On August 19, a webinar was held to talk about last-mile optimization and the challenges facing the industry today. The webinar was moderated by Cathy Morrow Roberson, President of Logistics, Trends & Insights LLC, with the participation of Neil McEvoy, Senior Management Consultant at C3 Solutions, Walter Heil, Senior Vice President, Business Americas at Locus, and Vishnu Rajamanickam, Head of Market Intelligence at Charlie Pesti.
Here is the link to the Webinar and also some of the discussion points below.
The current situation of last-mile delivery
One of the first arguments discussed was how the COVID-19 pandemic had caused a change in the last mile, with B2C deliveries surpassing B2B for the first time. The main factor in this change is the increase in online purchases due to restrictive lockdowns in force globally. This has caused businesses to abruptly modify their strategies to face a more demanding B2C model.
The higher levels of precision and accuracy required by the B2C model have forced companies to seek new technologies that help them remain competitive and offer the services demanded by consumers. Companies know that it is much more possible for a private customer to file a claim if the delivery conditions are not met than for a business customer to do so, accustomed to greater imprecision in delivery times and schedules.
Technology is the key to the future
These changes demand a more intensive use of technology than the logistics industry was carrying out until now. More information at all times of the shipping process and maximum transparency are factors that B2C customers demand. Companies must deal with offering solutions that almost entirely come from the use of technology. The experts pointed out that data standardization is vital to allow the exchange of information between different links in the supply chain and facilitate the collection of relevant information for both the client and the supplier demand.
The panelists also pointed to cloud-based technology solutions as a primary option for tackling significant challenges across global supply chain networks set in the pandemic environment. Legacy logistics management programs prevalent today act as resistance to scaling up a business due to their difficulty facilitating connectivity and exchanging information with suppliers and clients.
One of the biggest challenges emerging from this new situation is the role of reverse logistics. Companies must incorporate processes that allow quick and straightforward solutions facilitating returns to consumers. For this, technology is, once again, their best ally. The significant difficulties involved in managing shipments and returns in the same warehouse require new technology and personnel solutions. Businesses have to manage more daily movements and avoid, as far as possible, that returned products are damaged. Thus, the way to recycle or reincorporate them into the market requires companies to have a greater flow of information and operate in real-time across the supply chain.
Thus, the last mile integration with the rest of the transport process becomes essential as this comprehensive view of the process is the only one that allows companies to anticipate sudden changes occurring in the market. With the last-mile representing between 28% and 50% of the total logistics cost, it is essential to pay great attention to offer the best service and react to the industry’s ups and downs effectively and proactively.
The labor factor
Labor is a significant cost to the last-mile. An increase in B2C demand necessitates a larger workforce, consequently increasing salary costs. This points to automation as a possible solution, but the implied limitations ultimately make a fully automated scenario unrealistic in last-mile delivery.
The current market inertia leads to improved expectations over quality and service by customers, with supply chains being caught in an uninterrupted increase in shipments and deliveries. All this makes anticipating events and adopting the technologies and strategies that will allow us to face new challenges a necessity for all industry players. Investing in new and better technological tools, improving working conditions in last-mile logistics, and making supply chains more flexible is critical to surviving the market. And the time to do it is now, as it is still possible to anticipate these changes and adapt to them to respond to the needs of a world in constant evolution.