The Inside Scoop: Final Mile Logistics
What is Final Mile?
Shippers are constantly facing the challenge of meeting their customers’ constantly growing expectations. These range from lower cost, quicker deliveries to increased efficiencies, which are driving factors behind the demand and boom that we have seen in the logistics and transportation market. The industry is expected to grow to more than $3.21 trillion by 2021. So, what does this have to do with final mile logistics? Last miles will play a critical role in heading the growth of the industry as more companies look to increase their e-commerce sales and subside services. However, final mile isn’t as simple as everyone would think. Here we will define final mile logistics and highlight some challenges it faces.
Defining Final Mile
As cliché as it sounds, the true definition is found in the name. Final mile logistics in the simplest terms, is getting the product to its final delivery destination. The focus of final mile logistics, or sometimes called “last miles,” is to transport the items to the end user as quickly as possible. Final mile developed as an attempt to manage the difficulties that follow delivering to locations without loading docks and other receiving and storage facilities. These locations include residences, small retailers with limited storage, job sites and retail stores with limited access. While final mine normally means delivering small orders to residences, there are challenges that come with delivering larger shipments more complex locations.
The Challenges Facing Final Mile
In order to understand the challenges of managing final mile logistics, it is primarily pertinent to understand the high volume of businesses which are implementing this type of shipment and their reasoning. An example of a business that would benefit from final mile is a small chain of boutiques. Due to the lower, less consistent sales volume and limited storage space, it isn’t always realistic for small boutique owners to order full truckloads of product. However, they are most likely ordering pallets which are being transported to each location via LTL (less than truckload). The issue is the lack of loading docks, which requires the LTL provider to use specialized equipment, which automatically increases the price. In addition to this driving up the costs of delivery from repetitive loading and unloading of pallets, you increasingly run the chance of having damaged goods, which would in turn be another cost.
In order to counter this scenario, some shippers are looking to build final mile solutions; however, they are facing challenges in finding local final mile providers. Other challenges remain as well, such as shippers still having to manage and keep track of multiple pieces of paperwork for each load. Another challenge is that many shippers want to manage their own final miles in order to cut costs, but they don’t sufficiently understand the benefits of TMS, which comes with its own set of challenges.
To find out more about how C.L. Services can help you and your final mile solutions please visit our website or reach out to a sales team member.
Public Relations and Marketing Intern, C.L. Services