Last Mile Delivery Issues

The “last-mile problem” can be addressed by streamlining the delivery process. However, there are a number of issues to consider when attempting to optimize a more cost-effective last-mile strategy. Problems with last-mile delivery include the following:

• Insufficient facilities: Last-mile distribution centers (DCs) may have anywhere between 8 and 12 facilities, whereas traditional delivery networks may only have three to five facilities. Having more facilities increases the proximity to consumers, improves delivery speed and saves money. An insufficient number of transportation facilities will increase travel time.
• Distance: The location of last-mile distribution centers is critical. Such facilities should be located where a company’s customers are found. If the customers are all over the country, it’s wise to consider the population centers on the Northeast and Eastern seaboards, which is where the highest concentration of home-delivery customers are located. A company that doesn’t choose its distribution centers wisely will still incur considerable expense and delay during the last mile.
• Time: It’s still reasonable to expect deliveries to take time, since distribution centers are located in industrial areas, not residential areas. The time it takes to make these deliveries is called stem time. However, if deliveries are taking more than 45 minutes, it means there’s a need for more distribution centers, or distribution centers closer to customers. If deliveries take too long, then there’s a loss of productivity. Shorter deliveries, however, offer opportunities to deliver more goods within the same time frame.
• Traffic: Traffic conditions may not be a factor in rural parts of the country, but a five-mile trip in a busy city can take time. In more congested areas, companies will need to consider more than just distance. If there aren’t additional distribution centers, there will need to be more efficient means of transportation to prevent delays.
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