Getting the final delivery stretch poses significant challenges for supply chains, and that’s where a TMS (Transport Management System) steps in.
This leg of the journey often witnesses peak inefficiencies, leading to higher service costs.
Last-mile service emphasizes speed, timely delivery, and accuracy—a trifecta aimed at enhancing brand loyalty and customer satisfaction. Notably, a study reveals that 56% of shoppers are unlikely to make a repeat purchase if dissatisfied with the shipping service.
Simultaneously, the last mile stands out as one of the most time-consuming and costly aspects of the e-commerce supply chain, accounting for over 53% of total shipping costs, as research indicates.
Let’s dive in to understand TMS meaning.
What is a Last-Mile Delivery?
At its core, last-mile delivery is the final and crucial stage of getting a parcel to its ultimate destination—usually a personal residence or retail store—from a transportation hub. It’s the make-or-break moment for businesses aiming for a quick and efficient finale to meet the ever-growing demand for speedy shipping, especially in e-commerce, food, and retail.
However, this ultimate step comes with its challenges. Last-mile delivery is the priciest leg of the entire journey, often leading to high shipping costs. Despite being a bit of a budget buster, it is key to overall customer satisfaction. It’s the last lap, but the one that leaves a lasting impression.
Seven Challenges a TMS Addresses During Last-mile Delivery
High delivery costs
Delivery costs can be a real budget bummer for logistics companies, with over half of their operational expenses dedicated to last-mile delivery challenges. This financial hurdle arises from soaring fuel prices, vendor fees, vehicle expenses, delivery staff salaries, inefficiencies in delivery methods, and the constant drumbeat of customer demands for faster deliveries.
The real catch? If not handled with finesse, last-mile delivery costs can take a hefty toll on your bottom line, gobbling up as much as 41% of the total supply chain expenses. The last-mile leg foots a whopping 53% of the overall shipping bill.
Adding to the complexity, companies face curveballs like unexpected spikes in orders, hiccups in fleet operations, and the occasional breakdown, all conspiring to inflate the costs.
And here’s the kicker—skyrocketing delivery costs, which eventually hike up product prices, often lead to cart abandonment in the world of e-commerce. It’s a delicate balance between delivering satisfaction and managing the numbers.
Lack of visibility
Buyers nowadays want to be in the know. They crave details about where their package is and exactly when it’ll grace their doorstep. Some businesses are tossing tracking codes into the mix to grant a peek into delivery status. But in an era where technology reigns supreme, mere tracking codes fall short.
Customers really want real-time intel on their package’s whereabouts—they want a front-row seat to every step of that last-mile dance.
The solution? Dive into the world of delivery management software. It’s the key to unlocking increased transparency in last-mile delivery. Your customers can track their packages to their doorstep with real-time status updates. It’s not just visibility; it’s a front-row ticket to delivery certainty.
“Where is my order” problem
Ever wonder, “Where is my order?” The constant barrage of such queries, also known as “Where is my order?” (WISMO) calls, and customer complaints often boil down to one thing: a lack of timely and accurate delivery updates.
Customers eagerly await their goodies and want transparent tracking info to stay in the loop. When businesses fall short on these updates, it’s a recipe for frustrated customers, negative reviews, and a headache for customer support.
But fear not! The antidote to this challenge lies in robust order tracking systems. Picture this: By integrating nifty tracking technologies like GPS, RFID, or barcodes, companies can dish out real-time updates on order statuses.
Plus, toss in self-service tracking portals and automated delivery notifications, and voila—customer experience gets a serious upgrade. It’s not just about finding your order; it’s about a smooth ride from anticipation to delivery.
Outdated technology
A recent report from SOTI spills the beans—almost half of transportation and logistics companies worldwide are stuck in the past, rocking outdated technology for TMS and last-mile delivery. It’s not great news because it’s not doing much to tackle delays or trim those sky-high shipping costs.
However, there’s a game-changer in town. This is where you need a GPS tracking system in your delivery vehicles; sprinkle in a dash of the Internet of Things (IoT), and voila.
Now, you can keep tabs on the entire last-mile journey.
No proper route planning
Planning routes can be a head-scratcher, especially for beginners. It’s like a puzzle with loads of variables to juggle. Mess up, and you’ve got delayed deliveries, grumpy customers, and a dent in your wallet.
But fear not; there’s a solution in route optimization. This nifty solution will slash the costs tied to tardy deliveries and work its magic on the estimated arrival time. It’s not just about finding the way; it’s about finding the smart way to keep everyone happy.
Lower efficiency
Efficiency matters big time. It’s not just a hiccup in one corner of the supply chain; it’s like a bunch of small inefficiencies playing tag throughout the process. These tiny hiccups can snowball into hefty operational costs or a supply chain that moves slower than molasses.
But here’s the fix: Upgrade! Swap those outdated systems for modern marvels like GPS tracking on delivery vehicles and the magic of IoT. Imagine having a single TMS software to monitor shipments at every step, optimizing operations, saving costs, and even predicting trouble before it hits. It’s not just an upgrade; it’s a leap into a more efficient and cost-effective future.
Deliveries are just the beginning of the tale
Regarding e-commerce, returns and reverse logistics play a crucial role in the customer journey. Wrangling these processes can be a real-time and money drain. The secret sauce? Streamline those return policies, toss in crystal-clear instructions, and slap on user-friendly return labels. It’s like handing your customers a stress-free return ticket, boosting their satisfaction.
But here’s the solution: Team up with third-party logistics gurus specializing in reverse logistics. This dynamic duo cranks up efficiency and trims those pesky costs.
Efficient returns aren’t just a win for businesses; they’re the key to a seamless customer experience and building ever-precious loyalty.
Note: All these last-mile delivery challenges improved by TMS
What Next?
Mastering the art of last-mile delivery isn’t just a nice-to-have for e-commerce brands—it’s a game-changer. It’s the secret sauce to adapting to customers’ wants and standing out in a sea of competition. If you’re serious about rocking the online store game, tackling last-mile challenges head-on is necessary.
How? Well, it’s a tech game. You need the right tools, transparency, and a smooth chatter line between your delivery squad and customers.
Invest in transport management software that weaves together cameras, sensors, vehicles, and your excellent delivery crew into a real-time, smart network.
The result? Brand-new efficiencies, the power to tackle issues before they even show up (thanks to predictive analytics), and the chance to shake things up on the fly.