LAST MILE CHALLENGES

In eCommerce, the Last mile refers to the process of transporting the goods from the warehouses or darkstores to the doorstep of customers. Given varied resources and local terrain, last-mile delivery can vary accordingly to suit the needs of the customers. However, in the resource-constrained and highly competitive environment of today’s business, it becomes a challenge to strike a balance between the allied costs, time, and quality. Though there exists no perfect stance to address this situation, businesses try to address the issues highlighted hereunder.

● LACK OF PROPER RESOURCES - when it comes to last-mile delivery, we generally have noted that various factors impact the transit. In tier 1 cities, where there is an abundance of delivery agents and optimum infrastructure, there is the issue of traffic and too high demand. In tier 2/3 cities with less traffic and relaxed demand, there are fewer delivery agents and thus seller’s market.

● ROUTE OPTIMISATION AND ADDRESS ISSUES - this is more prevalent in tier 2/3 cities where there is a lack of proper documentation and cartography of the roads and addresses, owing to which there is a notable decline in the efficiency of the delivery process. Which in turn materializes into growing distrust towards eCommerce. What we have to realize is that these cities pose an important segment of the country that is revenue fertile and ready to be tapped for eCommerce services.

● VOLATILE DEMAND - it should also be noted that demand is relatively stable in tier 1 and metropolitan cities, however in tier 2 and other cities, demand generally follows volatile behavior triggered by cyclicality and offers ( if placed by the eCommerce platforms) thus there needs to be a more optimized model of last-mile delivery channels that can accommodate such drastic fluctuations. If not there would be losses made when deliveries are failed and losses made when there is no method to transport the goods in times of very high demand.

A lot of work needs to be done in the domains of last-mile delivery and demand fulfillment. There is a rising number of agents that are working in the same domain but are stretched out thin due to high demand, fewer delivery agents, and volatility. Additionally, the question looms of whether to keep the entire process in-house or delegate it to a 3pl logistics provider. We at Edgistify believe in continuous optimization and making the entire process of logistics and warehousing smoother than it is so that you can focus on what you do the best; hope you enjoyed this week's article, we'll see you next time.