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January 20, 2025Prioritizing efficient and reliable ‘last-mile delivery’ is crucial for businesses to offer a seamless and satisfying online shopping experience to consumers.
The ‘last mile delivery’ stage is the final leg of a product journey from a distribution center to the customer’s doorstep.
This stage is crucial because it directly impacts customer satisfaction and delivery experience. However, this stage also comes with its own set of challenges, such as high shipping costs, delayed or failed deliveries, package theft, disputes over proof of delivery, and more. These issues plague this crucial stage and affect business profitability and customer loyalty.
Fortunately, the blockchain supply chain development can effectively mitigate last-mile delivery woes. How? Let’s find out the answer in this blog, highlighting the key challenges last-mile delivery faces and how blockchain logistic solutions can resolve them.
Why Last-Mile Delivery Efficiency Matters in Today’s Logistics Landscape
The following are the reasons why last-mile delivery efficiency matters more than ever:
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Customer Expectations
Nowadays, consumers demand fast, reliable same-day and even on-demand deliveries. An efficient last-mile delivery system helps meet such consumer’s expectations, leaving them satisfied.
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Competitive Advantage
In a fiercely competitive market, companies that differentiate themselves through superior last-mile delivery, characterized by speed, reliability, transparency, and personalized options, gain a significant edge.
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Enhanced Brand Credibility
In the e-commerce space, the customer only has a physical interaction with a brand when they get the product delivered to their doorstep. The smooth, timely, and professional delivery leaves a lasting brand impression while a poor experience can tarnish its image.
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Reduces Operational Costs
Inefficiencies in last-mile delivery, such as failed attempts or excessive fuel consumption, increase the operation costs. An efficient last-mile delivery optimizes delivery routes and focuses on using advanced technologies to mitigate these expenses.
Why Ignoring Last-Mile Delivery Could Be Fatal?
The last-mile delivery market is growing at a rapid rate with the surge in online orders.
“The Statista report clearly shows that this market is projected to reach over $200 billion by 2027, more than double that of $108.1 billion in 2020. “
This growth highlights the prominent role of last-mile delivery in logistics.
Ignoring last-mile delivery’s importance could result in
- Customer dissatisfaction
- Lost brand loyalty
- Revenue loss
- Increased operational costs
- Damaged reputation
- Missed opportunities
The following statistics on last-mile efficiency highlight its importance in a competitive market-
“A study by Capgemini found that 55% of consumers will switch to a competing brand or a retailer if it offers a faster delivery service”
A survey by Convey, conducted with over 1,500 shoppers, reveals that
“98% of respondents believe shipping impacts brand loyalty, whereas 84% report they are unlikely to return after just one negative experience—marking a 34% increase since 2017.”
This shows that the last-mile delivery stage is no longer just an operational detail—it’s a significant touchpoint for customer engagement.
Navigating The Complexities Of Last-Mile Delivery
According to a report by SOTI Inc., more than 61% of logistics companies agree that last-mile delivery is the most inefficient process in the entire supply chain.
Why is it so?
Let’s review the most significant challenges affecting the last-mile delivery system in logistics-
Key Challenges
Last-mile delivery presents a series of challenges that logistics companies must navigate:
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Unpredictable Traffic and Route Planning
Navigating congested urban areas and unpredictable traffic patterns often leads to delays, missed deadlines, and increased operational costs.
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Inaccurate or Insufficient Address Data
Incorrect addresses or lack of clarity in delivery instructions can lead to failed deliveries, additional labor costs, and customer frustration.
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Lack of Visibility
Customers want real-time tracking updates, but logistics companies often struggle to provide accurate, up-to-date information on delivery status, which leads to frustration.
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Customer Availability
Customers may not be available to receive the delivery. It requires rescheduling, which not only delays the service but also increases the overall delivery cost.
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High Costs
With the increasing demand for faster deliveries, companies must manage rising transportation and labor costs, which further impact business profitability.
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Returns Management
The high volume of returns adds complexity to logistics operations. A simplified returns process is essential for customer satisfaction.
All of these factors combine to create a complex, dynamic environment in last-mile delivery that demands innovative solutions.
Blockchain in Logistics: Tackling Last-Mile Delivery Challenges Effectively
Blockchain technology, which started as a financial technology, has spread its roots into the logistics sector.
The essence of blockchain lies in its distributed ledger that diminishes a central control mechanism to safeguard against any failure occurring in the central system. It acts as a unifying platform that records transactions across multiple nodes.
The implementation of blockchain in logistics domain cultivates a system, built on the pillars of trust, transparency, security, and traceability. Businesses worldwide are leveraging blockchain logistic solutions to address last-mile delivery system inefficiencies.
Let’s dive into how blockchain in logistics will prove to be profitable for businesses in several terms.
How Blockchain Enhances Last-Mile Delivery Efficiency
1. Transparent and Traceable Deliveries
Blockchain in logistics records transactions and movement within the delivery chain immutably on a distributed, decentralized ledger. It allows stakeholders to monitor shipments in real time. Key benefits include-
- Ease of Tracking: Customers can access precise information about their package’s location and businesses, while businesses, in turn, can leverage this information to enhance the overall delivery experience and ensure faster delivery.
- Proof of Delivery: Blockchain timestamps and records delivery confirmations. Hence, there will be no disputes related to lost or delayed shipments.
- Fraud Prevention: The secure nature of blockchain reduces the risk of package tampering and ensures data authenticity.
2. Smart Contracts for Automation
Smart contracts on blockchain logistic solutions automate certain aspects of the delivery process. For instance, the payment is only released in case of a successful delivery. Some other use cases include-
- Dynamic Pricing: Smart contracts on blockchain logistic solutions ensure fair pricing as they can automatically calculate delivery costs based on factors like distance, urgency, and demand.
- Automated Payments: Payments to couriers or third-party providers can be completed upon successful delivery. This reduces administrative overheads and accelerates payment cycles.
- Route Optimization: Smart contracts integrate with IoT devices to analyze traffic and weather conditions and suggest optimal delivery routes that can reduce delivery costs and offer faster delivery.
3. Enhanced Security and Data Integrity
Security is paramount in logistics, particularly in last-mile delivery, where sensitive customer information and high-value products are at stake. Blockchain addresses this through:
- Tamper-Proof Records: As blockchain logistic solutions operate on cryptographic principles, altering the data is nearly impossible once it has been recorded. The consumer’s personal and financial information along with the business’s records of shipments, payments, and transactions are completely secure.
- Identity Verification: Blockchain in logistics helps verify the identities of couriers and recipients to prevent fraudulent claims.
4. Efficient Collaboration Among Stakeholders
Blockchain in logistics’ last-mile delivery creates a unified platform for all parties involved in last-mile delivery. This collaboration reduces errors, improves accountability, and ensures timely deliveries. Stakeholders, including
- Retailers: Gain visibility into delivery performance and customer satisfaction metrics.
- Couriers: Access accurate delivery instructions and receive timely payments.
- Customers: Benefit from transparent communication and real-time updates.
5. Addressing Sustainability Concerns
Sustainability is a growing concern in logistics. Blockchain contributes to greener last-mile deliveries by:
- Route Optimization: Blockchain in logistics enables route optimization which minimizes fuel consumption and lowers the environmental impact.
- Tracking Carbon Footprints: Blockchain logistic solutions record emissions data for each delivery, that allow companies to adopt eco-friendly practices.
- Appealing to Eco-Conscious Consumers: For environmentally-conscious consumers, sustainability in deliveries is a key selling point, and blockchain logistics solutions support this effectively.
Conclusion
An efficient last-mile delivery system has become important and influential for the smooth-running supply chain. However, this significant stage often faces numerous challenges that demand a reliable solution, and blockchain supply chain development offers just that. The transformative technology of blockchain enhances transparency, automates processes, encourages faster deliveries, promotes sustainability, and offers more benefits that can improve the last-mile delivery experience. In order to leverage the power of blockchain in logistics’ last-mile delivery, technical expert assistance is required and in such a case, Antier is the name you can trust.
Antier, an innovative blockchain development company, brings years of expertise in creating innovative, customized blockchain solutions tailored to meet the unique needs of logistics and supply chain industries. Backed by talented and experienced 700+ blockchain engineers, Antier empowers businesses with expert-built blockchain logistic solutions that promote transparency, security, and efficiency in the last-mile delivery system.
If you are seeking technical assistance for blockchain supply chain development to gain a competitive edge over your peers through an efficient last-mile delivery system, contact us today!