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Supply Chain Innovation
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Reducing Logistics Costs
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supplier + 3pl management

How to Reduce Transportation Costs With Last Mile Logistics

Posted by Eric Robinson on Apr 25, 2017 8:00:00 AM

When materials and components routinely cross thousands of miles in their supply chain journey, it seems implausible that the last tiny stretch of home delivery could pose a challenge.

However, last mile logistics is an entire facet of delivery tuned to offer solutions to that very problem: the final leg of shipment that ends at a customer's door.

This delivery leg represents a chance to win over customer perception as much as it does order fulfillment. A recent customer survey cited by CSCMP's Supply Chain Quarterly found nearly half of the respondents declined to return to an e-commerce store due to lack of transparency and/or speed in their order delivery experience.

Optimizing your last mile logistics makes all the difference in both overhead and customer satisfaction ratings––and smart companies are learning to get on board.

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Can Changing Up My Last Mile Really Reduce Transportation Costs?

Without a doubt, last mile logistics represents a rich potential for balancing customer delight and reducing your transportation costs. The right last mile logistics choices offer a benefit company-centric shipments can't: the savings they accrue will multiply with every customer-facing delivery.

Depending on order volume, that could add up to thousands or even millions of dollars in savings every year, all through something as simple as carrier comparisons. The pressure of needing to get shipments to customers eclipses the cost to make it happen far too often. This results in a loss of a steady stream of profit in drips and drabs. That's exactly why you need proactive attention when it comes to your last mile approach.

If you don't believe a small logistics change could make a large economic impact, you could look to one of the biggest names in the logistics industry: UPS. By instructing their drivers not to turn left during their last mile delivery routes, the company saves more than 10 million gallons of fuel each year.

If a company that manages to deliver a staggering 19 million packages each day can take the time to make these changes, your business should be able to follow suit without breaking a sweat. The last mile is also responsible for a significant part of your overall delivery costs, so it's simply a smart business practice to focus on and optimize it.

What Does Smart Last Mile Logistics Look Like?

First and foremost, transparency should be an integral part of any shipping option. This isn't just for your own company's peace of mind; GPS-enabled trucks, trains, boats, and/or aircraft automatically deliver to real-time data to your customer.

This, in turn, cuts down on customer service inquiries and frustration on the customer's end, making them more likely to return for future orders and recommend your brand. Technology alone can't perfect your last mile, of course. You'll also need to incorporate proactive planning.

Route planning, another strong suit of UPS, is the best way to develop realistic delivery timelines and select the most efficient driving route before rubber ever meets the road.

Are You Exploring Your Options Yet?

Your last mile logistics options shouldn't begin and end at their basic pricing schedules. Consider the value-added services that each carrier provides before ultimately making a decision. Here are some questions to consider to help narrow down your choices:

  • Which carrier is most popular in my industry or specialty product range? Why?
  • Where does this carrier fall short? Can I count on them to come through for rural deliveries?
  • Does this carrier offer automatic data I can pass on to my customer?
  • Does this carrier offer features like automatic parcel insurance or signature receipt options?

If you still aren't sure which carrier would work best for you, Kenco is here to guide you in the right direction. Not only can we offer suggestions for routes and delivery options using your existing support network, but we can also make recommendations for building new distribution centers in excellent places.

Ultimately, we aim to use our expertise in logistics and planning to save you money. We use respected tools like Llamasoft and real estate analyses to give you a holistic view of your last mile logistics options.

Find a Holistic, Value-Added Partner

We don't just talk the talk at Kenco: we're actually in logistics, so we already know the precise costs of any scaled operation. We stay aware of potentially disruptive supply chain roadblocks and study the labor that keeps last mile humming along.

We're invested in your success and stand ready to offer top-notch advice for optimizing your last mile logistics approach. We don't believe in a one-size-fits-all approach to last mile, and neither should you!

Every shipment and every customer are different, and if you don't build in flexibility to your last mile, your supply chain is more likely to break.

If you're still worried about out-of-control invoices or costly shipping methods, don't miss the chance to read up on some expert insights in our Controlling Freight Costs guide. Your company should be able to tackle every mile without worrying about wasted time and resources––whether it be the first mile from your materials supplier or the last mile to your customer's door.

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Eric Robinson

Written by Eric Robinson

I am a Six Sigma Green Belt specializing in process layouts and equipment implementation. I have four years of project management experience with time study analysis and organizational planning background.