What Does “Last Mile” Mean in the Supply Chain?
Customer experience is everything in business, and this includes how the customer experiences their deliveries. At no other time is this fact more emphasized than during the Covid-19 pandemic. Many people had to rely on online shopping and e-commerce to get what they need. How they received their orders can have a considerable impact, not just on the client but also on your entire operations.
That’s why businesses pay a lot of attention to the last mile. This article defines what the last mile is and why it’s crucial to your business.
What is the last mile?
In logistics, the term “last mile” refers to the closing stretch in the supply chain. It’s the last leg of the journey that a product takes from its point of origin, in which it is finally delivered to the customer. Before the advent of e-commerce, that customer could be a business. The shipment could be delivered to that business’ warehouse or brick-and-mortar store.
Ecommerce has transformed the meaning of the last mile, however. These days, your customer doesn’t always have to be a business or a retailer. Your shipment’s final destination doesn’t have to be a store or a warehouse. Instead, your customer could be an ordinary consumer, and you could be shipping the goods directly to their home.
The last mile is the most vital part of the supply chain.
Despite the last mile being the final leg of a product’s journey, it’s often the most expensive part of the supply chain. It’s also the most vital.
Industry experts have estimated that the last mile makes up around 53% of the supply chain’s total cost. That’s because it involves a lot of moving parts. These include:
- the containers the products would be shipped in
- the vehicles and the drivers that will transport them
- the warehouses that will house them
- the software that will track them
- and the workforce that will handle them
And with customers demanding free shipping nowadays, the last mile could get even more expensive because companies have to shoulder the product’s shipment cost.
This brings us back to the issue of customer experience. To cut back on costs, companies often partner with third-party providers to handle the last mile for them. And yet, the last mile is always the most direct way a company can interact with customers.
How the customer experiences how their orders are delivered significantly affects a company’s bottom line. Suppose the shipment is late or the goods are damaged. In that case, this incident can form a rift in the relationship between the customer and the company. The company would lose that client’s trust, even if a third party carried out the delivery.
A survey found that 55% of customers are likely to seek alternative delivery services if they receive their orders late. What’s even more dangerous is if the client becomes disgruntled enough that they leave negative reviews of your company’s products and services based on their delivery experience. This could hit your company’s reputation. Moreover, it could affect your relationship with your other clients and your ability to score new customers.
The last mile is an essential part of the supply chain. If your company can’t handle it in-house, partner with a courier to deliver your products quickly and efficiently.
At Pearl, we know how crucial the last mile is. Thus, we have taken steps to ensure that your shipment makes this final phase of its journey without a hitch.
