A Complete Guide to Final Mile Delivery and Reasons To Choose Outsourcing Logistics

A Complete Guide to Final Mile Delivery and Reasons To Choose Outsourcing Logistics

With the rising consumer’s expectations and uproaring competition, the consumer’s buying behaviour has vastly changed. Consumers expect a cheap, fast and same-day delivery. They wish to see it as an additional perk for their purchase. To stay competitive, companies need to find a way to improve efficiency and cut costs to fund their shipping logistics.

A big part of reducing the costs ends up in the final mile delivery process. To survive in the market and earn considerable profits, it must find ways to improve efficiency in this area. 

The last-mile delivery process is transporting goods from a transportation hub or warehouse to their final delivery destination. In most cases, that final destination is the customer’s doorstep.

When customers get ‘out for delivery’ text on their phones, they want to get the product as soon as possible. The last mile shipping is the most critical process in the delivery system. The business will want that the last part is done efficiently and quickly because it ensures safe delivery and a good customer relationship with the company. 

The continually increasing consumer demand for speedy shipping, especially in e-commerce, food, and retail industries, happens to be the most expensive leg of the journey.

There are the following steps for the last mile delivery process:

Orders are digitally entered into a centralized system: Orders and requests are monitored both by the sender and the end recipient.

Orders arrive at the transportation hub and await delivery to their end recipient: The courier should be delivered to the customer quickly and efficiently. 

Orders are designated to delivery personnel based on routes and recipient addresses: Strategically sorted and designated parcels are important for a cost-effective delivery last-mile logistics solution.

Orders are scanned before being loaded onto delivery vehicles: Updates the status of the order for the sender, as well as to the end recipient tracking the shipment.

Orders successfully reach the end recipients, and proof of delivery is obtained: The parcel arrives at the destination, and the personnel updates the tracking information accordingly to verify and confirm the completed delivery. 

Since last-mile delivery is so important for a business, it needs to decide whether to operate. In-house or outsource their parcel delivery to a third-party logistics provider. The choice will depend on various factors, including the company’s size, scope, and strategy for the future.

Inhouse last-mile logistics: 

In this choice, the business will have to own the entire order fulfilment from end-to-end, including inventory management, warehousing, delivery to the customer, and, optionally, reverse logistics (returns).

The pros and cons of inhouse logistics are as follows:

Pros: 

  • When handling all the logistic operations yourself, you have complete control over the whole process that ensures that the customers have a pleasant shipping experience.
  • The in-house logistics provide a better understanding of your company’s goals, values, systems, and expected levels of communication. This also makes it less likely that information gets lost or that there are cases of miscommunication.

Cons:

  • The biggest disadvantage comes with the cost. The cost might include Owning and maintaining in-house fleets, bearing the warehousing and hiring, training, and paying warehouse, shipping, and supply chain personnel costs. In addition, buying, implementing and maintaining all information technologies and logistics solutions needed to run the operation are also very costly.
  • With costs also comes accountability. When you have complete control over your supply chain, you might have to take responsibility for any issue that may arise.

Outsourcing your first-mile shipping to a 3PL comes with several advantages. Compared to in-house, outsourcing is much more cost-effective. Neither do you have to invest in staffing or owning warehouses, nor will you have to buy and maintain a private fleet. Over 75 percent of businesses partner with an outsourcing company for logistics. If your business is considerably growing, it can adjust the scale of your shipping higher or lower at a moment’s notice, ensuring no wasted resources or disruptions.

When you tie up with third-party logistics providers, they will wish to see your business succeed. To that end, professional 3PLs will go out of their way to design, create, and implement a mutually beneficial shipping strategy.

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