Last Mile Logistics – Facts you should know

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The Middle Mile area in particular has continually increased the demands on logistics:

With the concept of getting the goods to the buyer ever faster, digital platforms (see also below) such as Amazon were the lifeblood of a time. While the online shop was previously languishing as a multi- or cross-channel alongside the “actual” and conventional sales channel, the simple idea of ​​“fast” delivery catapulted e-commerce into the front runner in the Champions League.

Middle Mile E-Commerce – Image: Xpert.Digital

Suitable for:

• Well equipped for unified commerce or no-line commerce

Payment methods became more diverse and easier. Processing also became easier for both consumers and sellers. It had to be quick and easy. The products had to be searchable and found quickly and easily. Ordering and processing had to be quick and easy. Fast delivery. The simple USP (Unique Selling Point) for success and e-commerce was born: “Speed”!

Transfigured image of the pure-play e-commerce business model – Image: CuteCute|shutterstock.com

With the digital platforms, especially Amazon, the pure players sprouted like mushrooms. In the area of ​​e-commerce, “ Pure Play ” refers to a business model where goods or services are sold or delivered only via the Internet without a physical store.

As a rule, they do not deal with the delivery of packages themselves, but generally leave this to the CEP services, fulfillment service providers or Amazon itself: Fulfillment by Amazon (FBA).

In the FBM – Fulfillment by Merchant area, people also rely on the CEP services.

The last mile is a term used in supply chain management and transportation planning to describe the movement of people and goods from a transportation hub to a final destination. The term “last mile” was adopted by the telecommunications industry, which was struggling to connect individual households to the main telecommunications network.

Similarly, in supply chain management, the last mile describes the difficulty of transporting people and packages from hubs to final destinations. Last-mile delivery is an increasingly studied area as the number of business-to-consumer (B2C) deliveries increases, particularly from e-commerce companies in freight transportation and ride-hailing companies in passenger transportation.

The challenges of last mile delivery include minimizing costs, ensuring transparency, increasing efficiency and improving infrastructure.

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Trends in the courier, express and parcel industry (CEP) – PDF download

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Last mile logistics worldwide – PDF Download

“Last mile” was originally used in the telecommunications industry to describe the difficulty of connecting end-user homes and businesses to the main telecommunications network. This last “mile” of cable or wire is used by only one customer. Therefore, the costs of installing and maintaining this infrastructure can only be amortized over one subscriber, compared to many customers in the main trunks (bundles) of the network.

In supply chain management, the last mile describes a similar problem for both the transport of people and freight. In freight networks, packages for many customers can be efficiently delivered to a central hub by ships, trains, large trucks or planes. Once at this central distribution hub, these packages must be loaded into smaller vehicles for delivery to individual businesses or consumers. In transportation networks, the last mile describes the difficulty of getting people from a transportation hub such as an airport or train station to their final destination. Just like in telecommunications networks, the cost of last mile delivery is often higher.

Suitable for:

• Europe in transition: The future of logistics centers
• Local decentralized hubs – logistics centers
• Networked distribution centers – intralogistics 4.0

Transporting goods via freight rail networks and container ships is often the most efficient and cost-effective way. However, if the goods arrive at a freight yard or high-capacity port, they must then be transported to their final destination. This final section of the supply chain is often less efficient, accounting for up to 41% of the total cost of transporting goods. This has become known as the “last mile problem.” The last mile problem can also include the challenge of making deliveries in urban areas. Deliveries to retail stores, restaurants and other merchants in a central business district often contribute to congestion and safety issues.

A related last mile problem is the transport of goods to areas in need of humanitarian assistance. Relief supplies can sometimes reach a central transportation hub in an affected area but cannot be distributed due to damage from a natural disaster or lack of infrastructure.

A challenge in last mile delivery is unattended packages. Shipping companies such as UPS, FedEx, USPS, DHL and others leave a package unattended at a business or home, exposing the item(s) to the weather and the possibility of theft by "porch pirates" (a person who steals packages from the porches or front doors of the stealing from customers).

One solution to this problem is to set up lockers in urban centers. In the United States, Amazon has installed lockers where customers can pick up packages instead of leaving them at home. This protects them from theft and damage and allows companies to deliver to one location rather than multiple individual homes or businesses.

Similarly, in Japan, South Korea or Taiwan, some online retailers offer the option of delivery to a convenience store of the customer's choice for in-store pickup by the customer. Not only does this reduce the likelihood of theft and consolidate packages, but it also allows payment for in-store purchases to be offered.

To reduce costs, retailers have been exploring the use of autonomous vehicles to deliver packages. The US company Amazon and the Chinese company Alibaba have explored the use of drones to deliver goods to consumers. In Europe, Germany, the UK and Poland have experimented with services that enable automated parcel delivery.

“Last mile” also describes the difficulty of getting people from a transport hub, particularly train stations, bus stations and ferry terminals, to their final destination. Alternatively, when users have difficulty getting from their origin location to a transport network, the scenario can be referred to as a “first mile problem”.

Solutions to the last mile problem in public transport include the use of feeder buses, bicycle infrastructure and urban planning reform.

Other methods of alleviating the last mile problem such as bike ride systems, car sharing programs, pod cars (personal rapid transit), or motorized shoes have been proposed with varying degrees of adoption.

In late 2015, Ford Motor Company received a patent for a “self-propelled monocycle” intended as a last-mile commuter solution. Bicycle sharing programs have been successfully implemented in Europe and Asia, and implementation is beginning in North America. From the end of 2017, micromobility services came onto the market that offer shared vehicles such as rental e-scooters or bicycles with electric assistance in cities.

E-mobility in cities – Image: Macrovector|shutterstock.com

Due in part to demand from retailers and product manufacturers for expedited (same-day and next-day) deliveries, technology-enabled last-mile technology platforms have emerged. The increased demand for last-mile fulfillment has put pressure on shippers to manage many types of delivery companies, ranging from traditional parcel services to courier services to on-demand service providers, for example, using an “Uber for delivery” model contractors carry out.

Matching delivery supply with the demand created by shippers is a problem being solved by various last mile technology platforms. These companies connect shippers with delivery service providers to facilitate last-mile delivery. These last-mile technology platforms enable real-time data to be received by the shipper and receiver, allowing managers to take immediate action when exceptions such as a late delivery, address error, or product damage occur.

The disadvantage of this technology is the lack of trust among consumers and retailers in such decentralized systems.

Europe & USA: Last Mile Market, courier, express and parcel shipments – Image: Oakview Studios & alphaspirit | Shutterstock.com

Suitable for:

• Europe & USA: Last mile market, courier, express and parcel shipments
• Courier, express and parcel shipments in Germany
• Last Mile – The last mile
• Closing supply gaps in rural regions
• Securing basic services in rural regions
• Japan is already working on the future of tomorrow
• Urban growth – How Japan is setting the course for the future

Principle of digital platforms – Image: Xpert.Digital

More about it here:

• Digital platforms are transforming the global economy

Digital platforms and unified commerce – Image: Xpert.Digital

More about it here:

• Factsheet: Platform Economics – Platform Economics

This statistic reflects the results of a survey on the future of the platform economy in the DACH region in 2017. At the time of the survey, 45.5 percent of respondents agreed with the statement that new procurement markets can be easily opened up thanks to the platform economy.

Platform economy in the DACH region – Image: Xpert.Digital