The Best Software To Manage Last-Mile Logistics

The last few miles a delivery takes from facility to recipient might just be the most essential part of a delivery journey. People are prepared to pay premiums to get their package delivered in a day, with customer loyalty increasing for businesses that meet these deadlines. Amazon invested in their last-mile logistics heavily in 2020, with many large retailers following suit.

 

What is last-mile logistics?

What is last-mile logistics?

Last-mile delivery (or logistics) refers to the final few miles a package takes between a distribution centre and the customer. It could be one-mile (if the customer lives one-mile away from the facility) but the delivery distance is frequently over 50 miles or more. Unlike the middle-mile, which traditionally only impacts larger retailers and producers, the last-mile of a delivery affects everyone, as all goods need to get to the customer.

Costs for those final miles can reach over 50% of the total cost of delivery, and also carry the highest risk of business loss. If a customer pays a premium and the delivery doesn’t arrive on time, the last-mile can cost the producer the whole order.

Who is involved in last-mile logistics?

The last-mile can impact everyone in the supply chain, from producer to customer. The size of the delivery may mean that a wholesale distributor is involved in sending the goods to the retailer before it reaches the final fulfillment center. Let’s take a look at how these parties interact with a delivery in the last-mile.

Wholesale distributors

Wholesale distributors assist the supplier or producer of the goods by distributing them in bulk to retailers. They are an integral part of the supply chain for multiple sectors, from fast-moving consumer goods to construction materials and electronics. Wholesalers ensure that the goods reach the distribution hub in time to meet the demands of the last-mile delivery.

Wholesalers have also been disrupted in recent years by an uptake in producers selling directly to the customer. A Deloitte study suggests that this has led to a decline of almost 8.3% for wholesalers between 2006 and 2016. This leads to increased pressure on wholesale distributors to fulfil timelines for retailers and add value to their role in the supply chain.

Retailers

Retailers and delivery

Retailers also face pressure in fulfilling the demands of the last-mile. They require wholesalers and producers to deliver on time, in order to meet the delivery date for the customer. This is particularly essential with fast moving consumer goods like groceries. A CapGemini survey revealed that 40% of customers cited food delivery services as an essential part of grocery purchases, with half those surveyed prepared to switch to a retailer that provided a better delivery service.

Retailers have two options when coordinating last-mile deliveries:

  • Manage their own distribution hubs for online shopping and orders
  • Outsource to a delivery service or fulfilment center to meet customer demand

The huge premiums and customer loyalty associated with deliveries are an integral part of a retailer’s income. Speed in last-minute delivery will also expedite the processing of return goods for the retailer (currently estimated to cost retailers £60 billion a year in the UK alone), getting items back on the shelves as quickly as possible.

Fulfilment Centers

Fulfilment centers are warehouses or facilities that store goods for retailers and producers and carry out distribution services on their behalf. Unlike simply renting a warehouse, a fulfilment center will also carry out the last-mile delivery to the customer. The success of a fulfilment center rests entirely on their ability to carry out the last-mile. In 2020, online orders increased by 50%, accelerating the evolution of fulfilment centers by more than a decade.

How is the last-mile logistics organized and what are the biggest challenges?

Check out the structure of last-mile logistics and how it is organized below.

There are four main areas that present the largest logistical challenges for delivery:

Speed

delivery speed

The speed of the delivery is determined by the expectations of the customer. But each route will present its own operational changes that can impact the speed of the delivery. A delivery driver that needs to make multiple stops in a large urban area may be impacted by traffic, while deliveries to countryside areas may need to cover large distances within the small window of a one-day delivery. The shorter the delivery timeline, the more likely it is that even small delays will impact the speed of the delivery.

Cost

The decision to outsource deliveries to third party fulfilment centers or businesses like Amazon will leave you without the responsibilities of handling the last-mile. However, fulfillment by Amazon does lead to the additional costs of storage fees. As long as your stock sits in one of their fulfilment centers, you pay fees to the center. With a seller or company fulfilled delivery, you don’t have to worry about the fees you pay to the third party fulfilment center, but will be responsible for all dispatch costs and logistics.

Efficiency

Route optimization is an essential part of successful last-mile deliveries. Enabling drivers to view upcoming obstacles and delays will make it much easier to meet delivery deadlines. Inventory management will also allow drivers to have eyes on their goods, allowing for better route planning.

Transparency

Customers value transparency in the last-mile; in 2020 international supermarket retailer Tesco increased its delivery slots from 600,000 a week from 1.4 million due to the increase in demand for delivery time slots. To meet the challenge of demand, companies like Amazon also arrange collection lockers, so that customers can pick up packages at their convenience.

How can Less platform resolve these issues?

How can Less platform resolve these issues?

Less is enterprise-grade, cloud-managed distribution management software. Less can reduce the costs traditionally spent on last-mile deliveries by streamlining route planning and optimization to increase efficiency and meet same-day delivery deadlines. Drivers can effectively manage orders with real-time ETAs and easily track goods for deliveries. Make the last-mile deliveries on time and with minimal vehicles, saving you costs on overheads while still meeting customer demand.

Resolve last-mile logistics challenges with Less.

The last-mile is the most expensive and high-demand link in the supply chain. Even the smallest delays in the supply chain can jeopardize a delivery and lose producers an order. That’s why Less as a distribution management software can play an essential role by reducing your costs and boosting your delivery transparencies in order to meet the expectations of the consumer. Request a demo today to find out how Less can help you make more out of your last-mile logistics management.

 

Author
Vardan Markosyan is the CEO at Less® Platform
MBA from the University of Chicago Booth School of Business
PhD in Economics from the Institute of Economy of NAS RA
He spent decades of research and consultancy on business process optimization and system design


What LTL carriers should consider in choosing a Transportation Management Solution (TMS)?

Less Than Truckload (LTL) logistics is different from that Full truckload (TL). People might think that it is just a size of the load but there are fundamental differences in business models so in the strategic and operational management tools and methodologies should be used.

The baseline LTL logistics combines random short distance pickups and long-distance haulage.

The fundamental difference of LTL logistics is that companies usually organize pickups with city cabs and then consolidate loads in the larger trailers for the long-distance haulage during the week.

In organizing Local pickups two types of operational challenges emerge:

  • How to organize daily local pickups so that available equipment could handle the most of loaded mileage and be balanced, in the meantime assuring most accurate appointment times?
  • Dynamically rebalance new pickups when loads have already commenced.

Next, pickups usually being consolidated in depots/warehouses in larger equipment/trailers so they can be transported to a longer distance. While timely and safely delivery is a high priority, inefficiencies also arise as planners spent time in assuring the best delivery windows while taking into account available equipment, driver specifications, and a number of other factors. This process is time-consuming, can decrease the accuracy of deliveries and substantially increase costs of operations by underutilizing existing equipment and increasing total mileage.

And finally, one should make sure the interoperability of both parts of operations, assuring the profitability of the business, in the meantime keeping operational expenses as low as possible. It particularly means the ability to plan both inbound and outbound operations simultaneously and establish the best consolidation or cross-docking model that creates optimized short-haul and long-haul loads.

A simple LTL model with pick-ups and deliveries can look like the one in Figure 1 below.

Figure 1 Lessplatform’s multi-stop pickup and delivery sample loads

The planning system should be able first plan multi-stop pickups for each day during the week and then consolidated deliveries.

We have presented problems of planning LTL operations in two graphs below:

 

Figure 2

 

As you can see, the system should assure high accuracy of both pickups and deliveries, trying to increase the number of orders in the mealtime keeping high equipment utilization and low driven mileage.

We have implemented quick research to understand how the top firms on the market address these problems of LTL trucking. We have particularly looked at their websites. Some of the top solution providers and their offers are listed below:

Trimble transportation management

Shipment Planning and Execution

Optimize load matching success and customer satisfaction by analyzing load and equipment information such as driver hours (HOS), miles, costs, and availability for both the current load and future scenarios to plan and dispatch loads accurately and easily. Streamline day-to-day load matching so your team can focus on the more complex needs of today’s planning processes. Increase efficiency with load-power optimization planning tools for OTR and multistop scenarios.

Oracle transportation management

Operational Planning
A state-of-the-art optimization engine that automatically finds the best solutions for your logistics needs, while adhering to your business requirements and trading partner capabilities.

Create a more efficient and higher velocity logistics network

Plan and execute domestic and international shipments—in one system

Lower rates and manage equipment more efficiently

Optimize the cubic capacity of containers, consolidate orders, and streamline location flow and calendars

Omnitracs

Reduce Costs and Simplify Operational Processes
Managing any for-hire fleet is a constant battle between doing what’s best for the customer and what’s right for the business. For less-than-truckload (LTL) fleets, however, this balancing act is even more challenging due to the complex nature of the business. Juggling multiple customers, locations, delivery and pickup times, drivers, and vehicles while controlling costs can be an impossible task without the right tools in place. Thankfully, there are solutions built to simplify operations for LTL fleets while delivering improved efficiency and customer value.

SAP transportation management

Order management
Minimize freight costs and enhance customer service. Improve the efficiency of order and process management and generate optimized, rules-based routing proposals dynamically.

MercuryGate

Plan for And Deliver Better Load Building Outcomes
Increase space utilization while cutting freight and fuel costs. Leverage control tower visibility to take the guesswork out of load planning by easily generating precise calculations before shipping. Streamline loading and unloading and minimize labor errors with step-by-step planning.

MercuryGate’s load planning and load building takes into account all facets including weight, dimensions, densities, stackability constraints, and compatibility constraints. This empowers your whole team to significantly reduce the number of freight runs needed, as well as the emission your transportation produces.

JDA transportation management

Transportation
Supply chains are only going to get more complex, yet you are expected to consistently deliver while managing costs. With transportation, you can leverage every available asset, drive profitability, and sharpen your competitive edge. Our solutions enable you to transform your transportation operations by managing both inbound and outbound, integrating supplier and carrier collaboration tools, and tackling whatever challenges tomorrow brings.

Almost all of them have planning, dispatch, visibility, 3rd party carrier sourcing, and accounting capabilities for multi-modal business models. Some of them are on the market for decades. All of them have planning capabilities listed on their websites.

Conclusion

Transportation and logistics firms should have robust tools to increase operational efficiency without compromising client service and business goals. LTL planning optimization has limited offerings despite the variety of available TMS and fleet management software on the market. Robust planning toolbox, data interoperability, and visibility through all the business processes could help LTL firms substantially improve their efficiency, make planners and dispatchers life easier, and equipment utilization better.

We understand that total macro instability, current low level of rates, decreased order numbers on certain lanes and for certain clients, and other factors may substantially affect the appetite of the management to improve the efficiency of operations. On the other hand, now is the time to start thinking more about efficiency and prepare for a better harvest when good times are back.

Less® Platform can turn your data into loads within 10 minutes and compare it with your historical results! You can also test all the necessary features for your logistic model and consult with our experts on your challenges.

Author
Vardan Markosyan is the CEO at Less® Platform
MBA from the University of Chicago Booth School of Business
PhD in Economics from the Institute of Economy of NAS RA
He spent decades of research and consultancy on business process optimization and system design