The first mile/last mile (FMLM) is an important issue for logistic companies. The term FMLM is used to describe the movement of goods from a transportation hub to its final destination.
Transporting goods via a freight network system is the most convenient way to get the items to their destination. However, the biggest problem for supply chain operators is during the “last mile” of the delivery (ergo, the term FMLM). According to a study by the Institute for Public Administration at the University of Delaware the FMLM problem is estimated to cost approximately 28% of the total price of the products being delivered to end users. Delivering to customers located in areas that have underdeveloped roads or that are located in congested areas, in conjunction with the risk of the delivery not being received, make the last mile the most expensive. Yet with the increasing development of technology, commercial companies are coming up with solutions that will reduce the issues around FMLM.
E-commerce pushing for a solution for last-mile deliveries
E-commerce has revolutionized the retail industry across the globe. Currently it is estimated that 96% of Americans shop online, and this has put enormous pressure on companies to deliver their goods as quickly and efficiently as possible. To add pressure, a common marketing tool used by many e-commerce companies is to offer same day delivery using loT-related platforms. LoT-related platforms are software that connects edge hardware, access points, and data networks to other parts of the value chain (which are generally the end-user applications). Logistics companies like UPS and FedEx that rely heavily on their fleet to deliver goods, are using IoT-related platforms to improve their services.
Solutions for the FMLM problem
Due to the increasing e-commerce marketplace which includes customers from all over the world, the supply chain and delivery operations of fleet businesses has become saturated. Delivering bulky items via trucks to several customers at once has proven to be quite a challenge for companies like XPO Logistics.
“Consumers are increasingly buying heavy goods sight unseen,” says the President of XPO Logistics Charlie Hitt. “A large part of that is e-commerce, but there’s also more omni-channel activity that doesn’t happen online. For example, a consumer might research a refrigerator online, and then telephone a mall store and order the brand and model for delivery. Many retailers prefer to outsource omni-channel deliveries rather than carry the costs of fleets and drivers.”
Solutions providers such as XPO use the IoT to allow delivery companies and customers to stay informed and in control of the delivery experience.
For instance, XPO is using software that allows companies to calculate the cost and profitability of their deliveries. Managers can use the software to inform their customers on the exact time needed to deliver specific items. The software is usually set up as a transparent tool, which end users can check to ascertain whether they are being overcharged for freight costs. In addition, the software can be used by customers to check if a delivery has been delayed due to bad weather, traffic or a road accident.
Government help for streamlining FMLM operations
Incidentally, the U.S. government has mandated the use of IoT technology in trucks and this is having a huge impact on the cost-effectiveness of the logistics industry. The Federal Motor Carrier Safety Administration (FMCSA) brought in the ELD Mandate last year to ensure that every truck’s journey is digitally recorded. While the ELDs were put in place to monitor whether drivers were exceeding the legal hours allowed on the road, these devices have also allowed companies to streamline their delivery routes. The IoT-compliant devices allow fleet managers to monitor their drivers in real time, which in turn can make operations faster. Verizon Connect states that ELDs allow fleet operators to closely monitor every aspect of the truck’s journey, thereby allowing them to adjust routes to save more gas, time, and money. With IoT devices, fleet managers can improve their operations by quickly changing their delivery routes as well as time of delivery.
It isn’t easy to solve the FMLM issue. The current technology can only do so much to streamline operations. However, with more research and tests, logistics companies will find more efficient ways to deliver items to end users. As previously mentioned in an article by First Call Trucking, a great logistics provider believes in finding the answers. For example, drone deliveries were merely part of science fiction films 10 years ago, but they are now being utilized for small-package deliveries. Soon, a better solution for FMLM that involves large-items will be developed along with the progression of technology.
For your shipping needs, First Call Trucking specializes in first and last leg delivery services. Email us today for a free quote: email@example.com.