#Article
#Software Development
#Logistics

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.

products bought online

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

retail ecommerce sales worldwide

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

Stay tuned to know details.

Solving LM Delivery Challenges with Last Mile Delivery Logistics Solutions

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.

package delivery worldwide

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

Cost of Last Mile Delivery Can Reach 30% of Transportation Cost

What’s included in this cost?

cost per mile

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.

What is the solution?

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.

Unpredictability Leads to Inefficiencies

self driving vehicles

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.

What is the solution?

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.

Regulations Impede LM Delivery

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.

What is the solution?

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

Ready-to-use solutions are unavailable here.

No Control and Visibility over Deliveries and Drivers

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.

What is the solution?

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

logistics software solution

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.
Point of view
“Here at Innovecs, we consider visibility and forecasting to be one of the major problems faced by our clients. They’d like not just monitor the delivery status in real-time but also do forecasts when the parcel will be delivered and predict risks or possible delays.”
Sergey Khandogin,
CTO at Innovecs

Delays and Damaged Goods Affect the Consumer Experience

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.

damaged package fragile delivery

return

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.

What is the solution?

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.

How to Succeed with Last Mile Logistics Software Development

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?

Discovery Stage

discovery stage

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

Development Stage

development stage

  • 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

Delivery Stage

delivery stage

  • 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.

Where to Start?

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.

Customers

customers

  • 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

Retailers

retailers

  • 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

Carriers

carriers

  • 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.

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