What is first mile and last mile delivery?
First mile and last mile delivery (first/last mile) has become increasingly important in today’s logistics marketplace. First mile is the first leg of the shipping journey whereas last mile is the final leg of the journey. The middle part of the logistics lifecycle usually goes relatively smoothly, but due to loading, unloading, and multiple stops, more problems happen in the first and last mile than in any other part of the process. This is not an insignificant problem, the United States spends more than 1.5 trillion dollars annually on transportation logistics, and issues anywhere along the line cause added expenses.
First mile is the initial step in the product moving along the supply chain to the final buyer. This is when the product goes from the manufacturer, shipper, or retailer to the shipping company or transit hub. The exact definition of first mile depends on who is shipping the goods. For retail stores, the first mile might be from the store to a warehouse or fulfillment center. For manufacturers, it could be from the manufacturing plant to the warehouse. First mile challenges generally arise due to visibility issues. The first leg of the journey is very labor-intensive with lots of phone calls and a variety of different shippers coming and going. It is easy for companies to lose track of their products. This is especially true for smaller companies that may not have the resources to keep track of everything. If a company’s shipments are delayed on the first leg it could impact the whole journey delaying the product’s final arrival at the consumer. If the product does not get to the consumer on time, the company may lose orders in the future.
The last mile is the final leg of the supply chain where goods are shipped from the shipping company or fulfillment center to the final destination at the consumer. This is often the products’ second arrival at a shipping company or fulfillment center just prior to going out to the end customer or buyer. Consumers are increasingly expecting fast delivery to their homes or offices, making this step very important. COVID has accelerated this trend with demand growing dramatically within the past year. Last mile delivery is complex due to small, frequent deliveries often taking place in congested urban areas. Last mile deliveries are not only complex but they also expensive. The high cost is due to tight timelines on delivery, the added time it takes to make multiple stops, and the planning involved in optimizing delivery locations.
Despite the cost and complexity of first/last-mile deliveries, the trend of delivering directly to consumers is only expected to expand. Delivery service is now part of the product and cannot be separated out. The number of retail stores is decreasing as home deliveries are becoming more common. Increases in direct-to-consumer deliveries are compelling logistics companies to innovate. Logistic technology companies are developing a number of solutions to address first/last mile issues. Track and trace visibility applications are finding new ways for shippers of all sizes to track their products. Delivery companies are experimenting with driverless trucks and drone delivery options. Governments are getting involved too with cities exploring solutions like neighborhood package consolidation centers and designated loading zones for package deliveries. As direct-to-consumer deliveries continue to grow, finding first/last-mile delivery solutions is more important than ever.