Trends & Innovations in Final Mile Delivery Services

Final mile delivery presents a problem in logistics that may go forever unsolved.

Getting a package to its ultimate destination often involves navigating densely populated urban areas, managing unpredictable traffic congestion and finding appropriate parking, all just to complete a lone delivery to an individual household or business. It’s an inherently inefficient process, particularly when compared to moving freight across large distances by the truckload.

And therein lies the problem: a company’s last-mile deliveries present so many shifting variables that even today’s machine-learning tools can’t come up with a universal solution (but more on that later). Thus, despite eMarketer’s estimates that last mile delivery accounts for a staggering 53% of a company’s total shipping costs each year, we’re left without a master shipping optimization equation for the time being.

Instead, we see other significant improvements, innovations and tools spreading throughout the industry to aid logistics experts in optimizing final mile efficiency. Here are a few major trends and innovations currently changing the way we approach the final mile:

Autonomous Vehicle Development & Deployment

Autonomous or “driverless” vehicles are designed to perform certain tasks and respond to environmental stimuli without human intervention. In an age when increasing numbers of consumers are shopping online for fast, contact-free deliveries, autonomous vehicles carry the promise of rapid shipping, improved safety while in transit and a reduction in human error.

However, developing reliable autonomous systems remains a major undertaking. Outfitting trucks with the high-tech lidar, radar, cameras and GPS plus systems needed to safely manage sudden road hazards isn’t easy (or cheap).

In theory, destinations will someday be pre-programmed into a driverless vehicle according to optimized routes while also cutting down on travel time (since no drivers also means no need to stop for a bite to eat or to observe Hours of Service regulations). These machines are still in early testing and development phases in most states, awaiting federal regulations to determine any necessary safety standards before being approved for interstate travel.

In addition to autonomous trucks and vans, the use of drones for aerial delivery is quickly taking shape, offering a cost-effective alternative to traditional package delivery systems. Drones are an excellent solution for delivering goods to locations lacking sufficient infrastructure for easy ground delivery — plus, they avoid the issue of traffic congestion altogether.

Other challenges facing the expansion of autonomous vehicles include:

• Standardization of equipment to accommodate vehicles from various providers
• Limited delivery range due to insufficient battery power
• Slow electric vehicle & drone recharging times
• General distrust of autonomous technologies

AI & Machine Learning Integration

Through complex algorithms, AI enables machines to perform tasks which previously required careful human guidance. In fact, machine learning (a subset of AI) makes it possible for machines to not only perform these tasks but actively learn from them, analyzing mass amounts of data and interpreting patterns to make statistical predictions.

Businesses are already using AI to help improve last mile deliveries in several ways:

1. Delivery route and schedule optimization – With its massive analytical capabilities, AI can quickly review delivery data and use predictive analysis to optimize delivery routes and delivery schedules. Route optimization can drastically reduce the time and fuel consumption required per delivery.
2. Customer service – AI-powered chatbots and virtual assistants are capable of scanning and analyzing large amounts of data to quickly address common customer questions and improve the overall customer experience.
3. More accurate package tracking – The integration of AI-powered visual recognition technologies can greatly reduce human error in package sorting, damage recognition, and even security. Capable of reading and interpreting barcodes and other text on packages, new industry tech can quickly extract a package’s destination, contents and handling requirements while providing real-time updates on its current location. Additionally, these algorithms can learn to recognize common package shapes and sizes to flag when something appears damaged.
4. Enhanced package security – AI-powered facial recognition technology can be used to authenticate personnel involved in package handling and delivery processes, greatly reducing the risk of theft and unauthorized access.

Innovative Delivery Alternatives

Perhaps the most intriguing trend shaping the future of last mile services is the expansion of delivery alternatives. These emerging strategies stem from both technological advancements and practical methods made to reduce time and costs associated with the final mile, including:

• Delivery lockers and other secure drop-off/pick-up points
• Corporate partnerships and collaborations for shared delivery networks
• Peer-to-peer delivery services
• Last mile delivery robots

Despite sounding like something out of science fiction, drones and robots are undeniably part of the industry’s future final mile delivery plans (development may even be further along than you think). They present shippers with an environmentally friendly final mile solution while reducing costs and minimizing wait times for customers — which explains why companies are investing heavily in the prospect of turning automated delivery into a part of our daily lives.

Alternatives to traditional warehouse-to-door delivery methods are already gaining traction in urban areas, where it is difficult (and costly) to deliver to multiple addresses at once. It’s much easier for drivers to deliver packages to a group of secured lockers on the first floor of an apartment building rather than going door-to-door.

The success of these modes is largely contingent on whether customers buy into new delivery methods enough to warrant an entirely new shipping infrastructure.

Bonus Trend: Warehouse Decentralization

By strategically dispersing smaller warehouses closer to their customer base, companies are able to minimize the distance traveled during the crucial last leg of delivery. This reduction in distance translates to lower fuel consumption, decreased transportation time and subsequently reduced costs.

By optimizing a company’s stock allocations across multiple warehouses, businesses can reduce the overall shipping distance for final-mile delivery, bringing additional cost savings. Decentralized warehouses can also enhance inventory management by allowing businesses to better match supply with local demand, minimizing the risk of stockouts and emergency shipments.

Solving Final Mile with First Call Logistics

Though the last-mile delivery puzzle is far from solved, these trends suggest a few ways businesses can simplify this too-common problem that’s plagued shippers and logisticians for decades. Embracing innovative final-mile delivery solutions isn’t just a competitive advantage anymore either — in today’s fast-paced, customer-centric world, it’s virtually a necessity.

Please feel free to explore the benefits of partnering with First Call and let us know about your last mile, expedite and emergency shipping needs in greater detail through our contact page here.