Why Last Mile Delivery Solutions Can Disrupt Logistics

In 2019, it is expected that retail ecommerce sales will grow by 21%, up to $3.5 trillion. This means that the last mile delivery topic will become even hotter in the near future.

If 68% of consumers are looking to have packages delivered directly to their home, how will this influence last mile delivery?

How can logistics companies deal with this and what software do they need to succeed?

Stay tuned to know details.

Since increasingly more consumers are looking for different delivery methods, last mile delivery has become an option for retailers and logistics companies looking to add value to their services.

However, before developing LM delivery services, companies need to understand what hurdles are hidden in this process.

What’s included in this cost?

Self-driving and electric vehicles or drones can considerably cut delivery costs.

No wages in the case of autonomous vehicles.

No fuel in the case of electric vehicles.

Fewer insurance fees in the case of self-driving cars.

When it comes to disadvantages, this transition to new technologies requires more automatic calculations. So, it’s high time for the introduction of customary logistics software solutions.

Most companies offering off-the-shelf solutions focus only on some aspects of automation. For instance, Drive.ai develops the self-driving car’s brain but doesn’t help incorporate this solution into the business processes of your company.

Varying traffic patterns, unreliable delivery locations, and changing routes not only increase the delivery cost but may result in delays and other inefficiencies.

To deal with this, retailers and logistics companies need to use AI-driven technologies that analyze big data in real time and adapt the delivery process accordingly.

So far, ready-to-use software either offers a niche solution or demonstrates the real-time data without any forecasts.

With 6 years of experience in big data and AI, Innovecs can help incorporate these technologies into software that can create forecasts rather than only broadcasting the situation in real-time.

For companies operating across different countries, or even states of one country, it is important to understand the current laws of a certain area.

Top regulations to take into consideration:

• Vehicle size that can drive in a certain area
• Permissible weight for vans
• Parking rules
• Noise restrictions
• Regulations for car drivers and the permitted hours-of-service

These requirements must be followed in order to automate the process of choosing the right vehicle, the right driver, and even the right delivery time.

Most logistics companies either control regulations manually or customize their software accordingly.

Ready-to-use last mile delivery logistics solutions are unavailable here.

In 2018, the number of vehicles used for LM deliveries across the USA alone was incredible. Amazon had 20,000 vans. UPS used 119,000 package cars, vans, tractors, and motorcycles. FedEx Ground’s vehicle park consisted of 60,000 units.

This ridiculous volume of vehicles shows why it is crucial to make all this stuff visible and controllable for retailers and delivery companies.

Companies require tools to track routes and drivers and monitor the current state of any given delivery process.

Consumers themselves would like to check up where their parcel is.

Although out-of-the-box solutions already operate within the market, they can’t consolidate all the business processes whenever many third parties participate.

This means that large companies using third-party logistics (3PL) services for the last mile delivery must develop their own logistics software solution meeting all the following requirements:

• It can be seamlessly incorporated into the business processes of all participants.
• It needs to be fast and scalable.
• It must deliver real-time statistics.
• It forecasts the delivery time as accurately as possible.

As crucial as customer loyalty is for retailers, delays and damaged goods may injure vendors’ reputation forever.

As a result, a bad collaborative experience with internet retailers leads to at least 30% of all products ordered online to be returned as compared to 9% in brick-and-mortar stores.

Since 92% of consumers are ready to buy something again if returns are easy, the implementation of a convenient return process becomes essential for retailers.

Returns management software can help companies automate the return and refund processes and make them seamless.

One of the most well-known solutions is a cloud-based platform, 12Return, that can serve as the connector between the retailer’s CRM and ERP systems. It authorizes a return, tracks shipment, controls a return product’s quality, and automates refund.

Although there are a variety of startups targeting this niche solution, it becomes difficult for large-scale retailers and delivery companies to incorporate all such tools into one consistent and scalable system.

In this case, a software development company like Innovecs can help.

By focusing on logistics software solutions, we can both tailor a tool from scratch and customize your software in accordance with new requirements.

So, how do we ensure successful collaboration?

• Discuss the problem
• Analyze different solutions
• Choose the technology
• Estimate time and budget costs
• Avoid redundancies
• Include important things

• Manage the experience of developers on board
• Use shared resources for small tasks
• Collaborate with the product manager to track the processes in real-time
• Use an iterative approach to the development process

• Use QA services to test your product
• Revise features
• Enjoy the polished product

More advice on how to plan technology outsourcing and how to avoid outsourcing risks can be found in our expert blog.

If you’re looking to automate the LM delivery process, focus on improving major areas from different points of view: the client’s, the retailer’s, and the carrier’s one.

• Require an increase to the delivery speed
• Are looking for lower shipping prices
• Need flexibility in destinations
• Need the possibility of dynamic shipments, when the mid-shipped parcel can be diverted
• Demand easy returns
• Call for easy tracking in real-time

• Rebalance the shipping portfolio by mixing in-house and 3PL delivery services
• Are looking for enhanced visibility opportunities when all the stats are visible, no matter their origins
• Need decentralized distribution with more warehouses to improve the delivery speed
• Try to increase the number of shipping options

• Looking to cut costs for all deliveries
• Try to increase accuracy
• Improve predictability based on their data
• Demand an increase in capacity utilization
• Increase safety, with fewer insurance payments
• Standardize package requirements for “containerization” of last mile delivery

To understand where to start, it’s better to prioritize challenges and estimate the solution cost, including a ready-made one and those that need to be crafted.

If you need help, Innovecs can become a reliable partner in your journey.

Just contact us to schedule a meeting.