The “Last Mile” is a term used to describe the final process of a delivery. In other words, when the goods leave the warehouse, or other logistics hub, on their way to being delivered to the private customer.
Attempting to streamline and perfect the Last Mile has, according to Edwin Lopez of Supply Chain Dive, “an age-old question” for the delivery industry.
The Last Mile is often pinned as the most inefficient and costly segment of the entire logistical journey.
To explain why, let’s back track to the beginning of the whole process.
Let’s say some leather boots at being purchased.
The shoemaker makes the shoes from leather and a whole bunch of other materials. When they’re finished, these boots are shipped off to the shoeseller. This B2B journey could take minutes or days: the businesses could be across the street from one another, or on the other side of the planet.
When that journey is made, the shoeseller will receive the box of shoes. That box of shoes will come with hundreds, possibly thousands, of other boxes of shoes at the same time. A truck will come in, hand them over at once, and then go on its merry way.
Now, the nature of the delivery changes. A customer has purchased one pair of leather shoes from the shoeseller’s online store. They’ve done so with their credit card, and have received or will receive a communique telling them how to track their job.
The shoeseller will now proceed to send those goods onwards to the customer – now the journey becomes B2C.
As Lopez said above, businesses have had a hard time figuring out the best way for this process. Some brands own and manage their own warehouses, but many contract the entire storage and dispatching process to a third-party. These third-party logistics businesses are inventively called 3PLs.
Depending on the business model, and the geography of the delivery, the Last Mile may start as soon as the truck leaves the shoeseller’s warehouse, or it may start in a few hours’ time after the goods have been sent on to another delivery hub.
Eventually, there’ll be a section of the delivery in which the final destination is the customer – usually a residence.
Problems arise here because of the difference between B2B relationships and B2C relationships.
Businesses are profit-driven entities, focussing on such things like efficiency, and as a result, are centralised and incredibly systematic. Furthermore, logistics businesses do the best they can to be located at transportation hubs (i.e. airports, seaports, highway intersections).
Customers, on the other hand, are dispersed, their properties usually taking up a quarter-acre block. Far from being profit-driven, the customers are convenience-focussed. They prefer the delivery driver to haul their purchased packaged (heavy or not) to their front door, past the steep driveway, and past the snarling hazard they call their pet dog.
The difference in expectation and operation between these two stakeholders is the number one reason the Last Mile is such a difficult hurdle for logistics businesses to overcome. Efficiency is dragged through the mud.
However, with the advent of digital technology and online shopping, the difficulties associated with the Last Mile are slowly being solved once and for all.