Last Mile Delivery Meaning: Key Tactics for Delighting Customers

Meeting today's customer expectations is tough and expensive; staying competitive means improving efficiency and customer satisfaction while also controlling costs. This is especially true for last mile delivery, which is the final step of getting products to customers. Companies that get better at this part of delivery will have an edge.

The first step is to understand the last mile delivery definition. But that's only the first step, so we'll also dive into last mile shipping to look at the challenges facing delivery companies. And we’ll show you how technology—especially last mile software—can help solve these challenges. 

Last Mile Delivery Definition: What Does It Mean?

Last mile delivery refers to the final stage of the delivery process, moving a product from a transportation hub to its final destination: a home, business, construction site or retail store.

The last mile of the supply chain is often the most crucial step—and the most costly. Optimizing this part of the journey benefits producers, distributors, sellers, and customers by cutting unnecessary time and expense.

A typical last miles delivery process looks like this:

1. Order received – A customer places an order, and your supply chain activates.
2. Transportation hub – The order waits at a warehouse or delivery hub before the last mile service goes into action.
3. Driver assignments – Orders are organized into routes. Some orders need trucks with special capabilities—refrigerated and dry compartments, lift gates—so the routes have to be assigned to the right service units and drivers.
4. Scanning and loading – Items are scanned and loaded onto vehicles. Both shippers and customers should be able to begin tracking the delivery at this point, helping ensure the packages don't go astray in transit. 
5. Delivery to recipient – Drivers complete the last mile delivery by bringing orders to customers and collecting proof of delivery. The POD should be electronic (ePOD) and uploaded to the centralized delivery management system. 

Understanding Last Mile Challenges

Based on this last mile delivery definition, it's clear why customer satisfaction depends on a smooth last-mile deliveries process—and why it's challenging and costly. The problem is that while customers want faster and cheaper shipping, the last mile delivery is inherently inefficient.

About 53 percent of a shipment's total cost comes from last mile shipping. Companies typically absorb around 25 percent of these costs because customers don't want to pay high shipping fees. As supply chain challenges mount up, this percentage increases. By improving your last mile delivery operation, you can save money without sacrificing the speed and reliability customers demand.

Technology Solutions for Last Mile Delivery Challenges

Making sure that, for each customer, the last mile delivery is on time is key to creating a great customer experience. But how?

First, use effective last mile logistics software. Modern last mile software solutions have robust features including route planning, real-time tracking, automated and manual two-way customer communication tools, and logistics performance metrics. With the right technology, these processes can be automated so you can focus on customers while the software handles the details.

Cutting edge last mile software solutions can help improve your delivery process in several ways:

Route Planning and Optimization

In urban areas, traffic makes deliveries time-consuming even when the delivery locations are close together. In rural areas, drivers spend lots of time and fuel delivering just a few items. This is just one of the reasons why making last-mile deliveries efficient is hard. Route optimization is the best way to address this complexity.

The best last mile solutions calculate routes based on more than just distance between stops. It includes location, service time, driver skills and efficiency, vehicle capabilities and capacity, and traffic history to find the most efficient paths. Drivers receive their routes through a mobile app and provide status updates that generate live ETAs.

Automated routing and dispatching speeds up the delivery process by eliminating manual work. This lets managers use resources more efficiently and focus on other important tasks. Automating last mile logistics simplifies the process and reduces the costs that make last mile shipping expensive.

Reporting and KPI Tracking

Reporting can identify problems and help you find efficiencies you otherwise might not see. Advanced last mile solutions should track key metrics like on-time rates, success rates, service times, distance traveled, and customer feedback.

Tracking these KPIs helps you see how time is spent in your last mile delivery chain and pinpoint your exact cost per route, per case or per delivery. Your software should integrate with other systems to ensure you always have accurate and up-to-date data for decision-making.

Electronic Proof of Delivery (ePOD)

Proof of delivery is documented evidence that an order was delivered, such as a signature and photo of the delivered order with a date and time stamp.

With the right last mile software solutions, proof of delivery is easy to collect. A mobile app that supports photos, signatures, barcodes, and notes allows drivers to capture delivery proof, giving you a complete record and reducing false claims.

Enhanced Customer Service

The best last mile software not only lets customers track orders but also enables real-time communication and frequent status updates. This visibility reduces stress on delivery day and makes it more likely that customers will be home to receive their orders so you have fewer failed delivery attempts. And fewer failed deliveries means lower fuel and labor costs. 

To provide truly exceptional service, you need to deliver at the right time consistently, which means generating accurate ETAs. Last mile software solutions that incorporate AI and machine learning into their core routing functions do this best, and some are able to achieve 98% accuracy. 

Overcoming Last Mile Challenges

Customer expectations are increasing, and the challenges in last mile delivery are growing with them. Some common last mile challenges include:

• Meeting tight delivery windows
• Managing high delivery costs
• Handling increased package volumes
• Navigating urban congestion
• Serving rural areas efficiently
• Maintaining visibility throughout the process

But with the right last mile software solutions, you can overcome these last mile delivery challenges and meet customer demands for fast, reliable deliveries while also meeting your business goals. Best-in-class technology helps you provide better service while keeping costs under control—a win for your business and your customers.