How to Succeed With Last Mile Delivery for Ecommerce

When it comes to ensuring a great ecommerce order fulfillment experience for your customers, there's more to consider than how well the order has been picked and packed. First mile, mid mile, and last mile are all equally important phases in the order fulfillment journey -- with the last mile often making the biggest impact on buyer satisfaction. Get it wrong, and your customers will be left with a bad impression of your brand. Get it right, and you have an opportunity to leave a lasting positive impression.

In this article, we discuss the significance of last mile delivery, its role in ecommerce fulfillment, and how you can set your business up with a solution that literally and figuratively delivers. 

What Is Last Mile Delivery?

Order fulfillment and shipping usually involves multiple moving parts across several touch points - from Point A to Point B to Point C and beyond, depending on where a product comes from and where it ultimately needs to end up. The phases of this journey are generally known as the first-mile, mid-mile, and final-mile.

Last mile delivery is the final step of the fulfillment process, which takes place after a package has been prepared in a warehouse and transported from a distribution center. A package might go to several distribution centers before being taken out for last mile delivery. The defining characteristic is that it’s always at the very end, concluded by a visit to a customer’s doorsteps. 

Last mile delivery is the most visible part of the shipping process, since it ends with the actual delivery to the customer. Any delays or errors can have a direct impact on a customer's ordering experience and satisfaction.

Here's a brief breakdown of how last-mile delivery works:

1. Pick Up from Distribution Center

The package is picked up from a local distribution center by a last-mile carrier. This carrier will generally have a truck, van, or bike full of items going to the same area within a city. 

2. Local Transport

The last-mile courier plans an intricate route to deliver each package to its designated delivery address. These orders will be delivered one-by-one, either leaving them on a doorstep, physically handing them off to a recipient, or placing them in a lock box. 

3. Tracking and Delivery Confirmation

Along the way, a last-mile company or distribution center may use various technologies to track and manage the package's journey. This can include barcode scanners, GPS tracking devices, and order confirmation systems. The process always ends with a confirmation of delivery showing the time, date, and personnel involved in the final handoff. 

Because it requires a lot of time and resources across multiple localities, ecommerce brands generally outsource last mile delivery. There are two main options in this regard: using last-mile services potentially already offered by a national carrier like FedEx, or working with a third-party courier that specializes in regional delivery. In either case, working with one of these dedicated partners ensures enough resources and expertise go towards handling the process efficiently.

Types of Last Mile Carriers 

Last mile delivery service providers are far from one and the same. Today’s ecommerce businesses work with companies of a variety of sizes and specialties to get packages delivered to customers’ doorsteps. Service options, reach, and cost all factor into deciding which specific partner is right for you. Here’s a brief overview of the different categories of last mile carriers there are to choose from:

National/Global Shipping Companies

National and international last mile delivery companies are a popular option for those who want to integrate their fulfillment with a larger and farther-reaching network. UPS, FedEx, and DHL are all well-equipped to provide clients with timely delivery across the United States and Canada, offering services that span to the final leg of fulfillment. 

The biggest caveat of going this route is a lack of flexibility. Larger size may mean better reach and access to resources, but it also often forces compromise on contract prices and partnership terms and conditions. 

It makes sense to work with a national last mile delivery carrier if you are:

• Looking to avoid complicated arrangements between multiple service providers
• Shipping to a diverse set of locations across North America
• Wanting quality and consistency of service at any cost
• Selling a wide range of parcels requiring different methods of delivery

Regional Couriers

Because regional couriers typically only operate in major cities, working exclusively on this level would mean fragmenting your network of shipping partners based on what’s available in a given area. Making arrangements between multiple local providers comes with extra work, as you need to coordinate between different schedules and service options. 

Well-established regional last mile couriers in the United States include:

• CDL Last Mile Solutions (East Coast) 
• SpeeDee (North East, Midwest) 
• Lasership (East Coast, Midwest) 
• United Delivery Service (UDS) (Midwest)
• Lone Star Overnight (LSO) (Texas) 
• On Trac (West Coast) 
• GLS (West, West Coast) 

The flexibility and generally faster turnaround times of regional couriers are best for ecommerce brands that ship exclusively to a handful of cities. This limits the number of relationships that need to be managed while maintaining the value these smaller businesses provide over their larger counterparts. 

It makes sense to work with a regional last mile delivery courier if you are:

• Shipping ecommerce orders to a limited number of large metropolitan areas
• Looking to minimize last mile shipping costs as much as possible
• Wanting flexibility with respect to contract terms or scheduling
• In need of fast or same-day delivery

Oftentimes, ecommerce brands will have a mixture of national and regional couriers handle their last mile deliveries. It’s ultimately a question of what kinds of products are being shipped, the nature of services they require, and whether factors like flexibility or price matter more.

The Challenges of Last Mile Delivery

The last mile doesn't just matter from a logistical perspective—any efficiencies or redundancies in this phase can impact a business’ fulfillment efficiency, bottom line, and customer experience. Consider the following potential roadblocks as you plan your company’s last mile delivery strategy.

High Costs

The last mile is considered the most expensive leg of an ecommerce order's journey as it requires a significant amount of resources and labor to complete. Without enough of either, effective last mile delivery becomes exceptionally difficult and harder to sustain. A lack of organization in individual cities means arranging pick-up, transport, and hand-off based on availability rather than service quality or price. This not only means brands pay high service fees that could otherwise be negotiated with a formal partnership but also risks reputational damage if things go wrong. 

Service Consistency and Quality

It’s entirely possible that the last mile carrier you prefer doesn’t offer service everywhere you need to deliver ecommerce orders. In this case, the regional carriers you work with will need to be selected carefully and to equal standards. Having a high-performing partner in one city and an unreliable one in another compromises service quality control while complicating logistics. The more relationships you have, the more of a headache managing schedules, contract terms, and billing will be. 

If you don’t have the time or resources to handle relationships with multiple regional couriers and want to guarantee consistency across the country, a national carrier like FedEx may be the safest option. While it usually comes with the caveats of higher fees and lex flexibility, large companies like these have more checks, balances, and systems in place to ensure service quality. You’ll need to make a decision based on your budget and the level of risk you’re able to tolerate. Compromises may be necessary to offer delivery in some locations. 

Risks to Package Safety/Integrity

Since last mile delivery can involve longer trips that cover multiple touchpoints, it can also pose risks to package safety and integrity. Careless handling can result in damaged or lost packages that ultimately need to be replaced, adding additional costs and potentially damaging a company's reputation with customers. The last thing you want is to put months of work into designing custom shipping boxes only for a package to get damaged during last mile delivery.

Impact on Customer Experience

In today's highly competitive ecommerce market, providing customers with a positive end-to-end shopping experience is crucial. Last mile delivery plays a significant role in this as it makes or breaks the final opinion buyers form of a company. If a delivery is delayed, difficult to accept, or handed off in an unprofessional manner, it can create dissatisfaction that results in lost business opportunities down the road.

How to Succeed with Last Mile Delivery

Even with the above risks in mind, there are still things you can do to ensure the success of your last mile delivery strategy. Following these best practices for choosing a last mile delivery partner will minimize potential risks and lay the groundwork for a positive long-term experience.

Consider the Features and Services You Need

Arranging reliable last mile delivery for your business starts with a bit of reflection. Consider things like delivery timelines, service level agreements (SLAs), and service options for the implications they can have on the final leg of the fulfillment process. If you know your brand’s current and future customers will come from the same cities, a regional carrier would offer service that is just as good as, if not more flexible than, a national one.

Many carriers offer real-time item tracking to provide clients and their customers with added peace of mind. This is worth prioritizing if your products are high-value or are ordered on a time-sensitive basis. 

Multiple delivery options might be necessary if customers want to receive their orders on specific terms, like at home face-to-face or in a local lockbox. Reverse logistics will also need to be a consideration for returns. Take time to identify your business’ ‘must-haves’ so these factors can be used as a basis for its search.

Prioritize Technology-Enabled Service

Good last mile delivery partners appreciate what’s at stake for their clients and invest in technological solutions to ensure consistent delivery results. Dispatch software, route optimization tools, and real-time vehicle and package tracking can make a big difference in the effectiveness and efficiency of the last mile, directly impacting how long customers wait for their packages and perceive their experience. 

Since tracking software and other technology can impact the value you receive, a last mile carrier’s investments in their tech stack should be a top priority when evaluating potential partners. 

Thoroughly Review Your Contract

Contracts, along with the process of signing them, can look different depending on the type of carrier you’re working with. Regional carriers, for instance, are generally more open to negotiating rates than their national or global counterparts. Others might require your ecommerce fulfillment partner to follow specific guidelines for box size and label placement. 

It should go without saying, but read through everything before signing; delays, penalties, and errors can all be mitigated with extra diligence. Meanwhile, terms and conditions can serve as a preview of the kind of experience you’ll have with the company down the road. Will they take responsibility for their role in the fulfillment process? If so, to what extent? Knowing ahead of time ensures you’ll be prepared to respond should any issues arise. Leverage AI in contract analysis to help identify key terms and conditions that could affect your business.

Outsource Last Mile Delivery to a 3PL

Partnering with a third-party logistics (3PL) company like Shipfusion is an easy way to streamline the fulfillment-to-doorstep journey. Our warehouses can take the burdens of accurately and efficiently picking, packing, and labeling orders off your shoulders so you can focus on bigger priorities - like ensuring seamless last mile delivery. 

Reach out to a member of our team to learn more about our robust suite of 3PL services today. 

FAQs

What's the difference between last mile delivery and final mile delivery?

Last mile delivery and final mile delivery are interchangeable terms, both referring to the process of delivering goods from a transportation hub or distribution center to their final destination.

What's the best last mile delivery solution for ecommerce?

Ecommerce businesses are generally best suited to use a combination of different last mile delivery solutions, depending on the type and volume of products they are shipping. Smaller items only require standard postal delivery services, while larger items may benefit from the use of specialized carriers or white glove delivery options.

How do last mile delivery companies work with third-party logistics providers?

Third-party logistics providers (3PLs) often partner with last mile delivery companies to handle the final leg of a product's journey to its destination. This collaboration allows for more efficient and cost-effective transportation, as 3PLs can leverage their network of carriers while last mile delivery companies have expertise in local deliveries.