Failing in the Last Mile? The Problem May Be in the Middle Mile

The last mile of delivery has become such an important part of an e-commerce customer's journey that many shippers and retailers forget about a key part of that journey: the middle mile.

Visibility – of shipments and assets – in the middle mile provides the connectivity that makes tracking in the final mile possible and ensures a happy customer.

"When one player hands off to another, there is often a lack of visibility there … so it isn't only the consumer sitting at home waiting for a box of shoes," Deepak Patnaik, global head of product marketing for transport and logistics at Here Technologies, told Modern Shipper.

Here, which provides location data and related technologies, recently released a report conducted in partnership with Atos, a digital technology company, that focused on the last mile. Among the findings were that 58% of consumers want same-day delivery and 43% have suffered a lost delivery. Similar to other studies on the subject, 57% said they would shop elsewhere if they are not satisfied with their delivery.

Patnaik noted that as important as the last mile is – the report certainly backs up that claim – the inability of many shippers to properly control their middle mile leads to the failures in the last mile. More visibility, he said, is needed in the warehouse to not only track shipments but also assets that enable the goods to move through logistics networks in a timely and efficient manner.

"Operationally, what does that mean?" he asked. "There is visibility in the last mile on the vehicle that brings the good to your house. [But is] their visibility in the warehouse?"

Many warehouses are bogged down with lost assets, or assets that are late to arrive, such as a forklift in the wrong part of the warehouse. That delay means a truck might sit waiting to be loaded or unloaded, slowing down the process and potentially slowing the final delivery.

"That's where location intelligence plays a very strong role in elevating those concerns to get the managers the visibility they need when they need it," Patnaik said, noting that 20% of the typical supply chain budget is spent on replacing assets to handle materials. Between 10% and 30% of supply chain assets disappear from warehouses annually, he added.

"To really optimize the last mile, the work needs to be done in the middle mile. That's where the warehouses are. That's where the distribution centers are," Patnaik said. "The middle mile is becoming a chokepoint," leading to shippers having to increase the size of sorting centers to accommodate inefficiency.

Patnaik said that while sellers have less control over the final mile, which is often outsourced to third-party delivery firms, the middle mile is something they can control.

"You want to be able to track things to the door of the factory, but that is not good enough. … You want to be able to track it through the warehouse," he said. "In such gigantic spaces, it becomes very important that you have seamless tracking of all your assets and in real-time."

Patnaik said sellers should work to get their third-party logistics providers onboard with visibility solutions. Doing so, he said, will aid in tracking items at the warehouse level, which will ultimately speed final delivery and likely lower costs as well.

"You also want to be able to optimize the routes of those vehicles … from warehouse to warehouse, from DC to DC, with transparent, real-time ETAs showing up across the board," he said. "That is one added step in increasing efficiency across the board in the middle mile."

The hardest part is getting technology into warehouses.

"The vast majority of warehouses are still run manually and have no digitization, so it's a question of getting them, metaphorically, out of the dark ages," Patnaik noted.

Click for more articles by Brian Straight.

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