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Jaidyn Farar

10 Easy and Effective Last-Mile Optimization Strategies

by Jaidyn Farar

Last-mile delivery—the final stage of a package’s journey from business to consumer—is an important part of today’s ecommerce supply chain

Demand for last-mile delivery has never been greater, and it’s expected to grow in the near future. One World Economic Forum report states that between 2020 and 2030, last-mile delivery is expected to grow by 78%, flooding the world’s largest cities with 36% more delivery vehicles. 

The consequences? Carbon emissions from last-mile delivery will increase by nearly one-third, and traffic congestion will increase by over 21%. Optimizing the last mile reduces these effects, keeping the air clean and roads clear. It also reduces costs for your business and allows you to ship products faster. 

Though you may believe that carriers are responsible for optimizing last-mile delivery, your business’s role is just as important. Let’s review what last-mile delivery is and how you can take action to optimize your last-mile strategy.

Last-mile delivery: Challenges and opportunities

Last-mile delivery is the stage of order fulfillment where a package is transported from the distribution center to its final destination—usually a consumer’s home. Most businesses partner with shipping carriers like USPS, UPS, and FedEx to complete last-mile delivery, while some operate their own delivery fleets.

The last mile has a major impact on the customer experience, as the effectiveness of last-mile logistics affects delivery speed, package safety, and even the likelihood of packages getting stolen from doorsteps

Unfortunately, last-mile delivery poses several challenges. In rural areas, long travel distances can make it difficult to deliver packages on time. In cities, traffic congestion often causes delays, and having delivery vehicles on the road increases air pollution. In all areas, there’s a risk of incorrect addresses and poor package visibility. 

The last-mile optimization strategies in this article will help you face and overcome these challenges—and keep customers happy—as you work with carriers and other logistics partners to ensure the last mile is smooth and streamlined.

9 last-mile optimization strategies

Have you ever wondered how to improve your last-mile delivery performance? The key is last-mile optimization, which aims to minimize delivery times, costs, and environmental impact while maximizing customer satisfaction. 

1. Automate your distribution centers

Most people think the last-mile delivery process starts when carriers pick up packages. In reality, the last mile begins much earlier. It all starts in your distribution centers, where every stage of order fulfillment—from inventory management to picking and packing—influences the speed with which orders reach customers. 

By eliminating bottlenecks in your facilities, you’ll make last-mile delivery more efficient. One way to do that is to incorporate automation in your warehouse to standardize decision-making.

Nicholas Daniel-Richards, CEO at Packiyo, says, “Very rarely are you dealing with logistics-educated PhDs [in] the warehouse. It's just people running around trying to follow processes and procedures.”

He goes on, “I'm a big believer in right-time decisioning. You don't want to make decisions on how an order should be packaged and fulfilled and shipped at the time that you're trying to process the order. That’s a repetitive thing—the factors that affect that should be automated.”

2. Incorporate technology into your fulfillment process

As mentioned above, the last-mile delivery process starts in your distribution centers. To keep every element of your operations running smoothly, you need the right technology. The following systems are invaluable elements of an in-house fulfillment strategy. Let’s take a look at how they help with last-mile shipping. 

  • Order management system (OMS). An OMS gathers order information from every channel into a single view. This ensures accurate order capture, tracking, and fulfillment, which minimizes errors and delays in last-mile delivery.
  • Inventory management system. By maintaining real-time visibility into stock levels and locations, an inventory management system helps prevent stockouts. When products are available when customers want them, you’re able to ship them promptly. 
  • Warehouse management system (WMS). A WMS optimizes warehouse operations, including picking, packing, and shipping. With fast, accurate order picking and packing, last-mile delivery will be more efficient and you’ll reduce the chance of returns. 
  • Shipping software. Shipping software like EasyPost automates the shipping process. It  allows for strategic carrier selection, label generation, and tracking, all of which contribute to faster and more reliable last-mile delivery.

3. Choose the best last-mile carriers

Carriers are responsible for many aspects of last-mile delivery: coordinating and optimizing routes, hiring drivers, maintaining vehicles, and more. But you’re responsible for choosing carriers, and your decision influences the effectiveness of your last-mile delivery experience. 

As you choose carriers, consider the following factors:

  • Service levels
  • Reliability
  • Delivery speed 
  • Cost structure
  • Tracking and visibility
  • Sustainability efforts
  • Geographic coverage
  • Additional services offered

For the most cost-effective last-mile delivery, use a multi-carrier strategy. Diversifying your carrier mix will allow your business to take advantage of the best rates and stay agile if one carrier faces disruptions. 

Shipping platforms make a multi-carrier strategy simple, allowing you to integrate with an extensive library of carriers, access discounted rates (or your own negotiated rates), find the best delivery times, track packages, and more. 

4. Provide real-time package tracking 

Most customers value package tracking, often checking tracking updates multiple times a day. Make package tracking as easy as possible for them by providing an easy-to-use tracking portal. You can also send email or SMS tracking updates. 

As part of the tracking process, make sure to give customers an estimated time of delivery (ETA); don’t just tell them how many days their delivery will take. 

If your shipments face a delay caused by something outside your control, such as bad weather, communicate proactively with customers. Let them know what’s going on and when they can expect their package to arrive. 

In addition to communicating with customers, give them a way to contact you in case of delivery issues. Provide prompt, personalized responses to help resolve issues efficiently and maintain customer loyalty.

5. Analyze shipping data

Your business probably has access to all the shipping data you need. As customers place orders and your team fulfills them, data constantly streams in from your WMS, OMS, inventory management system, ERP, shipping platform, and other technology. But because this information is all housed in different locations and formats, you may struggle to understand or use it. 

To improve your last-mile strategy, collect and analyze shipping data, then make operational changes to address any issues you uncover. An analytics platform like EasyPost Analytics can reveal insights about the following: 

  • On-time delivery rates based on where packages are shipped 
  • The root causes of long shipping times 
  • Performance of individual carriers
  • Package characteristics, including cost-related factors

In addition to analyzing your data, get feedback from customers to learn about their individual delivery experiences. This will provide qualitative insights into what you should improve. 

6. Use drones and autonomous vehicles (AVs)

Most of the challenges of last-mile delivery are caused by delivery vehicles. Navigating roads that are often already congested, these vehicles contribute to traffic problems and carbon emissions. 

Drones and autonomous vehicles allow you to skip traffic, delivering products in a faster and more sustainable way. While these technologies may seem futuristic, businesses like Walmart have already begun to use them for deliveries. 

Do they really make a difference? Research says yes. One 2023 study compares drone deliveries to traditional truck deliveries. The drone deliveries had the following effects:

  • Carbon emissions reduced by nearly 25%
  • Total cost reduced by 22.13%
  • Delivery time shortened by 20.65%

7. Offer alternative pickup locations

Consider giving customers the option to have packages delivered to a secure pickup location rather than their home. Alternative pickup locations such as lockers, retail stores, or designated pickup points allow customers to collect their orders at their convenience. This not only provides a better customer experience but also reduces failed deliveries and the associated costs.

8. Protect shipments with the right packaging 

If a fragile or expensive product is damaged during last-mile delivery, customers will request a refund or replacement. This puts financial strain on your business and sours the customer experience.

To avoid this, invest in smart packaging solutions such as size optimization, sturdy materials, and packaging designs that are compatible with carriers’ automated sorting systems. In addition to minimizing the risk of damaged goods, these solutions can also reduce shipping costs. 

Want to go the extra mile? Make your packaging sustainable by using recyclable or biodegradable materials. This will show consumers that you take your environmental responsibility seriously. 

9. Minimize carbon emissions 

Above, we talked about the benefits of using sustainable packaging, but that’s not the only way to make your last-mile operations more environmentally friendly. Another easy way to go green is to use carbon offsetting programs.

For example, EasyPost’s carbon offsetting program automatically tracks the CO2 emissions associated with each package, then purchases environmental projects to offset those emissions. It’s free to every business that uses the EasyPost Shipping API.

Of course, you should remember that offsetting carbon is an important first step in making your last-mile shipping more sustainable, but it’s not the only step. As you offset carbon emissions, whether through EasyPost or another provider, continue implementing other carbon reduction initiatives. 

Strategies to reduce carbon production during last-mile delivery include the following:

  • Partner with carriers that use low-emission vehicles. Electric or hybrid vehicles, as well as vehicles powered by alternative fuels, significantly reduce carbon emissions from transportation. The major U.S. carriers—FedEx, UPS, and USPS—all use EVs to some extent or have plans to develop large EV fleets in the near future.
  • Consolidate shipments. Combining multiple customer orders into a single shipment reduces the number of trips needed, cutting down on emissions per product delivered.
  • Make your logistics warehouses more sustainable. Optimize warehouse operations to reduce energy consumption by using energy-efficient lighting and heating systems.

Simplify last-mile delivery with EasyPost

And there you have it: nine last-mile optimization strategies to help you save money, keep customers satisfied, and reduce your environmental impact. 

Of course, optimizing processes requires investing in the right tech. When it comes to shipping, you need a platform that can keep up with your order volume, automate tedious manual processes, provide data visibility, and allow you to access negotiated carrier rates more efficiently.

The EasyPost Enterprise suite of solutions offers all these capabilities—and more. With industry-leading uptime and sub-second shipment processing speed, EasyPost Enterprise Shipping helps large businesses like Dollar Shave Club and Fenix Outdoor get packages out the door faster and more cost-effectively.

Optimize your last-mile shipping with EasyPost Enterprise.