Last Mile Delivery Explained: what it is, how it works, and challenges involved

Last Mile Delivery Explained

As more and more freight makes its way directly to the front doors of consumers throughout Australia and the world, the more important last mile delivery is becoming.Last mile delivery is the point at which freight goes from a transportation hub to its final destination, which is usually someone’s front door. In this article, we’re going to look at how it works, and what the future of last mile delivery is as consumers demand an improved last mile delivery experience.

What is Last Mile Delivery?

Last mile delivery is the component of freight delivery that happens when an individual parcel or carton travels from the nearest freight depot to a home, office or other end destination.

Last mile delivery is usually completed by a different carrier from the one that transports freight from your warehouse location to an interstate depot or overseas.

How Does Last Mile Delivery Work?

Distribution of products via freight usually happens in bulk. A manufacturer will send volume freight to suppliers, such as a retailer or smaller distributor.

To do this, they’ll engage a large freight carrier, and the goods will be packaged in pallets. The freight carrier will collect the pallets from the manufacturer or distributor, and then transport the goods on what is known as the long leg.

For example, let’s say the long leg is from Sydney to Melbourne. When the freight gets to Melbourne, the pallets will be broken down into smaller packages. These smaller packages might be split by suburbs and transported again to the north, south, east and west of Melbourne.

This is when it’s usually picked up by a last mile delivery carrier.

You can’t have a huge B-double truck delivering small packages directly to front doors. Instead, it will get broken down again onto a smaller two-ton truck, a van or even a motorbike.

And that is the last mile delivery.

Last Mile Delivery is Booming

With the continuing boom in online delivery, we’re seeing a huge volume of freight that’s now being delivered directly to people’s doorsteps.

This is in turn, creating a massive boom in last mile delivery.

Not only are consumers having parcels delivered from warehouses, retailers are choosing to fulfill online orders from customers by dispatching stock directly from the nearest store, instead of from their distribution centre.

How Last Mile Delivery is Changing

When it comes to last mile delivery, customer expectations are high.

We’re expecting our parcels to come straight away, and last mile delivery has had to adapt to meet consumer demand.

But what does this look like exactly?

Multiple Carriers

To be able to deliver the level of customer service consumers are demanding from last mile delivery, retailers are using multiple carriers.

We’re seeing a boom in on-demand carriers like Zoom2u or GoSherpa, and there are lots of start-ups getting traction in what we like to call the social courier – mums and others in local communities who can make some extra cash by dropping off parcels on their way home from a shipping trip.

More Consumer Control

Thanks to improved technology and the rise of the internet of things, consumers will see more reliable last mile delivery thanks to increased delivery control.

Consumers will be able to choose when it’s delivered and where to, by using GPS to pinpoint an exact location as to where they’d like their delivery to be left.

For example, if the freight recipient won’t be home during the day, they can opt to have their delivery left in an exact place so they can find it easily. They’ll even be able to dictate the time they want it delivered, so they can be home to receive it.

There’s a real shift coming in terms of consumer control, and freight carriers are going to have to catch up.

The Subscription Model

Improvements in last mile delivery are already paving the way for subscription freight models (and we’re already seeing this in the US).

More and more products will be able to be ordered on subscription, where consumers will be able to set and forget. Your toothpaste, shampoo and beauty products will turn up just as you’re about to run out.

Parcel Collection Points

We think in the future, we’ll see mini suburb-based parcel hubs, or parcel collection points.

These might even be hubs underneath apartment buildings, where you’ll have Amazon in the basement and everyone in the building will be able to collect their Amazon parcels from that centralised location.

And these collection points will also be driven by the uptake of things like the subscription model.

How You Can Optimise the Last Mile Delivery Experience

If you’re dealing in a business to consumer market, then it’s time to start treating last mile delivery as an essential part of your customer experience.

To be able to deliver this experience, you’re going to need to put some key elements in place in your supply chain management process.

Using Reputable Carriers

You’ll need reputable carriers that can deliver Australia-wide coverage, with lots of volume capacity and the ability to fluctuate your freight needs up and down with the market.

We saw throughout the COVID-19 pandemic that Australia Post was under a lot of pressure, and this pressure flowed through to last mile delivery. You need more than one carrier in order to minimise risk while maximising the end user experience.

Technology

An exceptional last mile delivery experience can’t be achieved without a commitment to technology.

You’ll want to access carriers who are tech-savvy. Customers are demanding real-time notifications and the ability to control their delivery, and you won’t be able to achieve this without the right technology.

How Freight People Can Help

If you’re wanting to optimise your last mile delivery freight experience, then we can help.

Freight People’s freight management system, Cario, gives you one platform to manage not only your interstate freight, but also your local courier.

This means you can have access to plenty of last mile delivery carrier options, without having to change your business processes.

Your team don't have to learn to use new platforms or switch to a different booking system. Whether you’re booking your freight with Australia Post or Toll, you can do it all from the one place.

When you work with us for your last mile delivery freight, you’ll also get access to our specialist support. We’ve got decades of experience in freight and logistics and can give you reliable, independent advice that will optimise your carrier mix for last mile delivery and beyond.