Trending Now: Last-Mile Delivery Expectations For 2023
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Bill Catania Forbes Councils Member
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Bill Catania is the CEO of OneRail .
The last mile in the delivery process is the most complicated, most expensive and most important step of all. Its significance intensified exponentially in 2020 with the boom in e-commerce sales and at-home deliveries. By the third quarter of 2022, U.S. e-commerce retail sales hit $250 billion, a 10% jump over Q3 2021.
As we step into 2023, the last mile will remain its importance going forward. The persistent and aggressive growth in e-commerce demands a seamless process to satisfy customers’ needs, but several challenges have made it more difficult.
Last-mile delivery accounts for 53% of the total cost of shipping , and ongoing inflation is making it even more expensive. The rise of e-commerce also introduced a need for third-party logistics firms (3PLs), which have filled delivery gaps, but have made fulfillment more complex for shippers. Unpredictable fuel prices and increased labor costs add to the pile.
Couriers and 3PLs need to walk a fine line to balance challenges and stay one step ahead of the constant changes in last-mile delivery. Let’s look at the trends we expect to see adopted by the industry to keep the last mile a top priority this year.
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Technology Enhancements
Clarity and transparency for shipping is what makes or breaks sales. Using the right technologies can help streamline employee tasks, keep customers engaged and help businesses stand out.
The use and growth of predictive analytics , which can influence future decision-making in last-mile delivery, will likely be a dominant trend. Not only do analytics allow shippers to gain clarity on current issues, they also help them anticipate future problems, mitigate risks and improve overall practices. Technology can work hand in hand with courier management capabilities to leverage the full fleet to address any issues that pop up and gain more visibility into delivery processes.
Real-time shipment tracking technology will be essential for speedy delivery to meet customer expectations. Ninety percent of customers want immediate updates and real-time visibility on their orders, and tracking technology lets them do that online or through an app.
The use of technology on the back end will be crucial to giving employees more time back in their day. That could look like an automated rate shopping system or a platform that manages delivery-order processing and dispatch to streamline the operational challenges of a diversified last-mile network.
Speedier, More Sustainable Deliveries
Consumers are expecting more from the companies they order from: 90% expect two- or three-day shipping to be standard and 32% of global shoppers will abandon their carts if an estimated shipping time was too long. Rising standards are forcing companies to step up their game this year.
To do so, shippers will need to examine and reevaluate their traditional distribution models. A trend to watch for is the use of a micro-fulfillment center (MCF) to strategically decrease those delivery times. MCFs are localized hubs for online order pickups, located in busy urban centers and filled with high-demand products. This gives shippers flexibility and allows them to act quicker to meet increasing consumer expectations.
As crucial as it is for deliveries to be speedy, they must also be done so sustainably. Seventy-seven percent of consumers are concerned about the environmental impacts of the items they buy, and 44% buy from brands with a clear commitment to sustainability. One way shippers can look to reduce their carbon footprint while also trying to deliver items as fast as possible is by leveraging route-optimization software.
Item Specialization And Delivery Productization
At-home delivery isn’t just for traditional retailers. One in six consumers orders groceries online and has them delivered to their home weekly. Grocery delivery requires extra considerations for the temperature of refrigerated goods and safety of fragile items like eggs. This year, we will likely see other specialized goods dip their toes in home delivery and will have their own unique needs depending on what the product is.
Another trend that has already begun, but will continue to rise, is the subscription market, which is expected to hit $196.35 billion this year and more than $900 billion by 2026 . Logistics companies need to be ready for unique needs that come with at-home deliveries or subscription boxes, especially if the items require special care or certain trucking temperatures during the last mile of delivery.
This industry specialization leads to delivery productization , another rising trend. With all the technology and consumer engagement around the process, delivery has become a product in its own right. Logistics companies should jump on this, if they haven’t already, by letting customers choose when and how they want to receive their shipments before pricing the services for it. It puts the customer in charge of their delivery journey, and gives shippers more control over pricing models and the ability to execute flawless fulfillment.
Staying on top of last mile trends is essential to long-term success. Businesses armed with forward-thinking approaches should be more likely to create customer engagement and employee efficiencies. The last mile is maturing, and the couriers, shippers and 3PLs need to be dynamic so they can take advantage of the trends that will define 2023—or they’ll risk being left behind.
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More From Forbes. 01:15pm EDT. 20 Tech Leaders Share Smart Steps To Take As A New CIO Or CTO. 12:30pm EDT. Why B2C Brands Should Leverage Predictive AI Alongside Generative AI. 10:15am EDT. The Role Of Robotics In Ensuring Workplace Safety And Productivity In Warehouses. 10:00am EDT. Will Generative AI Make Us Dumber? 09:45am EDT. The Future Of Data Security: Accessible And Free Data Activity Logs. 09:30am EDT. Why Outsourcing AI In The Energy Sector Is A Model That Only Works Halfway. 09:21am EDT. Netflix’s The Witcher: 3 Lessons Geralt Can Teach Us About Supply Chain Disruption. 09:15am EDT. The Duality Of AI In Cybersecurity: Risk Factor And Enabler. Edit Story. Forbes. Innovation. Bill Catania Forbes Councils Member. Forbes Technology Council COUNCIL POST Expertise from Forbes Councils members, operated under license. Opinions expressed are those of the author. | Membership (fee-based) 07:30am EST. |. Share to Facebook. Share to Twitter. Share to Linkedin. Bill Catania is the CEO of OneRail . The last mile in the delivery process is the most complicated, most expensive and most important step of all. Its significance intensified exponentially in 2020 with the boom in e-commerce sales and at-home deliveries. By the third quarter of 2022, U.S. e-commerce retail sales hit $250 billion, a 10% jump over Q3 2021. As we step into 2023, the last mile will remain its importance going forward. The persistent and aggressive growth in e-commerce demands a seamless process to satisfy customers’ needs, but several challenges have made it more difficult. Last-mile delivery accounts for 53% of the total cost of shipping , and ongoing inflation is making it even more expensive. The rise of e-commerce also introduced a need for third-party logistics firms (3PLs), which have filled delivery gaps, but have made fulfillment more complex for shippers. Unpredictable fuel prices and increased labor costs add to the pile. Couriers and 3PLs need to walk a fine line to balance challenges and stay one step ahead of the constant changes in last-mile delivery. Let’s look at the trends we expect to see adopted by the industry to keep the last mile a top priority this year. FORBES ADVISOR. Best Travel Insurance Companies. By Amy Danise Editor. Best Covid-19 Travel Insurance Plans. By Amy Danise Editor. Technology Enhancements. Clarity and transparency for shipping is what makes or breaks sales. Using the right technologies can help streamline employee tasks, keep customers engaged and help businesses stand out. The use and growth of predictive analytics , which can influence future decision-making in last-mile delivery, will likely be a dominant trend. Not only do analytics allow shippers to gain clarity on current issues, they also help them anticipate future problems, mitigate risks and improve overall practices. Technology can work hand in hand with courier management capabilities to leverage the full fleet to address any issues that pop up and gain more visibility into delivery processes. Real-time shipment tracking technology will be essential for speedy delivery to meet customer expectations. Ninety percent of customers want immediate updates and real-time visibility on their orders, and tracking technology lets them do that online or through an app. The use of technology on the back end will be crucial to giving employees more time back in their day. That could look like an automated rate shopping system or a platform that manages delivery-order processing and dispatch to streamline the operational challenges of a diversified last-mile network. Speedier, More Sustainable Deliveries. Consumers are expecting more from the companies they order from: 90% expect two- or three-day shipping to be standard and 32% of global shoppers will abandon their carts if an estimated shipping time was too long. Rising standards are forcing companies to step up their game this year. To do so, shippers will need to examine and reevaluate their traditional distribution models. A trend to watch for is the use of a micro-fulfillment center (MCF) to strategically decrease those delivery times. MCFs are localized hubs for online order pickups, located in busy urban centers and filled with high-demand products. This gives shippers flexibility and allows them to act quicker to meet increasing consumer expectations. As crucial as it is for deliveries to be speedy, they must also be done so sustainably. Seventy-seven percent of consumers are concerned about the environmental impacts of the items they buy, and 44% buy from brands with a clear commitment to sustainability. One way shippers can look to reduce their carbon footprint while also trying to deliver items as fast as possible is by leveraging route-optimization software. Item Specialization And Delivery Productization. At-home delivery isn’t just for traditional retailers. One in six consumers orders groceries online and has them delivered to their home weekly. Grocery delivery requires extra considerations for the temperature of refrigerated goods and safety of fragile items like eggs. This year, we will likely see other specialized goods dip their toes in home delivery and will have their own unique needs depending on what the product is. Another trend that has already begun, but will continue to rise, is the subscription market, which is expected to hit $196.35 billion this year and more than $900 billion by 2026 . Logistics companies need to be ready for unique needs that come with at-home deliveries or subscription boxes, especially if the items require special care or certain trucking temperatures during the last mile of delivery. This industry specialization leads to delivery productization , another rising trend. With all the technology and consumer engagement around the process, delivery has become a product in its own right. Logistics companies should jump on this, if they haven’t already, by letting customers choose when and how they want to receive their shipments before pricing the services for it. It puts the customer in charge of their delivery journey, and gives shippers more control over pricing models and the ability to execute flawless fulfillment. Staying on top of last mile trends is essential to long-term success. Businesses armed with forward-thinking approaches should be more likely to create customer engagement and employee efficiencies. The last mile is maturing, and the couriers, shippers and 3PLs need to be dynamic so they can take advantage of the trends that will define 2023—or they’ll risk being left behind. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify? Follow me on. LinkedIn. Check out. website. Bill Catania. Editorial Standards. Print. Reprints & Permissions.