The 5 Biggest Benefits of Route Optimization in the Last Mile

By:  Maggie M. Barnett, Esq., COO at ShipHero

Technology is pretty miraculous. Tracking your flight from your own airplane seat; watching your Uber approach your location; even clocking the progress of a DoorDash driver as he circles your complex because he can’t find your apartment – all of these would be impossible without technology, and more specifically, technology in the last mile.

However, eCommerce fulfillment and delivery are high ticket items for eCommerce retailers, and it can be a struggle to justify some of the more robust tech offerings and upgrades with a P&L that barely passes into the black. How can you justify some of the cost to upgrade your current technology? And should you? 

We’re going to examine five of the biggest benefits of using last mile technology, especially as it relates to route optimization and demonstrate the benefits of these upgrades.

Last Mile Delivery Defined

First, let’s define last mile delivery. In the world of eCommerce and shipping, this is the phase of delivery where a product or shipment leaves the warehouse to make it to the customer. This is the route that the Instacart driver takes from Target, with your groceries and random beach towel order in his backseat. It’s the route the UPS truck takes from Amazon’s Fulfillment Center to your customer’s front door.
Optimizing the route in the last mile leads to a host of benefits for both you and the consumer. Here’s how.

5 Benefits of Route Optimization

1. Increased Visibility

Tracking technology, like those mentioned above, have resulted in one giant change for consumers – they know where their stuff is at all times. This means, they know when it shipped, they know what distribution hub it’s at; and they know when it’s out for delivery. They also know when it’s late.

By investing in technologies that expose the last mile, consumers get peace of mind, and eCommerce retailers get a bit more leeway. If a customer can see a product has left your warehouse and has been sitting in a post office three miles from their home for the past four days, the onus of late delivery is technically off of the retailer (you). Now, it is the post office’s fault (for better or worse), that their product is late. This means that the retailer can cut back on the number of “where’s my package?” emails, chat requests and phone calls and focus back on the process of shipping.

It might be hard to put a price tag on the time you’ve gained back in your day, but consider the employee hours necessary to respond to these messages or to track down orders when this type of tracking wasn’t available. 

2. Faster Delivery Times

The fact is, the more you shine a light on something, the clearer it becomes. By providing end-to-end shipment tracking, order delivery times have come under more scrutiny, encouraging questions of some retailers and carriers as to why it can take so long for one item and not as long for another.

This is all part of the “Amazon Effect” – the erroneous belief held by many consumers that just because Amazon can deliver fuzzy dice and a gallon of ranch dressing in 2 days, that any eCommerce brand should do the same. Regardless of how plausible this is, it is a concern that has forced many eCommerce companies and carriers to confront their delivery process and speed to make improvements.

3. More Accurate Delivery

Another stalwart of the last mile delivery process is the proof of delivery. It’s no longer acceptable for a carrier to throw a package on the porch and call it a day. Now, carriers and eCommerce fulfillment providers are requiring more evidence that the package was delivered. This typically takes the form of photos showing the package and delivery address in the same shot; a signature by the package’s recipient; and/or barcode scanning.

Once again, exposing the entire delivery process from warehouse to doorstep has led to higher accountability for carriers as consumers now know when a package was supposed to be delivered and can easily tell when a carrier has missed the mark.

4. Lower Costs for Gas and Maintenance

Some organizations, especially those in larger cities, have started to experiment with urban warehousing and micro-warehousing. Both of these are exactly how they sound: retailers use warehouses located in urban centers; or use smaller locations to store a fraction of their most popular inventory to cut down on fulfillment and delivery times for these orders.

Urban warehousing was again popularized by Amazon when they began their same-day delivery in major U.S. cities. However, it does more than just shrink delivery windows; it also allows for lower emissions from delivery vehicles, and lower costs for gas and maintenance. These are all places where carriers have struggled to cut costs in the past, and with the always fluctuating cost of oil, it’s nice to know that there is some way to keep these expenses in check.

5. Getting More From What You Already Have

One more tactic that some retailers are taking in order to cut down on delivery times and enhance last mile delivery, is the use of brick-and-mortar retail locations as fulfillment centers. In some cases, this could mean using a store that is currently open for shopping to also fulfill orders for nearby addresses. However, it has also given rise to a phenomenon of dark stores.

Dark stores are repurposed brick-and-mortar storefronts that are now optimized for picking and packing and order fulfillment. This was first seen on a large scale during the pandemic, when grocery store chains like Whole Foods and Kroger converted some of their locations into dark stores. This is an especially handy option for retailers to leverage the proximity of their retail locations to major areas to convert online purchases into Buy Online, Pick Up In Store (BOPIS) sales instead.

More Changes, More Opportunities

If the past 20 months have proven anything, it’s that people and organizations, even businesses can be adaptable when conditions warrant it. What that means for last mile delivery and every other process on the supply chain is that more changes are sure to come. However, what type of opportunities these changes will bring is the more exciting question. 
If you’re new to ShipHero Fulfillment, please schedule a meeting today with our experts to learn more about how we can help you get your orders picked, packed, and delivered with our fulfillment service. No setup fees – simply pay as you go. ShipHero works to ensure that organizations invest in the solutions that match their needs, to improve productivity, revenue, and success.
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Maggie M. Barnett, Esq., COO
About the author:  Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial and administrative procedures, reporting structures and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management and a passion for business transformation. She is known for her expertise in delivering operational excellence and an ability to provide guidance and mitigating risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.
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