Understanding Last Mile Logistics

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We often hear about logistics and the first thing that comes to mind is delivering products from point A to point B. It is not often do we hear the term final mile carrier and we, most likely, do not understand how it plays in the logistics industry. Of all the sections of a transportation network, this is considered to be the most misunderstood. The fact is that, the total cost of a shipment is 28 per cent due to the last mile.

When one talks about last mile, it actually pertains to the final step involved when delivering a product from the distribution center going to the receiver. Despite the name, final mile delivery is not really a mile but it could be as near as a few blocks or it could be as far as 100 miles. When it comes to last mile logistics, the services of parcel carriers are often hired in order for the products to be sent straight to the receiver.

McKinsey and Company revealed that parcel shipment has a market value of over $83 billion and because of the increasing influence of the e-commerce market the number is expected to be twice as much in just a decade as long as the market is mature. Furthermore, shippers believe that last mile logistics is an essential part of the industry and is the reason why it continues to prosper and profit.

With the use of last mile logistics, shippers are able to deliver more products in a timely speed while maintaining the cost as ideal as possible. These two attributes are very essential for companies in the e-commerce niche and those using omnichannel supply chain. It has already been proven that consumers will pay more money as long as it is guaranteed that the last mile delivery will either be instant delivery or same-day delivery.

Big companies such as Amazon have already found the suitable final mile carrier for them while small to medium businesses will have to work into finding one that fits their need. The key is to meet the demands of last mile delivery.

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