What is Last Mile Logistics?

Posted: 22nd October 2018 09:32

The phrase last mile logistics is cropping up all over the place in business magazines and blogs. If you’ve seen this term but aren’t quite sure what it applies to, then we’re here to help. We’ll be defining this term so that you can further understand how it impacts the business ecosystem.

The Definition of Last Mile Logistics

The meaning of last mile logistics can be a bit confusing, as it doesn’t actually apply to a set distance or location. Rather, it’s more about the last step in the supply chain – whether that takes a mile or much longer! This often refers to how the package gets from the distribution centre to the end user, whether this is by a courier or logistics company.

This is a growing sector, as more companies are shipping and requiring their products to arrive on time. With more complex challenges within this market come more innovative logistical partners that can solve these issues. Rajapack interviewed two very different companies to get their take on their last mile logistics process. Both reported that better transparency and last mile logistics effectively pre-empted many customer complaints.

The Challenges of the Sector

As consumers, we want our products to be delivered faster than ever, even on the same day. This is a major consideration for buyers, as they don’t want to be kept waiting for a product. Speedy delivery and good logistical links are what makes this possible. Logistics wise, this requires a network of couriers ready to pick up and drop off parcels multiple times each day.

This is where we’re seeing more logistical companies diversifying their business model. Simply employing drivers is unfeasible for many of these companies, so they opt to use a model of self-employed drivers being paid for each drop that they make. This gives their model the scalability and flexibility to respond to market demand.

Responding to the demand is one thing, but the quality of the delivery also has to be kept high. Though the model has been diversified to include outside partners, there still has to be a regulation in place to ensure that they are following procedure. Timely deliveries and tracking must be adhered to, otherwise the end consumer will suffer.
If the end user suffers, they have a poor customer experience. Although this isn’t the fault of the dispatcher, it can be enough to discourage their use of the service long term. Without the adequate checks and balances in place, businesses can lose out depending on their choice of last mile logistics.

In an ideal world, these couriers would all arrive on time with the parcel fully intact, but this just isn’t the case. This can be a bug bear for businesses that spend big money on attracting these customers, only to lose them in the last mile.

We hope that you now have a better understanding of this sector and how it has an impact on business. It’s a phrase that will be sure to reach a wider audience within the next few years.