Last-mile delivery (also known as final mile) is the area of transportation management that focuses on getting packages through the last leg of the shipping journey in the supply chain: from a transportation hub to its final destination. That final delivery destination is most often a personal residence, although sometimes it can be a commercial business.

Why is Last-Mile Delivery So Important? 

Last-mile logistics has become a popular area of interest for e-commerce businesses due to the growing demand for integrated omnichannel fulfillment and the on-demand culture of online shopping. The speed and efficiency of an e-commerce brand’s shipping is a key differentiator. Businesses are now required to get products to doorsteps as fast as possible to stay competitive. 

Here are the top four ways to improve your last-mile delivery capabilities. 

1. UNDERSTAND THE DIFFERENCE BETWEEN FREIGHT PROVIDERS AND HOW THEY HANDLE THE LAST MILE

There are many differences between freight providers. Very simply, they can be divided into two categories:

• asset-based freight carriers (FedEx, UPS) who own all their equipment and infrastructure and are responsible for packages from end-to-end. 
• non-asset-based carriers (DHL, Pitney Bowes) who do not own all the infrastructure to get packages all the way to the end-customer; they hand packages off to USPS or other regional carriers to finish the “last mile.”

How these providers handle the last mile comes with significant benefits and drawbacks. The three main perks of asset-based carriers include:

1. Price and quality consistency. By managing the entire shipping journey, asset-based carriers have more reliable service which leads to higher levels of customer satisfaction.
2. Greater transparency in tracking. With an asset-based carrier, there will be no hand-offs (except for UPS SurePost and FedEx SmartPost), so the tracking is all under one company.
3. Multiple services offered. Asset-based carriers are more likely to provide multiple types of services, like drop shipping, intermodal freight, and integration with a 3PL.
4. Increased speed. Since asset-based carriers may “handoff” their packages to another provider, their processes can increase the speed at which they are delivered.

Some benefits of working with non-asset-based providers include: 

1. Lower overall costs. Generally speaking, non-asset-based carriers won’t need to charge you extra to pay for the overhead costs of infrastructure and gear. They don’t have as much and in turn their base transportation fees may be a bit leaner.
2. Specialized services. Some offer services that other, larger carriers may not, including but not limited to white glove delivery, bulky items, alcohol and firearms, or custom delivery solutions.

2. KNOW WHICH SHIPPING SERVICE BEST FITS YOUR BRAND AND YOUR PRODUCT 

Knowing the ins and outs of the service you choose will help you better understand how your shipments are getting to customers.

For example, there are some exceptions to the division of asset-based carriers. Both UPS and FedEx have services—SurePost and SmartPost respectively—that use USPS for some or all their last mile of delivery. This needs to be considered if you want the continuity of a single carrier taking your package the entire shipping journey. 

The two factors that should determine the shipping service you choose are your product type and your customer needs.

• Product type will drive the weight and dimensions of your packaging, which are key factors in shipping costs. 
• Customer needs will determine shipping service needs in the following ways: where customers are located (rural areas will require special service types), speed of delivery (will your customers expect a delivery immediately?). 

Other aspects of shipping that you’ll want to consider include Saturday service, special handling, or signature required. 

3. IMPROVE DELIVERY EXPECTATIONS FOR YOUR CUSTOMERS

That last mile is all about your customers. And what do customers want the most? They want to know where their order is and when it will arrive. Here are a few ways to enhance your customer’s experience:  

• Shipment tracking. Work with a carrier that excels at tracking. There will be anomalies, but they should be rare. Some third-party companies can set up automated emails to go real-time to your customer when their package hits certain milestones, such as Order Fulfilled, Shipment En Route, or Shipment Out for Delivery, etc.  
• Give accurate predictions. By tracking the average delivery transit time of your carrier throughout the year, you can give your customers better predictions for their delivery window. For example, as e-commerce volume has skyrocketed, shipping carriers have struggled to keep up with demand. 
• Simplify your shipping options. No matter the shipping service you use (overnight, two-day, ground, etc.) or the strategy you employ to incentivize buyers to smash that “Order” button (free shipping, expedited shipping, etc.), the number one factor in keeping your customers satisfied at checkout is clear communication. The same goes for returns—make them super easy to execute. 
• Make it personal. If you can focus on improving delighting your customers with a memorable unboxing experience (quality fulfillment, branded packaging, cool inserts, and Instagram-worthy flair) then they may forgive any shipping delays. It’s no guarantee but depending on your audience it could work for some. 

Another important delivery metric you shouldn’t look past is your carrier’s claims ratio. Before signing a contract with a carrier, it’s important to know how often they deal with claims. These are filed by end-customers when their package is lost, stolen, mishandled, or broken. If your carrier’s claims ratio above 1%, that’s a red flag and you should look elsewhere for shipping service. If you frequently ship LTL, claims come into play more often than other types of freight shipping.

4. DETERMINE HOW YOU WANT YOUR PACKAGES TO ARRIVE

The last-mile delivery service you choose will determine how your customer receive your products. This is a huge factor in customer service and satisfaction. Here are the major considerations when deciding on the last-mile service you choose: 

Customer Service – Who will hand your package off to the customer? Some last-mile delivery options include crowdsourced services like Postmates and Uber. How will it affect your brand if that delivery person is rude? You entrust a lot with the last-mile carriers, make sure it’s the right fit for your brand. 

Branded Boxes – What’s your number one priority for your customer’s experience. Do you want brand recognition on each doorstep? Or are you okay blending in with the other brown boxes? If you outsource last-mile delivery to a company like Amazon, your products will be fulfilled in Amazon branded packaging. If this is a deal-breaker for you, there are other options that will allow you to customize your packaging. 

Consider your fulfillment strategy when choosing your last-mile delivery service. If direct-to-consumer is your main fulfillment strategy, you’ll need to get your last-mile strategy straight as it will really affect your customers. With retail and B2B fulfillment, there is less of a need to focus on the last mile.

Author’s Bio

Brian Tu, chief revenue officer at DCL Logistics, brings more than 20 years of sales and operations experience and now leads DCL’s sales, marketing, IT, and client service areas. He joined DCL from the digital media industry, most recently from Medium, where he ran their revenue operations business.

DCL Logistics provides hassle-free fulfillment for high-growth brands. Their 40 years of operational expertise make them the top provider for household name brands such as GoPro, Magic Spoon, Therabody, Cisco, and many others. Their full suite of fulfillment services allows brands to scale without sacrificing flexibility, quality, or customer satisfaction. Learn more at dclcorp.com.