New Delhi: A product’s journey typically starts from the warehouse shelf and ends at the doorstep of the final customer. This is the last step in the delivery process where the product ultimately reaches the customer also known as the ‘last mile‘ of delivery.
Driven by the current growth trends in the Indian three-wheeler market which is projected to grow to Rs. 14,000 crores in FY23, exhibiting a CAGR of more than 15%. Baxy Mobility, a Gurugram-based company, engaged in the manufacturing and marketing of 3W, tippers for passenger and cargo segments in Diesel, CNG & EV variants, outlines the importance of 3W’s with key concerns inherent in last-mile logistics and its impact on the rural workforce. Mr. Naveeth Menon, Vice President-Market Operations, BAXY Mobility shares an expert perspective. The company is also renowned for its Diesel Mechanical Engines (MTEC Engines) since 2009.
In this entire last-mile process, no doubt customer satisfaction remains the key. However, in the process to achieve customer satisfaction, last-mile delivery is the most expensive and exhausting part of the logistics journey. As a share of the total cost of shipping, last-mile delivery costs are significant – comprising 28% overall. Online shopping is experiencing a huge surge, with speedy deliveries to delight its customers. This scenario has created an enormous expectation of last-mile delivery with companies implementing new technologies, and trying out new supply chain models mainly to accelerate deliveries, and focus on process improvements.
Reaching ‘the last mile‘ is a crucial concern in India, but its complexity is not overlooked anymore. Today, innovative strategies are being developed to tap the rural workforce through new partnerships.
In order to ensure the dual aim of larger corporate involvement and social empowerment, it is vital that the last mile conundrum be cracked. More importantly, the aim is to achieve rural employability and empowerment as the main drivers. The ‘investment‘ in building the capacity of the last mile and rural workforce helps in creating a much more aligned and sustained supply chain, with equitable distribution of value leading to larger success in the long run. Every player must make a strong attempt to move towards the “balanced middle” for this value chain to align and deliver with absolute effectiveness.
Providing a great experience with last mile logistics and yet remaining profitable is a great challenge for companies. Urban delivery is becoming difficult due to a rapid increase in parcels, cost, and efficiency issues of logistics companies. Customer is keen to know the precise location of their product and the expected delivery time. Therefore, visibility is the most substantial requirement to develop reliability. A balance needs to be created to cater to the customer requirements and a sustainable concept should be developed to cope with the urban last-mile delivery. Online delivery is growing at a fast pace – and it’s expected to maintain an upward growth trend with an estimated compound annual growth rate of 29% from 2020 to 2024. Retailers are increasingly understanding last-mile delivery to win customer loyalty and face tough competition.
Today, most companies are understanding that the first strategy is to basically work on the costs by subsidizing last-mile delivery. Acquiring new customers is the most pivotal factor for any company. Hence, they are investing more efforts to get the last-mile delivery right, by trying to meet fast delivery expectations and potentially nurturing customer loyalty.
With the right software and third-party logistics (3PL) partners, grocers and retailers can abandon the third-party delivery platforms and instead own the end-to-end process themselves – while capturing valuable data and cutting costs. The commercial 3Ws, offer better rates, improved customer services, and with new age technology it is easier to draw the attention of consumers. When you own the last mile, everything about the end delivery process gets smarter. You can improve efficiency and channel optimization in a better way. You can also forecast the marketing decisions you need to deal with the competition. With the help of artificial intelligence and machine learning, last-mile data can be fed into targeted promotions and cross-selling campaigns. You can capture real-time intelligence and conduct predictive modeling. By better harnessing the data collected you can leverage it to create a truly seamless process. You can build back customer loyalty and considerably reduce the chance your valued customers will switch to a competitor.
No doubt, owning your own last mile can be more challenging in the short run, however, in a futuristic mindset, many retailers will find this as the only sustainable route.
As companies continue to explore different delivery options – including delivering from local inventory, micro-fulfillment centers, and locker pickups – this space will continue to evolve quickly in the next few years with undeniable benefits.