As ecommerce continues to grow, and the last mile carrier market shifts and expands, it’s important to understand how last mile logistics works. In this article, we’ll cover everything there is to know about last mile carriers in 2023.
In this article we’ll cover:
- What is a last mile carrier
- Why last mile carriers are important
- How last mile delivery service works
- The steps of last mile delivery
- The cost of a last mile carrier
- How fast last mile logistics is
- Top last mile carriers in the U.S. and Canada
- How to pick the best last mile carrier
- Last mile FAQs
- The GoBolt difference
Let’s get started.
What is a last mile carrier?
In layman’s terms, a last mile carrier is the company that sends a professional driver to deliver orders to your shoppers’ door. Or, in supply chain jargon, a last mile carrier is the company that transports inventory from a shipping hub to its final delivery destination.
Common examples of last mile carriers in Canada include FedEx, UPS, DHL, Canpar. And in the U.S., examples of last mile carriers include USPS, FedEx, UPS.
As a brand in 2023, you almost certainly know a little (or a lot) about last mile logistics. Still, some may be wondering: What is a last mile carrier? And why are last mile carriers important to my brand?
Ecommerce boomed throughout 2019 and 2021, and with that we saw a massive shift in consumer buying behaviors. As customers turned to online shopping, global ecommerce sales grew from 15% to 21% of total retail sales. And even with the return of in-store shopping as seen throughout 2022, experts say there is still plenty of room for ecommerce to grow. By 2026, ecommerce is expected to hit $5.4 trillion (27% of retail sales), up from $3.3 trilion today.
Why are last mile carriers important?
For brands, your last mile delivery logistics solutions can make or break the experience for shoppers. And if you’re outsourcing your final mile logistics, you’ll want to be sure you are working with a provider that will elevate the last mile for you and your shoppers.
Let’s walk a (last) mile in your shopper’s shoes for a second.
Imagine your shopper just bought a beautiful sectional sofa for their new apartment. But after a week, they still haven’t received an update on the delivery status. They feel left in the dark and have no idea when to expect the delivery. When they finally do get a delivery date, they are given an ambiguous delivery window, meaning they have to wait around all day for the delivery. And to make matters worse, upon arrival the sofa is damaged.
Unfortunately, last mile delivery problem like this can leave a negative and lasting impression on your shoppers. And for todays’ shoppers, expectations around delivery are sky high. In fact, after just one poor delivery experience, 84% of shoppers say they wouldn’t return to shop with that brand again.
But here’s the real kicker. As the brand, you likely had very little control over your shopper’s final delivery experience. It’s the last mile carrier who left the final brand impression. That’s why it’s essential to partner with a last mile carrier you can trust, and one who can help reduce last mile delivery problems. Your brand reputation depends on it.
Last mile delivery may be one of the most challenging aspects of supply chain management, but it demands your attention. Here are a couple more reasons why last mile carriers are of the utmost importance.
1. Meet shoppers’ expectations
Today’s shoppers have come to expect fast, free delivery. And shoppers have the power to compare infinite options to find the best experience before making a purchase. In a study on shipping and delivery expectations, 50% of consumers surveyed said they would avoid retailers that didn’t offer free shipping, while 77% said they have abandoned their cart due to unfavorable shipping options.
Slow or expensive shipping is enough to compel a shopper to abandon their purchase and opt for your competitor instead.
2. Create a positive delivery experience
Ninety-eight percent of shoppers say delivery is a key part of their brand loyalty. But 44% think brands are falling short of providing a positive final delivery experience. Poor last mile logistics are leaving them dissatisfied, disgruntled, and unlikely to become repeat customers. What’s more, 47% will not order again from a brand with poor delivery visibility.
The message here is clear. Brands need to create a seamless and pleasant last mile delivery experience for their shoppers. Clear communication between you, your last mile carrier, and your shoppers can make, or break, their experience. And part of this is providing your shoppers with transparent communication through last mile delivery tracking. This includes updates on their order’s shipping status, and timely updates on the status of their delivery.
How does last mile delivery work?
Before we get into exactly how final mile delivery works, let’s begin at the original source: the manufacturer. If your brand manufactures items in England, and ships the products overseas to a fullfillment center in New York, that is considered freight, or first mile. The last mile delivery service takes the product from the fulfillment center to it’s final destination. So in this case, the final mile delivery process would be from the fulfillment center in New York, to your shopper’s door.
What are the steps of last mile delivery?
Last mile delivery can be broken down into the following steps:
- Order received. After the shopper has placed their purchase online, the order is received by the central ordering system.
- Prepared for shipping. At this point in the process, after the order has been fulfilled and packed, the order is sent to a cross-dock (or transportation hub) where it waits to be placed on a truck for final delivery. If you are working with a 3PL (third-party logistics) partner that does both fulfillment and shipping, then following being picked and packed, the order gets sent to the shipping staging area.
- Truck assignment. The order is now assigned to a truck for delivery. Truck assignment is usually planned by address or delivery zone. Other considerations for truck assignment also include what type of labor is needed for the deliveries. If it’s a white glove delivery, those orders will be assigned to a driver that has been trained on installation. You’ll also want to ensure your courier partner utilizes technology to optimize their routes for speed of delivery and cost efficiency.
- Order is scanned. Before being loaded onto the truck, the order gets scanned. This allows the tracking to be updated to reflect that the order is now leaving the warehouse or transportation hub. It also gives traceability to the order and where the product is moving to next. This step can be used to give customers a heads-up that their delivery is on the way.
- Order is delivered. The final stage of last mile delivery is when the order reaches it’s final destination. Depending on the type of delivery, items can be left at the doorstep, delivered just inside the front door (threshold delivery), room of the shopper’s choice, or even installed in the home (white glove delivery). For example, at GoBolt we have last mile service for Big & Bulky items (like furniture) which may be delivered and brought into the home or business, or our Parcel delivery service for smaller packages (like apparel) where the package might be dropped at the door. We’ll provide more context on these different levels of delivery service below.
How much does last mile delivery cost?
The cost of last mile delivery service can vary widely based on a few different factors. For example, it’s a lot cheaper to deliver a yoga mat than it is to deliver and install a piece of fitness equipment.
While the cost of last mile delivery can seem high, you cannot put a price tag on shopper satisfaction. Brands can be tempted to pass on shipping costs to their shoppers, but it tends to deter them from making purchases. Case in point: in this survey, 84% of shoppers made a purchase specifically because shipping was free.
You really can’t underestimate the value of a positive shopper experience. Repeat purchases increase your customer lifetime value (CLTV), and new business generated by word-of-mouth goes a long way to recoup your shipping costs.
What elements of last mile delivery impact the cost? Here are a few variables that will drive the cost of last mile delivery up or down.
1. Size of items
Unsurprisingly, heavy and large items cost more. Most conventional couriers like FedEx and UPS will only accept packages up to a certain weight limit. And with costs rising proportional to weight, it stops being economical to ship heavy packages by courier even before you hit the limit. Once your package exceeds a certain threshold in weight, you should consider using a 3PL that can provide end-to-end logistics by using their own fleet of delivery vehicles.
2. Delivery location
If you’re delivering within large cities, you’ll likely get better rates. But if you need to deliver to remote locations where there’s fewer service options, you may be charged a premium. At GoBolt, pricing is tiered based on delivery zones. And an added bonus: there is no fuel surcharges on first-party parcel and EV deliveries.
How quick is last mile delivery service? Speed definitely plays into the overall costs of final mile delivery. The cost and speed will also depend on your agreement with the carrier. If you want to give your shoppers the ability to book an appointment for a delivery window, or to get their order delivered next day, it will cost more than if you offer a longer, more flexible delivery timeframe.
4. Level of service
The level of service pertains to what’s expected of the delivery person, whether it’s sufficient to leave items at the door, or whether they’re expected to bring heavy appliances up a flight of stairs. Each 3PL or last mile courier will offer different service level options.
There are four main levels of delivery service:
- Curbside Delivery: The order is dropped off at the shoppers doorstep, outside the home or place of business.
- Threshold Delivery: The order is delivered just inside the front door.
- Room of Choice Delivery: The last mile carrier driver will deliver the order inside the home or place of business to whichever room the shopper prefers.
- White Glove Delivery: The final mile carrier will send one of their trained delivery professionals who will bring the item inside the home or business, to the exact spot where the shopper would like it set-up. The trained delivery professional will proceed with installation according to the product specifications, and will take away any packing materials or garbage when they leave. This last mile delivery service is typically the most expensive, but done right, white glove delivery really benefits your brand.
How fast are last mile carriers?
The last mile is often the quickest leg of the logistics journey. The orders depart from the fulfillment center and head to the shopper’s address. Last mile carriers deliver all the packages they put on their truck within the day.
Of course there may always be delivery exceptions which may get in the way of how quickly an order arrives. A delivery exception is when the delivery is interrupted due to unexpected reasons. This can result in deliveries being delayed or even undeliverable.
Delivery exceptions can include:
- Inclement weather
- Lost or damaged orders
- Issues with the delivery address
- Holidays or major events
- Missed hand-offs with the shopper
Who are the top last mile logistics companies in the U.S.?
Some examples of top last mile logistics companies in the U.S. include:
Who are the major last mile carriers in Canada?
The major players in Canada include:
- CDS Logistics
How do I pick the best last mile carrier for my business?
Here are the top features you’ll want to look for in your final mile carrier partner:
- What are their operational and delivery schedules? Do they deliver up to 7 days a week, including holidays?
- Have their operations been optimized to be quick and cost-effective. This may include ML route planning. At GoBolt, our machine learning can identify a route combination that will achieve the shortest travel time and improved on-time delivery (OTD).
- Does their technology allow you to integrate your ecommerce platform with their systems for seamless fulfillment and delivery?
- Do they offer last mile delivery tracking to both shoppers and brands? For example, GoBolt’s system leverages email, SMS and our tech to free shoppers from big delivery windows. Plus real-time truck tracking allows shoppers to see exactly when their order is arriving. And for brands, they are provided with a portal where they can login to view delivery status, timing of executions, and proof of delivery, including photos and signatures.
- Do they encourage two-way feedback to help improve the experience for both the brand and your shoppers? At GoBolt, we encourage shoppers to review their delivery experience, and we track and follow-up with any low NPS scores to address concerns in order to make continuous improvements.
- Does the carrier have experience with big and bulky delivery? This can include large, heavy, or hard to handle products like furniture, appliances, and fitness equipment.
- For markets the carrier may not serve, are they willing to negotiate the best shipping rates for you with external carrier partner? At GoBolt, brands have access to the best delivery rates and transit times with our preferred carriers
- Do they have a sustainability mandate and focus their efforts on minimizing their environmental impact? GoBolt provides electric last mile solutions. We own a fleet of electric vehicles and provide carbon offsets to ensure that your deliveries are made sustainably and without fuel surcharges.
Last mile carrier FAQs
Confused by all the supply chain jargon? You’ve come to the right place. We’re demystifying some of the most common terms you’ll hear.
What is last mile delivery?
Last mile delivery is transporting packages from their fulfillment center to their final destination, typically a home or place of business.
What’s the difference between last mile and final mile?
The answer here is pretty simple. When it comes to the supply chain, final mile and last mile refer to the same thing and can be used interchangeably.
What is last mile delivery tracking?
As mentioned earlier, last mile delivery tracking is of the utmost importance to the overall shopper experience. And needless to say, it’s also crucial to brands, as it provides necessary delivery performance insights. How does delivery tracking work and how is it different for shoppers and brands?
- Tracking for brands: Tracking gives brands a birds-eye view of their last mile logistics. The insights gained from delivery tracking gives brands and their carrier partner the opportunity to optimize the delivery process. These insights can help optimize truck space, delivery routes, and provide stats on the number of packages that are delivered on time.
- Tracking for shoppers: Tracking a delivery through real-time insights (whether via email, web page, or SMS) gives shoppers intel as to where their shipment is. Ideally, through last mile tracking, they can see the drivers ETA, interact with their driver, and leave a review of their experience after the delivery.
What is the “Last Mile Problem”?
The last mile problem refers to the gargantuan task of optimizing costs, speed, and efficiency on the last mile.
What does “Accepted by Last Mile Carrier” mean?
It means your shipment has been received by the carrier who is tasked with the final delivery.
What is first mile delivery?
First mile delivery refers to the first leg of the shipping journey where product is often transported from its factory to a fulfillment center. Also commonly referred to as “freight delivery.”
How GoBolt differs from other last mile carriers
GoBolt is a technology company building the largest sustainable supply chain network. GoBolt partners with brands to deliver a complete end-to-end shopper experience, including last mile delivery logistics solutions.
From small parcels to big and bulky items, GoBolt will enhance your last mile delivery experience.
Here’s how GoBolt differs from other last mile carriers:
|Big & Bulky Last Mile||Parcel Delivery|
|Flexible delivery options. Choose from threshold, room of choice, or white-glove service.||Same-day and next-day shipping. Offer your shoppers convenience and speed in major metropolitan areas.|
|Appointment booking. Your shoppers can select a shortened delivery window that is convenient for them.||Optional contactless delivery. Confirmation of delivery can be captured via signature or a photo.|
|Track and notify|
Your shoppers will receive SMS notifications and access to our truck tracking app so they can see exactly when their delivery will arrive.
|Customer-centric last mile solutions|
We treat your shoppers as if they are our own. Our customer support team works up to 7 days a week, including holidays. We cover live phone, chat, social and email support channels.
GoBolt has a deep commitment to sustainability. Our goal is to provide brands with electric last mile solutions. And our mission is to provide carbon-neutral first party deliveries.
Final notes on last mile carriers
The last mile is the first thing shoppers are going to remember about their experience with your brand, so ensure it’s a positive one. By familiarizing yourself with the steps and working with a committed partner, you’re one step closer to a great customer experience in the last mile every time.