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Last-mile delivery is the most visible part of the customer experience, and consumers often base their perception of an ecommerce retailer on the delivery experience. For transportation and logistics (T&L) companies, offering services that meet consumer expectations means delivering faster and providing more visibility while controlling costs.
Rising ecommerce sales continue to increase pressure on carriers to handle more shipments, more stops, and tighter delivery windows, and traditional processes don't allow fulfillment teams and delivery drivers to keep pace. The good news is that technology can help T&L companies improve delivery performance without adding trucks, drivers, and operating costs. By improving accuracy, visibility, productivity, and decision-making across the supply chain, T&L companies can meet consumer expectations (and ecommerce company demands) while protecting margins.
Consumer expectations drive ecommerce delivery strategies, and those expectations ultimately affect T&L company operations. Cost remains important. Capital One Shopping reports that 81% of Americans will spend more to qualify for free shipping, and 82% consider free shipping more important than fast shipping. Additionally, 30% of consumers have abandoned an order because of shipping costs.
Another article from Capital One Shopping points out, however, that shipping cost isn't the only factor in winning business. Research shows that 56% of shoppers ages 18-34 expect same-day delivery, while 88% of consumers consider real-time delivery tracking critical to a positive customer experience. Nearly half of North American ecommerce orders take three to four days to arrive, yet 63% of consumers will choose a different retailer for later purchases if shipping takes longer than two days.
Ecommerce companies must meet consumer expectations to attract and retain customers, so to close and retain ecommerce company accounts, T&L companies must meet consumer expectations. Common challenges in meeting service level agreements (SLAs) without consuming margins include the following:
A T&L company may successfully provide next-day or same-day delivery under normal conditions, but the real test comes during peak periods. Holiday shopping, promotional events, and unexpected demand spikes can dramatically increase shipment volumes. T&L companies need enough flexibility to scale without proportionally increasing trucks, labor, and other resources.
Accuracy matters at every stage of delivery. The right package needs to reach the right address at the right time. A mis-shipment will create rework and can damage the relationship between the carrier and ecommerce business. It can also mean sharing additional costs with the ecommerce company, depending on the service agreement.
Proof of delivery (POD) can create additional administrative work. T&L companies need a way to automate POD to capture delivery information like time and images, as drivers complete their routes, without slowing them down.
Ecommerce companies understand that maximizing sales requires them to offer affordable or free delivery. So, they're looking for carriers that offer competitive pricing. As a result, T&L companies must control fuel, labor, and vehicle expenses to offer the best last-mile delivery charges.
T&L companies need to examine the entire process, from ecommerce fulfillment through final delivery, to find the balance between optimizing consumer experiences and operating in the black. Optimizing workflows can help T&L companies operate with more agility and less waste.
Transportation capacity is expensive. Getting more value from existing capacity can improve service without adding to the fleet or making more runs. Load planning and optimization will help companies use available space more effectively. Dimensioning solutions can provide accurate measurements in less time, and accurate pallet and carton data can prevent inefficient loading, document weight, and reduce claims. In addition to optimizing trailer space, T&L companies can streamline dock scheduling, loading, and shipment verification to save time, making the best use of labor and helping ecommerce companies improve their customers' experiences.
Fast delivery does not start when a truck leaves the facility. A shipment can lose hours (or even days) before it reaches the dock. T&L companies need to evaluate processes and eliminate bottlenecks that slow down fulfillment. Common culprits include poor dock coordination, slow receiving and putaway, inventory that employees cannot locate, and picking and packing errors. T&L companies also need to replace manual verification processes to increase speed and accuracy and eliminate mis-shipments and rework. Operators also need to prioritize equipment maintenance to prevent downtime.
Efficient routing is key to time and fuel savings and maximizing drivers' productivity. AI-enhanced routing offers additional benefits, helping dispatchers adapt routes to changing road conditions, weather, traffic, and demand, making faster, data-based decisions.
Distribution centers located closer to customers can shorten delivery distances and improve delivery times. T&L companies that arrange for flexible capacity in different locations can also make it easier to scale, particularly if demand peaks regionally, without skyrocketing truck and fuel costs.
A smart supply chain solution can give T&L companies visibility into individual trucks and deliveries. If a vehicle breaks down or a driver needs to make an unexpected return pickup, managers can respond in the most logical, cost-effective way. Real-time visibility also allows companies to communicate delivery information more effectively, to meet consumer expectations that they can see, on demand, where their orders are and when they arrive at their doors.
Not every package needs to travel from a distribution center directly to a customer's home or office. T&L companies can work with ecommerce retailers that partner to offer pickup in other locations. Smart lockers can securely store orders until it's convenient for the customer to retrieve them and, for the T&L company, reduce the number of individual residential stops.
If an ecommerce company offers free returns via carrier, it needs a T&L company willing to work with it on an efficient reverse logistics process. To make return services profitable, companies can optimize routes for both pickups and deliveries, reducing additional miles, fuel consumption, and driver time.
To build more efficient route planning, tracking, monitoring, and data collection processes, T&L companies can leverage several technologies.
Together, these technologies can create the real-time visibility that consumer expectations increasingly demand and help T&L companies increase efficiency and lower costs.
As consumers increasingly expect faster, more convenient delivery with real-time transparency, technology can help T&L companies respond to those demands. But successful implementation requires more than purchasing devices or deploying software. The right technology partner will support T&L technology with lifecycle services, including configuration and deployment, device monitoring and management, help desk support, and advanced exchange and repair.
We know your goal isn't simply to deliver faster. It's to provide services that meet customer demands efficiently, accurately, and profitably. Our experience with technology implementations for the T&L industry will help you solve the business problem of meeting consumer expectations while turning a profit. Contact us to learn more.
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