What is Last Mile Delivery?

Quick Summary:

Last-mile delivery is the final stage of getting goods to customers, often from a local depot to their home or business. It’s the most complex and costly part of the supply chain. This article explores what last-mile delivery is, why it’s challenging, and how companies can improve it using technology, customer engagement solutions, and smart logistics planning.

What is Last Mile Delivery?

Last-mile delivery refers to the final leg of a shipment’s journey, usually from a local distribution centre to the customer’s doorstep. This could be a home, retail store, or business address.

Common Examples:

Parcels delivered to homes by vans or cars
Bulk shipments to business premises via heavy goods vehicles (HGVs)

Steps of Last Mile Delivery

Once the customer has placed their order, the goods make their way to the final warehouse, where the last mile begins.

Order Fulfilment: Orders are processed from the receipt of goods (including cross-docking) through to preparation for delivery.
Picking and Packing: The order is prepared in the warehouse, laying the foundation for on-time delivery.
Loading and Dispatch: Shipments are organised to prepare for efficient dispatch.
Routing and Navigation: Delivery routes are planned manually or optimised automatically with route optimisation software.
Delivery Execution: Drivers use mobile delivery tools such as navigation, barcode scanning, digital signatures, and photo capture to ensure accurate and verifiable handovers, generating a proof of delivery.
Customer Handover: The package is handed over to the customer or may be left in a safe place or designated area.

Why is Last Mile Delivery Challenging?

The last mile is the most unpredictable and expensive part of the logistics chain.

Factors that complicate it include:

Urban congestion: HGVs may not be practical in cities, read about the urban logistics challenge.
Rural distance gaps: Deliveries in rural areas require more travel time and fuel between stops.
Multiple stops: Inefficient routing increases time and cost.
Customer availability: Missed deliveries reduce first-time success rates.

Discover more about last mile solutions.

What is the "Last Mile Delivery Problem"?

Efficiency is the core challenge for any last-mile delivery operation. Deliveries often require numerous stops with varying distances between them. If delivery density is low (few deliveries in a given area), then cost per delivery will rise.

During the pandemic, demand surged, exposing inefficiencies. Even now that life has returned to normal, online sales account for over 26% of retail sales and fewer people work from home. This highlights the continued importance of improving last-mile logistics.

How Has Technology Improved Last Mile Delivery?

Advanced software is transforming how businesses manage last mile delivery.

Benefits include:

Route optimisation to reduce mileage and fuel costs.
Real-time vehicle tracking for visibility using telematics.
Digital proof of delivery for accountability.
Automation of customer notifications for their deliveries (email/SMS).
SaaS platforms for scalable, cloud-based management.
The use of AI and Machine Learning in route optimisation.

These tools not only improve efficiency but also enhance customer satisfaction and improve sustainability.

How to Improve Customer Experience During Last Mile Delivery

Poor communication causes stress and missed deliveries.

Fix this by:

Providing accurate delivery windows (Delivery scheduling).
Sending automatic updates (order tracking) (e.g., SMS/email alerts).
Offering portals for customers to reschedule or leave instructions (customer engagement).

Improving communication with customers improves first-time delivery rates and reduces operational friction to save money.

Negative delivery experiences can lead to lost sales and brand reputation damage.

Real-time, transactional feedback helps businesses:

Respond to problems quickly.
Praise drivers and staff for excellent service.
Identify process improvements.

Engaging customers post-delivery builds loyalty and provides actionable insight.

Last Mile Delivery Best Practices for the Future

To optimise your last mile operations:

Use AI-driven route optimisation tools.
Offer flexible delivery options.
Capture real-time customer feedback.
Emphasise sustainability in delivery choices – read the Descartes Sustainability Report.

These strategies help reduce costs, increase customer retention, and future-proof your logistics.

Example of Successful Last Mile Delivery

Stop Start has a vehicle fleet of around 70 vehicles executing around 1200 new and unique deliveries daily. Prior to deploying Descartes’ technology, the manual route planning process would take three employees over four hours each day.

Descartes’ route planning and optimisation solution enabled Stop Start to decrease its daily route planning time by over 75%.
Once an order has been placed, customers benefit from real-time notifications and tracking to increase delivery success.
Electronic proof of delivery has reduced paper usage by around 750,000 pieces per year across the business.

Last Word on the Last Mile

Often seen as a logistical hurdle, the last mile is a critical opportunity to impress customers, differentiate your brand, and drive operational efficiency.

With the right combination of advanced route planning tools, real-time visibility, and proactive customer engagement, businesses can overcome the complexity and cost of the last mile.