First-Mile Delivery

The logistics supply chain process starts with first-mile delivery. It is the first step in picking and packing services that courier companies offer sellers. In most instances, the first-mile delivery operations begin with the merchant contacting the shipping company to move their shipment from one place to another. Although the idea is the same, several stages are involved, along with several variations. The application of first-mile delivery depends on factors like the industry’s size, type and scale. 

Contrary to popular belief, first-mile operations are as important as last-mile operations. It should be given enough attention and focus on streamlining order fulfillment. This will more likely give you the desired outcome along with customer satisfaction.

First-mile delivery also refers to the first stage of transportation when a parcel moves from the seller’s warehouse. This process is carried out when the courier agent picks it up from its origin to take it to the warehouse. Upon reaching the courier hub, it is packed, labeled, arranged, and transported to customers. First-mile delivery optimisation should be prioritised as an integral part of the supply chain in e-commerce.

What is First-Mile Delivery?

In a nutshell, first-mile delivery is the movement of goods from their first-mile hub (merchant or warehouse) to the next point, where goods undergo a sorting process. They are labeled, sorted, arranged and then forwarded. 

First-mile processes can vary depending on the kind of business in question. First-mile for retailers primarily deals with good shipment to the respective stores from the local distribution centers. Regarding manufacturers, the first mile includes the transportation of finalized goods to distribution centers from a manufacturing factory or a plant.

For instance, if you are selecting a courier company, the first-mile process will involve the product delivery to their warehouse from your warehouse. First-mile is the first step that lays the groundwork for the logistics processes that come next. It is quite impactful to supply chain logistics. This increases customer satisfaction with their purchase and delivery time. 

For packers and movers, the first-mile process consists of picking up goods from the customer’s premises and moving them to the warehouse. For e-commerce service providers, it involves collecting goods from retailers and moving them to third-party providers (3PLs). Then the product is given for last-mile delivery to the end user. Merchants or sellers availing first-mile delivery services from a third-party service provider need to provide details such as the pick-up address and package details (weight, dimensions and the like).

First-Mile vs Last-Mile Delivery: What’s the Difference?

To simplify things, first-mile delivery deals with the delivery process of a supply chain. Whereas last-mile delivery is the final step of the supply chain.

First-mile is the part where the product is acquired and transported from the manufacturer via a courier service to a goods carrier. Last-mile delivery is the last stage, where the order is delivered to the customers. Despite being at the opposite poles of the supply chain process, we can parallel both first-mile and last-mile delivery processes in several aspects. 

Last-mile operations are heavily involved in the movement of goods from transportation hubs to the location of delivery. At this stage, companies can implement various optimization strategies and innovative approaches. This helps maintain a competitive edge and stay relevant to the whimsical consumer base.

Completely streamlining the first-mile delivery process paves the way for a more perfect last-mile delivery process. Both these processes are heavily codependent on each other and directly impact customer experience. 

E-commerce providers should communicate well with logistics and retailers to ensure maximum customer satisfaction in last-mile and first-mile services. As a modern customer, last-mile delivery agents ask you to sign an order receipt or scan packages digitally to update the delivery status.

Both first-mile and last-mile delivery providers have implemented various automated and relevant software in their operating systems. This has enabled them to cut down on costs and time. These operations have been addressed with readily available systems by streamlining routing and warehouse management. Nearly every manual operation has been replaced with innovative technological implements necessary for large-scale supply chain processes. 

Some other important points of distinction have been explained below:-

Point of Distinction	First-mile Delivery	Last-mile Delivery
Direct to Consumer (DTC) model	First-mile shipping is the transportation of goods to the retailer from the supplier.	Last-mile delivery is the transportation of the packages to the end user from the store.
Size of the package	First-mile shipping involves carrying large loads of unmarked and unsorted boxes.	Last-mile delivery is mainly involved in direct or branded deliveries. Most individual orders shipped to the end user are smaller and more compact, with individual labeling and packaging.
Packaging	Goods in first-mile delivery are loaded together on pallets for maximum use of space. No customisation of packaging is done.	Goods involved in last-mile delivery are packaged and labeled individually. These are sometimes customized to give the customer a pleasant unboxing experience.

Why First-mile Delivery is Important for E-commerce?

First-mile delivery is the first step that a service provider takes in logistics or order fulfillment. It makes a holistic impact on the supply chain and delivery process. The first-mile delivery process provides precise package details for further delivery processes. It ensures that the inventory is properly organized and the supply chain operates orderly. This further streamlines the proper packaging shipment by preventing any potential mistakes. All in all, it paves a smooth path for a seamless middle-mile and last-mile delivery process.

Building a sturdy foundation with first-mile delivery is critical for seamless operations in the following stages. It also adds to customer satisfaction as enhanced supply-chain processes directly improve middle-mile and last-mile delivery. As an e-commerce platform, your first focus should be on how to keep customers happy. One of the best ways to ensure this is via faster delivery times which you can streamline with a first-mile process.

What to Know About First-mile Before Optimizing

There are several stages involved in first-mile delivery. The key to first-mile delivery optimization is automating the processes involved. With relevant emerging technology, numerous logistics processes have been optimized with relevant emerging technology, from transforming expenses to funds, tracking, routing, and many others. This guarantees a coherent performance to provide maximum operational efficiency in processes like last-mile truck loading and delivery timings.

Modern manufacturers are always looking for ways to improve delivery speeds. They collect information generated in several phases of inter-logistical operations in the first-mile. These outcomes may help them strategize lower goods costs and gain an edge in market competition. 

Before you research and trial for optimizing the first-mile, there are several things you need to keep in mind. Some of them have been shared below:-

Who is part of the process?

Generally, the first-mile process begins right after an order is placed by the customer. Upon receiving the order, it gets loaded onto a vehicle for transportation, delivering it to the end user. The first-mile process can also involve transportation to intermediary points like distribution centers and warehouses. A series of operations are involved between order placement and delivery involving several factors. 

An average order placed by a customer goes through almost 6 business entities like suppliers, manufacturing factories. It also has to go through 9 departments such as planning, distribution, and more. 

The key is establishing seamless communication through every entity which can be more challenging than last-mile. Communication problems can be detrimental to the supply chain process. It not only slows down processes, and completely shuts them down. Each entity depends on the other for smooth operations for maintaining an orderly, predictable and regularized schedule.

Map out your supply chain process

Mapping out your supply chain process is the best way to optimize it, starting with the first-mile. Thoroughly monitor every existing aspect of your supply chain to identify inefficiencies. This helps you to strategize and integrate steps required for improving said processes.   

Let’s look into a detailed example to help you understand. A warehouse team contacts your supplier for restocking because you are running low on stock. However, you run your operations manually and cannot fulfill time-critical orders. This manual process is the main cause of inefficiency. Not only is it time-consuming, but it also leaves ample room for human error. 

To streamline this process, you must consider integrating an automation system into your operations. Also, invest in time-saving technology to reduce manual work related to reordering inventory. This will also leave no room for human error since it is completely automated.

What tools are used?

The first-mile delivery is an umbrella term under which numerous logistics processes and operations are discussed related to the goods transportation from factories to fulfillment centers, warehouses, ports, etc. The first mile is the initial stage of the supply chain. Therefore, the meaning of first-mile delivery is associated with multifaceted services. It includes packaging, lifting and carrying, liftgate services, and others. 

Bookkeeping and data entry are still manually carried out despite having multiple technological solutions invented. Logistics is digitalized to make first-mile delivery easy, along with an edge over competitors to be more profitable. Therefore, most warehouses involved in first-mile delivery are upgraded with automated management systems. Since the first step in the first mile is preparing the order after receiving a customer request, automatic and direct communication amongst sales channels and warehouses is important. This is best fulfilled via a warehouse management system or a WMS. 

You can streamline management with the help of automation once an order is placed. Introduce systems like product-to-person picking, mini-load systems and the like to speed up operations. Automatic picking assistance tools are also implemented in various warehouses. Voice picking and devices used for put- and pick-to-light are highly useful.

A warehouse is constantly communicating with sales agencies and transportation agencies. This interaction process has also been digitized with the help of multi-carrier shipping software. It helps companies gain complete control over the shipping process wholly. It helps in easily printing labels compatible with major transportation agencies, allot tracking numbers to every package and performs various other functions.

First-Mile Delivery Best Practices to Optimize Your Supply Chain

Compared to last-mile delivery, first-mile delivery is not given as much attention. This is one of the biggest mistakes that e-commerce platforms often make. To streamline your supply chain processes, you should invest in resources to improve operational efficiency and visibility. As the first step in the delivery process, it carries a lot of significance. 

It is the first leg of the shipping process of an item. Therefore, to optimize the supply chain operations of a company, you need to consider optimizing first-mile delivery first. This will ensure you don’t lose customers due to poor standards and inconsistencies.

Optimizing the first-mile of your supply chain process comes with its own set of benefits. Not only will you have a better understanding of the operations at hand, but you will also be able to analyze the problems that need to be addressed automatically. This will help you uncover new opportunities to improve. With minimized complications in the first-mile, you are bound to obtain maximum customer satisfaction after the last mile. 

With improved warehouse systems related to picking and truck loading, your company will attain the efficiency needed for incorporating the best logistics systems. Below, we have listed practices for streamlining the first-mile delivery to help strengthen the supply chain.

Partner with a tech-enabled 3PL

While manually managing the logistics of your business might come off as a more reliable option, it can get quite challenging. It becomes more challenging when there is a surge in order volume. Managing overwhelming inventory volumes will require professional handler expertise and the space necessary for storing them. 

Partnering with a tech-enabled 3PL will help you manage all logistics processes related to fulfillment, warehousing, and shipment. A 3PL will help you determine the locations that fall under their logistics network. You can choose the one appropriate for inventory storage. You can deliver your inventory directly from the supplier to the fulfillment center. Logistics experts conduct an in-depth receiving check of inventory to ensure that the ordered items align with the paperwork. 

A tech-enabled 3PL is fully equipped with the necessary fulfillment network that optimizes a brand’s inventory allocation per the customer’s location. To complete first-mile delivery easily, the WRO system (used for receiving orders in the warehouse) will provide you with details for sending your inventory and ensuring they are accounted for and properly stored. 

Once the fulfillment center receives the inventory, you can track it in real time from the dashboard, where the inventory flow and order data are compiled in one place. This will help you pull any inventory record and schedule an appropriate time for automatically reordering inventory replenishment. 

Create a clear warehouse receiving process

Another great practice to develop in managing first-mile delivery is an in-depth warehouse receiving process. It is an important part of precise inventory tracking. This will help you create a blueprint for your warehouse team to follow every time inventory shipments come in from your supplier. The basic steps have been elucidated below:-

• Finish pre-receiving tasks: You must complete these tasks by determining the volume of every item that needs to be shipped. Also, consider the number of containers and packaging items required for each item. They can range from labeling, a number of packages loaded onto pallets, package weights and sizes etc.
• Receive and unload inventory: You need to meet with the shipper and unload the stock. Make sure you conduct a thorough inventory check against the paperwork received.
• Organize and store new stock: Make sure you store the inventory in an organized way for faster warehouse picking.

What processes are at work?

First-mile delivery is the initial transportation stage in any B2C supply chain logistics process. It starts when the parcel is shipped out by the merchant first. Merchants either ship or drop off their goods at receiving points. Postal services and couriers transport the goods to the customs office at a port or the airport. Throughout the first-mile delivery process, the operations that take place have been listed below:-

• Picking: This part is a mandatory part of order processing. The costs incurred in this stage usually exceed 60% of the total operating costs of a facility. The orders placed by customers have to be prepared and sent to the dispatch or consolidation area without delay and error. 

• Consolidation and packaging: Ensure not to invest too much time in consolidating and packaging orders during preparation. In this stage, the picked and checked units are first conditioned and then sent to the dispatch area. They go under different processes like printing the order documentation, labeling orders and others.

• Dispatch and loading onto the transportation for shipping: Once an order is prepared and packaged with all documentation, it is loaded onto a truck for transportation. These trucks leave the facility and are responsible for delivering the item at its promised time and in good condition.

• Transportation: The first mile delivery process might also include transportation operations between the production center and the central facility before the delivery of the order to the end customer.

Collect the right data

For seamlessly optimizing your first-mile delivery process, you need a proper warehouse system to collect necessary data. You must also provide a report on the important distribution metrics. You can adopt many ways to digest supply chain information and data. Some metrics for evaluating how well the first-mile delivery process performs have been explained below:-

• Time to ship: The number of days the supplier must ship your inventory after placing an order with them.
• Time to stock: The time needed to break down pallet loads and stock ready-to-ship inventory.
• Transit damage rate: The number of damaged products shipped by the supplier.

You can easily track a large percentage of these metrics with the help of a warehouse management system (WMS) or inventory management software. You can also simply outsource fulfillment to attain better visibility. 

Select the right packaging

Inventory is more likely to be damaged if it is not packaged properly before shipping.  Arrival of a damaged shipment can incur major losses, and it does not matter how fast your delivery is. To determine which supplier to contact for your business, you must first check the quality of their packaging. Some guidelines that most carriers follow for freight shipping are as follows:-

• Using adequate dunnage: Usage of sufficient dunnage for every box in the shipment helps prevent damage due to breakage.
• Using load protectors: Usage of load protectors fitted at the top and bottom of your shipments. It helps distribute the overall shipment weight evenly, especially when stacked on top. 
• Using edge/corner boards: Using edge or corner boards can help increase vertical stacking strength. This is important for preventing damage to the corner edges and stabilizing the load.
• Stretch wrapping: Usage of stretch wrapping helps prevent shifting of the load and stabilize it during transit.

Create a labeling system

Consistent and properly labelling your shipments is crucial in keeping track of your inventory. Wrong labeling of your products can lead to many problems when it comes to identifying available SKUs, reordering inventory when it runs low, etc. Once you partner with a 3PL, you might need to display the labels on your shipments in a particular way to streamline the receiving process.

Challenges Faced in First-Mile Delivery

Managing a steadily growing supply chain can be time-consuming and capital-intensive. Self-managed logistics can face many challenges regarding receiving inventory, preparing orders, delivering and keeping the stakeholders updated. Some of the top challenges faced in first-mile delivery are as follows:-

Poor focus on first-mile experience:

The significance of last-mile delivery in businesses has considerably increased over the years to provide customers with a good buying experience. This has led them to pay less attention to the first-mile services. It can be because it is not directly related to the end customers, and fewer stakeholders are involved. However, along with a great delivery experience, customers also demand end-to-end transparency in the delivery process.

First-mile operations should receive ample importance to optimize logistics costs. This will enable enterprises to adopt first-mile tracking practices and tools extensively to cut down on the costs incurred in the first-mile process. It provides the utmost transparency of delivery operations to the customers.

Inefficient labeling techniques: 

Labeling might be a little part of the first mile, but it is an inherently important part. Many businesses label packages manually. This can lead to situations where you can miss out on the necessary fields mentioned in packages. It, in turn, leads to inefficient dispatching and delayed delivery. To address this issue, integrate automating dispatching in your last-mile tracking platform.

Improper packaging:

Meeting out faster delivery time can lower the quality of packaging, leading to item damage during transit. Using a standard packaging material for every item can also cause material damage during the first-mile delivery itself. This can negatively impact the freight forwarding process as a whole. Incorporate high-tech delivery tools that enable businesses to carry out seamless material handling.

Lack of visibility:

One of the most common challenges in the first-mile process is the poor visibility of the operations. It can have an impact on the following freight forwarding processes like mid-mile and last mile. This can negatively affect the overall experience of the end customer. Inefficient handling, en route delays, and improper tracking of freight movement from the warehouse to a hub, are some results of poor visibility.

How Can I Improve My First-Mile Delivery?

There are two fundamentally different standards set for the starting line (First-mile) and the ending line (Last-mile) of the logistics process in the supply chain. In recent years, first-mile delivery has been given more attention by businesses worldwide.

Other than just shipping, businesses have shifted their interest in optimizing the first-mile services. Even though the first-mile enjoys more importance, reducing the delivery time to reduce costs has been a common, albeit a major factor. Some of the best ways to optimize first-mile delivery are as follows:-

1. Start by tracking everything: You can easily optimize first-mile delivery by tracking every single process involved in the company’s logistics chain. Keep track of everything, starting from sourcing the materials, transporting them to the manufacturer, delivering the finished goods to the shipping company, to the end-user finally receiving it.
   
   Knowing the shipment timings helps identify loops in delivery time that can potentially lead to major delays. As a solo operator, you can consider outsourcing to optimize this process. 

2. Log all the details: Data is an important resource that the whole supply chain industry greatly banks upon. More data leads to better visibility of the weak links in your business.
   
   You can log every necessary detail related to shipment size, pallet size, transportation, routes and stops, capacity, weather conditions, warehouse storage space, freight dimensions, etc. More information will help you better pinpoint the negative patterns that reoccur daily. This will help you mitigate them for improving and streamlining the supply chain process, thereby strengthening the promise of the first-mile warranty. 

3. Plan ahead: With all the necessary details compiled, you can plan and grow as a business. You can plan the routes, shipment sizes, efficient carriers, etc. You can easily optimize the smallest steps to reduce the overall cost while maintaining the consistency of the quality of delivery.

Locations

A streamlined delivery system is key to success in a business. The lack of an efficient delivery tracking system will cause a delay in improving its position in the market. E-commerce plays a major role in both global and local trade. Therefore, consumer goods need the fastest and optimized delivery route to customers and internally regarding B2B fulfillment. The first and last mile are integral to retailers during the distribution process of goods. Optimizing the delivery route is key to building an efficient supply chain. It helps meet coming-age challenges like two-day delivery expectations of customers.

New technology

Manually operating first-mile operations related to shipping can negatively impact the supply chain process, leading to a negative customer experience. It can also result in inefficient operational visibility and tracking, leading to extra costs incurred during shipment. Businesses that manually handle first mile management and delivery can meet several challenges. These thwart their efforts to grow in the market due to negative customer reviews.

The best way to ensure the first-mile warranty is to automate the processes. With the help of the right technology, you can easily transform the shipment costs into business funds that can be used for the company’s overall growth. 

Shipping analytics

Data is a valuable resource in transport management. It is key in shipping analytics that can help improve the optimization processes of shipment routes. Initially, route optimization was a labor-intensive process. It requires endless hours to analyze which route is best for every delivery. Data technology has significantly helped optimize the shipment route making it more accurate and significantly reducing delivery time. It has been deemed as one of the best first-mile solutions in the supply chain. 

Route and fleet managers can acquire data from various sources like active drivers, vehicles, sensors, trackers, real-time traffic updates, scanners, weather reports, and more. With faster web connectivity via the Internet of Things (IoT) and incorporating other technologies like AI and ML, analytics can help streamline the routes with optimum efficiency. The information and data gathered via one or more of the above given methods can help with the following:-

• Route planning and optimization
• Supply chain management
• Updating routes in real-time
• Delivering time-sensitive goods
• Scheduling
• Improving customer service

Autonomous and robotic delivery

One of the biggest challenges faced by the supply chain industry is labor scarcity. The problem remains from hiring forklift drivers for the first-mile to hiring truck drivers for the last-mile. Another important factor worth considering is that many manufacturing facilities are located remotely, away from large population centers to reduce costs. Having a smaller workforce population can have an adverse effect in this case.

Automated robotic delivery is a great way to help workers focus on higher-value production tasks. Using robots to move products throughout the production facility can potentially reduce transportation waste and optimize safety.  

AMRs (autonomous mobile robots) ranging from larger pallet-sized to small cart-sized vehicles can be incorporated within this agile framework. AMRs today can also act as traditional conveyors, carts or even replace forklifts. It doesn’t mean you will not need fixed automation, AGVs, forklifts and other material handling solutions. It potentially means manufacturers have more optimized and automated options to choose from.

Choose a 3PL or 4PL provider

Choosing a 3PL or a 4PL is key to finding the best-outsourced logistics provider. A 3PL (Third Party Logistics provider) is an outsourced fulfillment solution that provides, warehousing, pick, pack, and ship services. The best advantage of a 3PL provider is significantly reducing warehouse maintenance, scheduling and labor expenses. However, a 3PL is typically confined to a regional footprint and will not come in handy when businesses want to reach out to geographic markets. This will require you to engage multiple 3PL’s to acquire the required coverage of nationwide delivery. 

A Fourth Party Logistics provider (4PL) works with a network of numerous 3PLs connected via one technology platform. 4PLs, unlike 3PLs, are not confined to a geographic footprint. Their nationwide footprint enables them to carry out 1- to 2-day ground deliveries. Small and medium-sized merchants can easily offer same-day delivery promises by partnering with a 4PL.

A 4PL is more like a strategic partner that negotiates appropriate rates and SLA’s via a 3PL network. They use sales and shipping history to advise merchants regarding forwarding stock inventory. They even help in aggregating inventory and shipping volumes of numerous merchants to offer the best SLA’s and cut down on peak season surcharges.

Pick-ups and Drop-offs: What’s the Difference?

First-mile pick-up and drop-off are inherently different and are related to the mode of delivering a package to the end customer. Both are quite common in the supply chain, and choosing a method suited to your business needs is integral. The key points of differences have been explained in the table below:-

Pick-ups	Drop-offs
Pick-ups offered by logistics providers enable merchants to pick up their items from their storefronts or warehouses.	Drop-offs offered by logistics providers enable merchants to transport their items to collection points so LSPs can receive them. This is a common case for larger organizations with transportation vehicles or those who prefer not to pay for pick-ups.
This can potentially save merchants’ time and require less effort for delivery.	This can be a time-consuming and labor-intensive process.
There might be a fee required for pick-ups. If you want to avoid it, you can look for an LSP that provides it for free.	There is no fee involved in drop-offs.
This method is ideal for smaller companies.	This method is ideal for large-scale companies that have their fleet.

What Makes First-mile Delivery So Difficult?

There are numerous hurdles you will come across during first-mile management. Each of these problems can be challenging to handle, causing numerous problems and delays in delivery. Some challenges you can face during first-mile delivery are listed below:-

• Labeling: Every item prepared for transport, regardless of the mode, must be properly labeled to ensure perfect delivery and proper handling. Manual operations can lead to inefficient labeling, one of the most common challenges faced in the supply chain. 

• Handling shipment data: Accuracy of shipment data (weight, size, destination etc.) is crucial in first-mile delivery. Human error often led to improper data handling, causing inefficiencies in supply chain operations. 

• Packaging: Due to faster delivery, companies often overlook packaging. Lack of proper packaging has often led to items being damaged or lost during transit or while loading.

• Inventory: In the first-mile, one of the most significant challenges faced is proper inventory management. Manually managing inventory has left room for human error, leading to inaccurate supply lists that have led to delays in order fulfillment.

• Congestion: Inefficient scheduling in the first mile led to many hurdles during send-off that caused companies to incur extra costs and delays.

• Documentation: Certain shipments require licenses, permits, documents, and paperwork. Lack of proper documentation during the first-mile has caused costly delays because their goods have not been authorized at the national borders.

 

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