportation costs associated with any individual item in a container or trailer are minuscule when compared to the value of the product.

Not so for last-mile deliveries. Take the example of a home improvement company with its own delivery fleet. It might load two pallets of lumber weighing thousands of pounds along with two boxes of nails on the same flatbed truck to be delivered to two separate customers. Each delivery will cost about the same — but by taking the nails off the flatbed and putting them into a rideshare, the delivery cost for that shipment can be halved. It’s not hard to calculate the savings when costs are slashed for multiple deliveries on a daily basis.

Comprehensive last-mile delivery solutions can perform other magic as well, such as holding orders in the system for a short time in case the customer places another, optimizing internal delivery fleets by removing shipments that take drivers off the beaten track, and allowing shippers to promise next-day delivery at second-day rates when shipments move within the same zone.

The solutions also reduce the environmental costs of last-mile deliveries. Selecting the right vehicle for a given delivery has an environmental impact — so, delivering a box of spark plugs, for example, would be better accomplished by a Toyota Prius than a Ford F150. By helping companies meet their sustainability goals, comprehensive last-mile delivery solutions can generate enormous customer loyalty benefits, which, along with cost reductions, add to a shipper’s sales success and profitability.

OneRail: A Complete Last-Mile Delivery Solution

OneRail offers shippers an advanced last-mile deliveries solution that combines technology supported by dedicated human teams. OneRail’s platform automates last-mile processes, while the company’s exceptions management team provides 24/7 delivery support, and its logistics partners team interfaces directly with couriers. “Along with the artificial intelligence in the platform,” says Lisa Catania, OneRail’s co-founder and executive vice president, “our team monitors conditions like traffic and weather and can predict when shipments might be late.”

OneRail’s marketplace includes access to 9.5 million couriers, from national delivery companies to small local outfits. All of them enjoy the benefits of connected transportation management systems — and OneRail provides them a TMS for free if they don’t already have one. OneRail’s logistics partnerships team looks for new couriers to bring on board daily. That way, when new customer needs come up, whether it’s for deliveries of food, medicines or hazmats, OneRail’s, connected marketplace is prepared to provide the necessary capacity.“This is where a third party works best,” says Matt Schultz, OneRail’s vice president of Logistics Partnerships. “We provide a scale of delivery capacity that is impossible for shippers to develop on their own.”

The value derived by OneRail’s shipper customers is reflected in their lower operating and transportation costs. “A small auto parts dealer was able to reduce its delivery fleet by 15%, through access to the capacity offered by OneRail’s connected marketplace,” says Jeff Flowers, OneRail’s chief operating officer. “That’s going to decrease their maintenance and fuel costs, as well as their impact on the environment.”