Rethinking Last Mile Delivery in the UK Supply Chain
Last-mile delivery remains the most complex and expensive part of the supply chain process in the UK. Estimates show that the last leg of product delivery accounts for 53% of total shipping costs. And that’s not the only challenge. Operational and regulatory challenges like urban congestion, access restrictions, driver shortages and emission regulations have made last-mile delivery extremely complex. Not to mention the rising customer expectations for faster deliveries and real-time updates.
But there’s some hope amidst all these challenges. Digital transformation and the advancement of technology like AI are helping supply chain leaders optimise their last-mile operations. Below, we discuss several tech-powered strategies that are reshaping last-mile delivery in the UK.
AI-Powered Route Optimisation
The right route selection is instrumental for reducing costs and ensuring timely deliveries. AI and machine-learning algorithms have proven to be very crucial here. These technologies analyse all the last-mile deliveries in a specific location and create an optimised route that minimises distance, fuel consumption, and inefficient delivery stops.
Modern route optimisation software solutions used for last mile delivery UK also pull real-time traffic data. This data is used to update delivery routes in real time. It helps drivers spend less time sitting stuck in traffic and allows companies to live up to their ETA promises.
Anticipatory Shipping
Big retailers like Amazon analyse tons of data to understand product demand and customer purchase behaviour across different areas.
They utilise predictive analytics, powered by AI and machine learning, to forecast the products that customers from different parts of the city are likely to purchase. This data is then used to move the relevant products to the micro-fulfilment centres in each location beforehand, i.e., before customers ever click the “buy” button.
The result? When customers finally place an order, the items are shipped from a much closer location. This has led to shorter delivery times that align with customer expectations.
Urban Micro-Fulfilment Centres
Urban micro-fulfilment centres are small warehouses located within urban areas. The idea here is to reduce the distance between the customer and the product. So when a customer orders an item, it is not shipped from the mega warehouses located outside urban centres. Instead, the items are readily shipped from the nearby micro-fulfilment centres.
These centres cut delivery times and costs significantly. Companies have also invested in robotics and AI technology to make them even more efficient.
As mentioned above, retailers like Amazon use predictive analytics to move products from their big warehouses to nearby fulfillment centres before the customers even place their orders. This makes sure that urban micro-fulfilment hubs are packed with the right products, based on the local customer needs.
Electric Delivery Vehicles
Electric vehicles help address the supply chain challenges posed by environmental regulations.
London’s ultra-low emission zone (ULEZ) is perhaps the most popular example of such regulations. Drivers whose vehicles don’t meet the ULEZ emission standards pay a daily charge of £12.50. These costs can accumulate fast when you consider a delivery vehicle that needs to make several drops across different parts of a city every day.
UK supply chain companies are going green by adopting electric bikes and small EVs. Besides cutting emissions, this move has also reduced delivery times. E-cargo bikes, in particular, are easier to park and move faster because they can use cycle lanes.
Real-Time Tracking and Data Integration
Modern customers want complete visibility into the fulfilment process. From the second they place an order; they expect to receive an order confirmation email/SMS and a tracking link. The tracking link is supposed to show real-time updates on the delivery process.
Data integration across the different players involved in the fulfilment process is crucial for real-time tracking, especially when warehouse systems are automated and synchronised effectively Data must flow freely from the retail platform to the warehouse operators and couriers to give customers accurate ETAs.
In addition, companies can take a more proactive approach and share real-time delivery updates via SMS and email. This helps alleviate customer anxiety and goes a long way in boosting trust.
Flexible Delivery Options
Customers and retailers lose hundreds of millions of pounds annually to failed deliveries and porch piracy. Flexible delivery is one of the measures helping combat this problem.
Retailers have rolled out pickup and drop-off points, out-of-home handoffs, and smart parcel lockers to curb porch theft and failed deliveries. Strategic pickup points also help reduce operational costs and carbon footprint. Instead of delivering items to several doors, a single consolidated pickup point allows customers to collect their items more conveniently.
Final Thoughts
Last-mile delivery is perhaps the most crucial customer touchpoint. A great website and amazing prices can push customers to place their orders. However, a poor delivery process is bound to leave a bad taste in the mouths. Retailers must adopt modern solutions to supply chain challenges if they want to boost customer loyalty and satisfaction.
