Emerging Challenges in Last-Mile Delivery

In terms of the logistical impact of e-commerce, the rapid increase in delivery speed has created significant challenges for organizing online orders. In particular, last-mile delivery stands out as the most complex and expensive part of the distribution process.

The main tasks involved in last-mile delivery encompass warehouse management and the transportation of goods to the recipient.

The four main challenges identified

The high speed at which online orders are delivered creates new problems that distribution systems have not faced in the last three decades. Some of the elements and characteristics of last-mile e-commerce delivery services that pose the most significant challenges are:

Online orders

In the age of e-commerce, the order information is received online, mainly from private customers, creating a dynamic and uncertain environment. The number of orders is much higher than for traditional distribution services, which is associated with routing problems, but most orders are incredibly light in weight and volume.

As online buyers often require fast delivery times, online orders need to be processed as soon as they are submitted. All the operations required to deliver customer orders are consolidated quickly.

E-bike. Unsplash (2017)

Short delivery times

Short delivery times, such as next-day or same-day delivery, are increasingly being explicitly requested or at least expected for online orders. This necessitates the development of new modes of transport capable of delivering orders with significantly reduced weight and volume, along with lower delivery costs. Additionally, new delivery strategies must be devised to meet this intense time pressure while maintaining the expected level of service in terms of short delivery times.

Food delivery service. Telemundo (n.d.)

Overlap of customers’ time windows

Online orders often involve home delivery, requiring the buyer to be at home at a specified time to receive the package. Goods ordered online are typically delivered to the customer’s residence. However, there are exceptions such as click-and-collect systems, where the retailer notifies the customer when the order is ready for pickup, and smart cabinets, where the product is delivered in a box that the customer can unlock, usually with a key code. One of the main challenges with home delivery is that customers’ time windows often overlap considerably, leading to preferences for specific times of day for delivery.

Crowd shipping

The collaborative economy refers to emerging activities, services, and initiatives in which individuals and organizations share available resources with potential users for mutual benefit. This concept extends to the transportation sector, where ordinary people, such as non-professional drivers, volunteer their time and resources to provide transportation services.

Conclusion

Each of these tasks requires an appropriate decision support tool. Decision and business analytics provide the necessary tools for data analysis and decision-making. Technologies are being developed that incorporate forecasting and optimization techniques to account for the dynamics of new systems. These tools are essential for effectively addressing last-mile problems.

In addition to the introduction of new technologies and tools, electric bicycles and motorcycles will begin to serve as the primary mode of transportation for last-mile delivery. Users or drivers will need to consider the associated challenges and adapt to using these types of electric vehicles.