Planning for peak season started months ago, but now it’s crunch time. Peak season is stressful for shippers because it can make or break their year. Consumers start thinking about the holidays earlier and earlier every year. Holiday décor is prominently displayed before the last Halloween ghost has vanished. And customer expectations for fast and flexible delivery are higher than ever. This time of year, the focus and scrutiny are on the final mile delivery of the goods to the consumer. When planning last-mile delivery, shippers have to balance the challenges of increased volume, labor capacity, and operational costs to make the season a success for their customers and for themselves. Having the right plan and technology for last-mile delivery can help shippers navigate successfully through peak season to make sure they are delivering cost-effectively and maintaining a high level of customer satisfaction.
Obstacles for Last-Mile Delivery in Peak Season
Volume of orders: During peak season, retail shippers typically experience a significant increase in order volume. This surge can range from 30% to 50%, depending on various factors such as the industry, region, and specific consumer trends. The peak season is usually defined as the period from October through December, encompassing major shopping events like Black Friday and Cyber Monday.
Labor shortages: To handle the increased order volume, many retail shippers implement a flexible workforce by leveraging temporary staff, freelance workers, and part-time employees to scale their operations quickly. Collaborating with Third-Party Logistics Providers (3PLs) can provide additional resources and expertise to handle increased demand.
Congestion and Weather Disruptions: Traffic congestion means delivery vehicles often face road closures, parking restrictions, and bottlenecks, making it difficult to maintain timely deliveries. Weather such as snowstorms, heavy rain, and extreme temperatures can also disrupt delivery schedules. Poor weather conditions can lead to hazardous driving conditions and an increased risk of accidents, all of which contribute to delays.
Transportation costs: Despite being the shortest leg of the supply chain, the last-mile is often the most complex, expensive, and time-consuming due to traffic congestion, route inefficiencies, and the need for precise, timely deliveries. In fact, last-mile logistics accounts for 41% of all transportation costs.
How can a last-mile technology solution help?
The term “last-mile” (also known as “final-mile”) refers to the final step of the delivery process in logistics and supply chains. This is when a product moves from a distribution facility or store to its final destination, typically the customer’s doorstep. This delivery stage directly impacts customer satisfaction and the overall delivery experience. As e-commerce goes hand in hand with supply chains, businesses deploy last-mile delivery software to optimize logistics operations and reduce transportation expenses. Here are some ways that a last-mile technology solution can help alleviate peak season pressure for shippers.
Carrier capacity: Shippers can scale their delivery fleet to manage the increased volume of deliveries. Companies can supplement their fleet with temporary drivers or partner with third-party delivery services to extend their capacity. Platforms that connect businesses with freelance or gig economy drivers can help scale shippers’ delivery operations during peak times. This provides flexibility and allows shippers to meet customer demand without the long-term cost of maintaining a large fleet. By scaling their capacity, shippers gain access to a larger fleet while minimizing the logistical strain on their business.
Advanced Route Optimization: Efficient route planning is critical for optimizing last-mile delivery. Optimizing delivery routes ensures drivers take the most efficient paths, reducing fuel costs and saving time. Using advanced route optimization with AI and machine learning, businesses can automatically calculate the most potentially successful routes based on traffic, weather, delivery locations, and vehicle capacity. Last-mile routing algorithms minimize travel time, reduce fuel consumption, and lower operational costs.
Notification of Unexpected Delays and Dynamic Replanning: Even when jobs are already underway, the unexpected can still happen. Last-mile technology solutions can notify shippers of potential delays and utilize real-time route adjustments to handle unexpected changes, such as last-minute customer requests or road closures. Keeping routes flexible allows shippers to make quick decisions to keep deliveries on track to meet the customer’s delivery timeline.
Managing the Work of Last-Mile Delivery: Automating key tasks, from order processing to dispatching, can help shippers manage high volumes more effectively. With automated dispatching, shippers can assign deliveries to drivers based on location, vehicle capacity, and route optimization. This ensures that each driver is assigned the most efficient deliveries, reducing downtime and increasing productivity. Automated notifications keep customers informed about their order status, delivery window and tracking information, reducing the need for manual communication with the logistics team. Analytics can provide valuable insights into delivery performance, driver efficiency, and customer satisfaction. This data lets shippers make informed decisions to improve delivery operations in real-time.
Direct Customer Shipment Visibility: Last-mile technology solutions that provide customers a direct link to their shipment information, improve the customer experience, minimize the number of queries handled by the logistics team, and reduce the amount of failed delivery attempts. If customers can access real-time information about their delivery, they are more understanding of delays. By offering real-time updates on order status, estimated delivery times, and driver locations, shippers build trust with customers. When customers can track their orders themselves, they are less likely to contact customer service, reducing the strain on your support team and allowing them to focus on more pressing issues. Customers know when their package will arrive, making them more likely to be available to receive the delivery, reducing the chances of failed delivery attempts and the additional costs associated with rescheduling.
Customer Satisfaction: Visibility, transparency, traceability, and accountability in shipment delivery should be top of mind as shippers strive to fulfill promises to customers during peak. Meeting a customer’s expectation regarding last-mile delivery is directly related to shippers increasing the average order value and lifetime value of their clients. Delivering with speed, precision, and flexibility is imperative for shippers.
Last-mile delivery management during peak season is stressful for shippers, but with the right strategies, they can relieve the pressure, keep their customers delighted, and optimize their peak season success. By focusing on route optimization, staying agile and proactive in cases where possible delays are identified, and utilizing real-time tracking, shippers can come out on top.
Nicole Hudson is Director, Product Marketing at e2open
Last-Mile Delivery During Crunch Time
Planning for peak season started months ago, but now it’s crunch time. Peak season is stressful for shippers because it can make or break their year. Consumers start thinking about the holidays earlier and earlier every year. Holiday décor is prominently displayed before the last Halloween ghost has vanished. And customer expectations for fast and flexible delivery are higher than ever. This time of year, the focus and scrutiny are on the final mile delivery of the goods to the consumer. When planning last-mile delivery, shippers have to balance the challenges of increased volume, labor capacity, and operational costs to make the season a success for their customers and for themselves. Having the right plan and technology for last-mile delivery can help shippers navigate successfully through peak season to make sure they are delivering cost-effectively and maintaining a high level of customer satisfaction.
Obstacles for Last-Mile Delivery in Peak Season
Volume of orders: During peak season, retail shippers typically experience a significant increase in order volume. This surge can range from 30% to 50%, depending on various factors such as the industry, region, and specific consumer trends. The peak season is usually defined as the period from October through December, encompassing major shopping events like Black Friday and Cyber Monday.
Labor shortages: To handle the increased order volume, many retail shippers implement a flexible workforce by leveraging temporary staff, freelance workers, and part-time employees to scale their operations quickly. Collaborating with Third-Party Logistics Providers (3PLs) can provide additional resources and expertise to handle increased demand.
Congestion and Weather Disruptions: Traffic congestion means delivery vehicles often face road closures, parking restrictions, and bottlenecks, making it difficult to maintain timely deliveries. Weather such as snowstorms, heavy rain, and extreme temperatures can also disrupt delivery schedules. Poor weather conditions can lead to hazardous driving conditions and an increased risk of accidents, all of which contribute to delays.
Transportation costs: Despite being the shortest leg of the supply chain, the last-mile is often the most complex, expensive, and time-consuming due to traffic congestion, route inefficiencies, and the need for precise, timely deliveries. In fact, last-mile logistics accounts for 41% of all transportation costs.
How can a last-mile technology solution help?
The term “last-mile” (also known as “final-mile”) refers to the final step of the delivery process in logistics and supply chains. This is when a product moves from a distribution facility or store to its final destination, typically the customer’s doorstep. This delivery stage directly impacts customer satisfaction and the overall delivery experience. As e-commerce goes hand in hand with supply chains, businesses deploy last-mile delivery software to optimize logistics operations and reduce transportation expenses. Here are some ways that a last-mile technology solution can help alleviate peak season pressure for shippers.
Carrier capacity: Shippers can scale their delivery fleet to manage the increased volume of deliveries. Companies can supplement their fleet with temporary drivers or partner with third-party delivery services to extend their capacity. Platforms that connect businesses with freelance or gig economy drivers can help scale shippers’ delivery operations during peak times. This provides flexibility and allows shippers to meet customer demand without the long-term cost of maintaining a large fleet. By scaling their capacity, shippers gain access to a larger fleet while minimizing the logistical strain on their business.
Advanced Route Optimization: Efficient route planning is critical for optimizing last-mile delivery. Optimizing delivery routes ensures drivers take the most efficient paths, reducing fuel costs and saving time. Using advanced route optimization with AI and machine learning, businesses can automatically calculate the most potentially successful routes based on traffic, weather, delivery locations, and vehicle capacity. Last-mile routing algorithms minimize travel time, reduce fuel consumption, and lower operational costs.
Notification of Unexpected Delays and Dynamic Replanning: Even when jobs are already underway, the unexpected can still happen. Last-mile technology solutions can notify shippers of potential delays and utilize real-time route adjustments to handle unexpected changes, such as last-minute customer requests or road closures. Keeping routes flexible allows shippers to make quick decisions to keep deliveries on track to meet the customer’s delivery timeline.
Managing the Work of Last-Mile Delivery: Automating key tasks, from order processing to dispatching, can help shippers manage high volumes more effectively. With automated dispatching, shippers can assign deliveries to drivers based on location, vehicle capacity, and route optimization. This ensures that each driver is assigned the most efficient deliveries, reducing downtime and increasing productivity. Automated notifications keep customers informed about their order status, delivery window and tracking information, reducing the need for manual communication with the logistics team. Analytics can provide valuable insights into delivery performance, driver efficiency, and customer satisfaction. This data lets shippers make informed decisions to improve delivery operations in real-time.
Direct Customer Shipment Visibility: Last-mile technology solutions that provide customers a direct link to their shipment information, improve the customer experience, minimize the number of queries handled by the logistics team, and reduce the amount of failed delivery attempts. If customers can access real-time information about their delivery, they are more understanding of delays. By offering real-time updates on order status, estimated delivery times, and driver locations, shippers build trust with customers. When customers can track their orders themselves, they are less likely to contact customer service, reducing the strain on your support team and allowing them to focus on more pressing issues. Customers know when their package will arrive, making them more likely to be available to receive the delivery, reducing the chances of failed delivery attempts and the additional costs associated with rescheduling.
Customer Satisfaction: Visibility, transparency, traceability, and accountability in shipment delivery should be top of mind as shippers strive to fulfill promises to customers during peak. Meeting a customer’s expectation regarding last-mile delivery is directly related to shippers increasing the average order value and lifetime value of their clients. Delivering with speed, precision, and flexibility is imperative for shippers.
Last-mile delivery management during peak season is stressful for shippers, but with the right strategies, they can relieve the pressure, keep their customers delighted, and optimize their peak season success. By focusing on route optimization, staying agile and proactive in cases where possible delays are identified, and utilizing real-time tracking, shippers can come out on top.
Nicole Hudson is Director, Product Marketing at e2open
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