The Advantages of Outsourcing Last Mile Delivery to a Third-Party Logistics Company
The Advantages of Outsourcing Last Mile Delivery to a Third-Party Logistics Company
The last mile holds immense significance in the logistics and transportation industry and demands seamless execution for maximum customer satisfaction. According to Insider Intelligence, last mile delivery costs total 53% of overall transportation costs. Many ecommerce brands invest heavily in this stage of the supply chain since it can make or break the entire experience for customers. This article will cover everything you need to know about last mile delivery and how your business can benefit from partnering with a 3PL. But first, what is last mile delivery?
WHAT IS LAST MILE DELIVERY?
Last mile delivery refers to the final leg of the delivery journey. Packages are transported from a fulfillment hub to the customer's doorstep or place of business. This term is particularly relevant to ecommerce businesses looking for fast, efficient, and convenient delivery services crucial to a company's success.
WHY USE A LAST MILE CARRIER?
Amazon has set the bar high for ecommerce brands with its uber-fast delivery options. On-demand shipping options like same-day, next-day, and two-day delivery have become the industry norm for companies selling online. To remain competitive in today's fast-paced marketplace, your company must provide an on-demand buying experience. This means storing inventory at warehouse fulfillment centers near high-volume markets for delivery within two days.
Suppose your company has only one fulfillment hub, limited warehouse space, or high order volumes spread across a large geographic location. In that case, outsourcing your last mile deliveries is more efficient and cost-effective. Building a robust logistics infrastructure will require enormous financial investment and can eat into your profits or even put you in debt. This is why outsourcing to a last mile logistics carrier provides many benefits. Let's take a look at those now.
WHAT ARE THE BENEFITS OF OUTSOURCING last mile DELIVERY?
Outsourcing last mile delivery to a third-party logistics (3PL) provider can be a game-changer for your ecommerce brand. Your company can instantly improve operational efficiency, streamline sales and build long-lasting customer loyalty. Take a look at the benefits below to learn how you can provide a first-class delivery experience to your customers with a 3PL.
THE KEY BENEFITS OF LAST MILE DELIVERY CARRIERS
Experts in Last Mile Delivery
last mile carriers have proven processes in place to navigate the complexities and challenges that come with last mile delivery. For example, downtown San Francisco can be congested for several hours of the day. Last mile carriers use route optimization software that factors in traffic jams, road blockages, and the difficulty of the delivery location. This software plans the best route and helps the carrier get to the delivery location on time.
Increase in Sales and Better Margins
With fast and efficient last mile delivery, customers are more likely to return to your online store to make additional purchases. Outsourcing last mile delivery also allows your company to save money on fuel, labor, and vehicle expenses. Another cost savings benefit is with the route optimization software previously mentioned. last mile carriers collect real-time data to reduce delivery times resulting in lower transportation costs. All these benefits can help improve your overall bottom line making a last mile carrier beneficial to your company.
Strategically Placed Fulfillment Centers
If your only fulfillment center is in New York, but most of your customers are on the West Coast, it will take a lot of work to offer on-demand delivery services. This is where a last mile carrier can help your company. Instead of investing in a costly West Coast fulfillment center that will take years to build, you can partner with a 3PL with West Coast warehousing and last mile delivery.
Most last mile carriers already have a vast supply chain infrastructure, allowing you to take advantage of it immediately. For example, SEKO has 15 global fulfillment centers with six million square feet of warehouse storage space. This robust supply chain network allows you to provide your customer base with true two-day or next-day delivery while providing opportunities to expand into new markets.
last mile carriers often have well-established networks of local delivery partners who have experienced and reliable delivery personnel. This allows them to handle a high volume of deliveries and quickly adapt to changing conditions on the ground. Many last mile carriers also use real-time tracking systems and communication technology that allows you to closely monitor and validate accurate delivery.
Agile and Innovative Delivery Methods
Using nimble and agile delivery vehicles helps reduce delivery times and associated costs with faster shipping. For example, Amazon has invested heavily in delivery vans instead of using larger hauling trucks in congested areas. This helps last mile carriers navigate the complexities of densely populated urban cities or busy suburban neighborhoods.
It's important to note the rise of investment in automated delivery by drones and robotics. Partnering with a last mile carrier prevents you from making this kind of significant investment or falling behind a competitor who adopts automated delivery methods earlier than you.
Advanced Technology, Integrations, and Data Analytics
Most last mile carriers can integrate with the most popular ecommerce platforms and other business technology systems. These integrations allow you to consolidate all the valuable data about your customer's shopping habits to improve the overall customer experience. For example, SEKO's Technology Platforms integrate with the most popular ecommerce platforms.
- Amazon SQS
- Magento (Adobe Commerce)
- Woo Commerce
Accelerating the last mile delivery process with advanced technology is vital for quickly handling higher delivery volumes. Access to this technology equips your company with efficient tools to deliver remarkable customer experiences. Machine learning capabilities allow you to analyze and improve inefficient areas that affect delivery times.
last mile carriers also continue to innovate their in-house technology platforms allowing your ecommerce brand to utilize the most cutting-edge technologies in the logistics industry. This can significantly impact your ability to stay ahead of the competition.
WHAT BUSINESSES WOULD BENEFIT FROM A FINAL-MILE CARRIER?
Many industries can greatly benefit from partnering with final-mile delivery carriers. First, companies that ship long distances or require global fulfillment hubs should consider partnering with a last mile carrier. Second, delivering heavyweight or oversized parcels always presents challenges in logistics. The sheer weight of these items needs special equipment and a sufficient workforce to ensure the contents are delivered in good condition. Third, companies selling hazardous materials, perishable goods, or products requiring special handling should partner with a last mile carrier. A last mile carrier's expertise in transporting these types of goods and products helps reduce the risk of an incident or damage to the package. See below to learn more about how specific industries can benefit from outsourcing last mile delivery.
Online retailers and brick-and-mortar stores can benefit from last mile delivery by improving delivery times and increasing customer satisfaction. On-demand delivery services such as same-day or next-day delivery can be especially attractive to a retailer’s customers during the holiday shopping season.
Ecommerce businesses can improve delivery times, increase efficiency and enhance their customer relationships by partnering with a last mile carrier. With the final step of the delivery process being handled by experts, ecommerce businesses can focus on other areas of their business, such as marketing, product development, and customer service.
Healthcare organizations can benefit from last mile delivery by reducing the time it takes to receive critical medical supplies and equipment. With faster and more reliable delivery, healthcare providers get the resources they need to provide high-quality care to their patients.
Food and Beverage Companies
Last mile carriers can handle the delivery of perishable items in a timely and efficient manner. They also have refrigeration storage facilities and industrial freezers to keep perishable items fresh. Reliable last mile delivery is crucial for meeting customer expectations and maintaining brand loyalty in the food and beverage industry.
WHAT TO CONSIDER WHEN OUTSOURCING last mile DELIVERY TO A THIRD-PARTY LOGISTICS COMPANY?
When outsourcing last mile delivery to a third-party logistics (3PL) provider, it's crucial to carefully consider several key factors to make the right choice for your business. Essentially, they will be the face of your company, so your 3PL partner must be a company you can trust to preserve your brand's reputation. A thorough analysis of the key factors below can help you identify the ideal 3PL to use as your last mile carrier.
KEY FACTORS YOUR BUSINESS SHOULD CONSIDER
Choosing a carrier with a strong reputation and a proven track record of success in last mile delivery is essential. They should be able to provide you with verified statistics for their last mile delivery operation. For example, SEKO has a 95% on-time delivery rate for our customers' shipments. Another good benchmark should be 20+ years of successful experience in the logistics and transportation industry. A last mile delivery company with decades of experience shows their supply chain network can withstand the many challenges that have arisen in the past.
Real-time carrier and package tracking give your business and consumers visibility about where their goods are in the supply chain. Find a third-party logistics provider offering complete transparency around your supply chains and final-mile delivery. This visibility helps keep any disruptions manageable before they balloon into more significant problems and you lose many of your customers due to a poor experience.
Delivery Service Models & Coverage
Evaluate a last mile carrier's delivery coverage and the locations they serve. Delivery models such as on-demand, next-day or two-day are also important, with two days being the maximum for the ecommerce industry. This requires fulfillment hubs strategically located near your largest customer base to ensure delivery within two days. With sufficient last mile delivery coverage, your company can meet your customer's expectations for fast, on-demand delivery.
Today, last mile carriers face the challenge of meeting delivery volumes and service-level agreements (SLAs) due to the need for more drivers. You should confirm with your chosen last mile carrier that they have enough qualified drivers to fulfill your needs in the targeted market.
When searching the logistics industry for a suitable last mile carrier, check their technology integration capabilities. It makes everyone's life easier when the last mile carrier you choose can integrate with your ecommerce platform, enterprise resource planning (ERP), and point-of-sale (POS) systems. These integration capabilities seamlessly connect your data, resources, and operations in real time, making the transition a seamless experience.
WHY CHOOSE SEKO AS YOUR LAST MILE CARRIER?
SEKO Logistics is the perfect partner to help your business succeed. The company's team of experienced logistics experts will work with you to create a customized last mile delivery solution that meets your unique needs and helps you achieve your business goals.
Choosing SEKO as your last mile carrier can offer your business a wide range of benefits:
- Strong reputation for reliability
- Extensive delivery coverage
- Cost-effective pricing
- Seamless integration with your supply chain
- Commitment to providing an exceptional customer experience
So why wait? Take the first step towards a better last mile delivery experience and contact SEKO today to set up a meeting.
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Everything we do is designed to make our clients' lives easier - helping them to develop and maintain excellent relationships with their own customers. Let us know what business challenges you are facing, and we'll see what we can do to help.