Last-mile shipping accounts for 53% of a shipment’s total cost and up to 41% of the total supply chain cost!
In today’s fast-paced urban environment, where customers expect results in the blink of an eye, last-mile delivery poses a unique challenge for logistics companies. The final leg of the delivery process from the distribution center to the customer, is often the most complex and costly part of the supply chain. Did you know that last-mile shipping accounts for 53% of a shipment’s total cost and up to 41% of the total supply chain cost?! And this number is only increasing as supply chain inefficiencies are becoming more costly than ever.
From busy city streets to rising consumer demands for faster deliveries, logistics providers face multiple hurdles in achieving efficient last-mile operations.
The Last-Mile Delivery Challenge
The steady progress of urbanization and the sudden growth of e-commerce has led to a 33% increase in B2B last-mile delivery demand in the last two years, and a 67% increase for B2C businesses.
The rise of same-day and next-day delivery services has also heightened consumer demands for speed and transparency, further increasing the complexity of the last-mile logistics landscape. According to a recent survey conducted in 2022, 86% of consumers prefer to wait less than three days for delivery, while 38% would prefer only to wait one day or less for delivery. The survey also revealed that 56% of consumers are interested in seeing the carbon emission impact of their delivery. Additionally, 56% of consumers demanded greater transparency in the delivery process.
These ever-growing consumer expectations and the increased volume of last-mile deliveries have made it difficult to maintain efficiencies and manage costs. Not surprisingly, 25% of companies state that “delivery efficiency” is their biggest last-mile challenge. Traditional delivery methods are no longer sufficient to meet these evolving demands, leading to inefficiencies, delays, and increased operational costs.
AI-Powered Solutions for Last-Mile Delivery
The last-mile delivery market size is projected to reach $55.2B by the end of 2025. While a lot of retailers already offer same-day delivery, nearly all of them plan to offer this service by 2025, according to a recent study. Supply chain AI techniques offer innovative solutions to meet the current-day demands of last-mile delivery. Leveraging predictive analytics, machine learning, and real-time data analysis, logistics companies can optimize delivery routes, enhance fleet management, and reduce their carbon footprint, ultimately improving last-mile delivery efficiency and customer experience.
Felix Solutions’ Fleet Visibility Solution is a cutting-edge platform that provides intelligent fleet management for businesses. It is programmed with advanced AI-powered algorithms to manage fleets intelligently, optimizing operations and resource allocation for enhanced efficiency.
With a strong focus on a comprehensive tracking platform, it enables real-time monitoring of vehicles, tracking asset locations, driver behaviour, and fuel consumption patterns to maximize route efficiency and enhance fleet performance, safety, and cost-effectiveness. By providing accurate information on vehicle locations and movements, it empowers organizations to make informed decisions and respond promptly to any changes.
The Business Impact of AI in Last-Mile Optimization
Implementing AI-powered solutions for last-mile delivery yields significant benefits for logistics organizations. By optimizing delivery routes and leveraging real-time data insights, companies can lower their fuel consumption, reduce operational costs, and improve delivery accuracy.
With proper route optimization tools, businesses can save up to 20% in mileage and increase their order capacity by 100% without increasing their fleet. Compared to manual systems, AI-powered route optimization algorithms can reduce the cost of deliveries by 20% by reducing the number of kilometres driven, thereby lowering their carbon footprint in the process. In today’s eco-conscious world, the goal of sustainability is a priority for most organisations.
By being transparent about the sustainability of their deliveries, and providing sustainable delivery options to their customers, businesses can strengthen their brand image. Moreover, enhanced visibility and streamlined workflows also lead to improved customer satisfaction and loyalty, ultimately driving revenue growth.
Concluding Remarks
To summarise, AI-powered solutions hold immense potential to revolutionize last-mile delivery and drive efficiency in urban logistics operations. By harnessing the capabilities of predictive analytics and machine learning, companies can overcome the challenges caused by congested urban environments and meet the demands of today’s dynamic market landscape.
Partnering with Felix Solutions enables organizations to unlock the full potential of AI-driven logistics optimization and embark on a journey towards sustainable and cost-effective last-mile delivery. Take the first step towards transforming your last-mile operations and schedule a consultation with Felix Solutions today.
Together, let us transform urban logistics and drive efficiency in last-mile delivery.