5 Key Steps to Optimize Across Modes for Last-Mile Delivery

In the wake of the e-commerce boom, shippers and logistics service providers are experiencing unprecedented levels of customer demand. In theory, that’s a real boon. But for companies still operating around manual processes, it’s an uphill battle to manage newfound complexities around inconsistent rates, tight capacity, and short delivery time windows. Parcel management has its own intricacies, such as factoring zones and dimensional weight into the price tag. 

As Business-to-Consumer (B2C) omnichannel e-commerce continues to grow, being able to optimize across modes for last-mile delivery will help brands and shippers gain competitive advantage. From fast and smart rate shopping to calculating time in transit, here are the key capabilities that will help your team maximize performance and minimize costs.

1. Automate rate shopping

Logistics professionals typically review pending shipments from their ERP or WMS to narrow down available carrier options and rates against delivery dates and other selection criteria. The process is tedious and time-consuming, often involving multiple carrier sites and 

lengthy parcel rate guides that break down every detail of cost criteria across multiple pages. 

Automated rate shopping that factors time in transit saves logistics teams on time and cost by centralizing data. Users can either actively rate shop across all carrier options in one platform, or they can let the system do it for them. The automated process uses smart business rules that factor the service levels, parcel carriers being used, and delivery deadlines to instantly select the best, most cost-effective option for each individual order.

2. Factor constraints and exceptions

Optimizing shipments may require greater considerations around whether to go less-than-truckload (LTL) or parcel, as well as how to accommodate unexpected changes. For instance, if a new shipment comes in that pushes the total over the weight break for parcel, it will have to be an LTL or pallet delivery. From a labor perspective, that can mean hours of set-back as teams stop what they’re doing to redo work, manually consolidate, and reship orders. Smart automation can optimize parcel against LTL in milliseconds.  

In the case of exceptions, such as a missed pick up or carrier delay, logistics teams must check the agreed upon SLAs, determine whether the setback puts them at risk of a late delivery, and decide whether they’ll need a next-day service for On Time In Full (OTIF) delivery. Smart automation takes all these factors into account against all available resources to ensure teams make fast, confident decisions.

3. Streamline high volume and international orders through order consolidation

Being able to make quick decisions without manual intervention unless necessary is especially critical for brands that ship at high volumes, as well as across zones or internationally. Retailers, distributors, manufacturers, and logistics service providers operating at incredibly high volumes, at millions of shipments a day, can no longer afford to manage the load manually. 

Smart order consolidation allows you to optimize against LTL and parcel. If you have multiple parcels, supply chain software will automatically search for the best fulfillment opportunity, choosing an LTL carrier over parcel when it’s less expensive but will still deliver orders on time. If multiple parcels are headed to the same address and meet the weight threshold, teams can save on cost by shipping and tracking all the parcels via an LTL carrier. When dealing with large quantities, the cost savings becomes exponential.

4. Enable fast decision-making 

Efficiency comes down to how quickly complex decisions can be made. What are the carrier service levels? Should an order be next day air delivery or can it go ground? What type of materials are being transported? Are they hazardous? Logistics teams often defer to a preferred carrier. But if they were to look at the bigger picture across all options, they might find that that carrier is not ideal because they aren’t always the cheapest or offer the best service level. 

By automating the carrier selection and route optimization process, all the different variables across constraints, requirements, and service level agreements across all zones can be factored into near-instant decisions that are often more advantageous. 

For example, it’s common for logistics teams to routinely select the fastest options like next-day air to ensure orders get to customers on time. But this is always going to be the most expensive option, and unnecessary if there’s no rush. Automating the selection process using smart business rules will enable teams to instantly select the best options for any given scenario, which might be next-day air for expedited orders or a ground carrier that can deliver packages on time and at a much better rate for orders with longer lead times.

5. Leverage analytics for continuous improvement

Fast decisions also need to be good ones. Even the best parcel management technology is only as good as the options it has to choose from. Access to detailed logs gives logistics managers and directors the ability to audit why certain carrier selection decisions were made. Also, managers can use analytics to track growing demand. If they see new shipment activity from zones or regions their current carriers don’t support well, they can start exploring new carrier options in advance and onboarding them quickly to optimally support that growth.

Do it all on one platform

These five steps are facilitated by using a transportation management platform that enables automated and optimized supply chain execution across all modes, including parcel and returns management, for continuity across the entire order lifecycle. Through API connections, the platform should automate the rate shopping work for you, providing valuable rate, service, and transit time information from diverse LTL, Truckload, and Parcel carriers directly in the system. It should also leverage real-time analytics to measure partner and execution performance for continuous improvement.

Rebecca Parrish is a Business Consultant at MPO.