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Blog November 2021

Last-mile delivery: meeting customer expectations post-Covid

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Demand for last-mile delivery

Lockdown created a worldwide boom in last-mile delivery. Ten years’ worth of predicted growth in online shopping took place within three months. If you had to re-read that to comprehend it, we don’t blame you.

E-commerce has turned shopping into a 24/7 experience. Demand for last-mile delivery was already set to triple by 2050, but the pandemic accelerated the shift in e-commerce activity. In the U.S. alone, e-commerce increased by up to 44% over 2019. In some countries around the world, it’s doubled. The Adobe Digital Economy Index predicts that global e-commerce will hit U.S. $42 trillion this year.

All of this is created by a shift in consumer behavior and priorities. Today they’re looking for cost-effective, yet quick delivery options. “Cost-free” is a more accurate description, with 73% of shoppers abandoning their online cart if a delivery fee is charged. Other trends surfacing: 43% of consumers choose next-day delivery, with 17% dropping a brand if a long delivery wait is involved.

Those are the problems delivering to the end customer. Delivering stock to retailers has its own challenges, namely, driver shortages and disrupted supply chains due to the pandemic.

The pressure on retail logistics

Logistics providers have to handle an ever-increasing volume of items, which slows delivery down while driving up costs. It also slams the door shut on affording any flexibility in delivery time slots, which are already tight thanks to rush hours and traffic congestion.

The last mile represents the most time-intensive aspect of the e-commerce supply chain. It’s also the most expensive part of an item’s journey, accounting for anywhere between 35 and 53% of total shipping costs.

Last-mile delivery demands speed and accuracy to strengthen customer satisfaction and with it, brand loyalty. This puts a tremendous strain on margins for the logistics provider. The challenge is, how do you meet customer expectations and protect your margins? Customer expectations change with advances in technology. And its advanced technology that makes meeting those expectations possible.

Optimising logistics

AMCS Transport Optimisation Suite is a cloud-based optimisation system for businesses involved in distribution and collection routes. It integrates with any systems you might have, or you can add AMCS modules, such as AMCS Web Portal and AMCS Mobile Web, to maximise efficiencies during transport execution.

Keep in mind that the modules you choose should always address specific problems. AMCS Web Portal links to your planning and optimisation systems, either a solution you’re currently using, or the powerful AMCS Transport Optimisation Suite. (It can even act as a light planner on its own.) With AMCS Mobile Web in the mix, you can collect data from the trucks in real time, which is sent to AMCS Web Portal. You can also send data to your trucks. This is what digitalisation is all about – a seamless flow of communication between devices, giving you insights into operations, enabling you to monitor progress as events happen.

What does AMCS Transport Optimisation Suite do? Quite a lot to help you improve customer service, by exploiting every last efficiency gain in your distribution activity.

AMCS Transport Optimisation Suite optimises routes and sends them to AMCS Web Portal. Any relevant team member can view the routes here. The web portal sends the optimised routes to the driver’s in-cab device, either a smart phone or tablet. The driver is ready to execute optimised routes with GPS. As progress is made, or if unforeseen events happen, the driver can send status updates to the web portal. And because this is happening in real time, you know exactly what’s happening right then and there. This enables you to update customers if you need to.

Of course, AMCS Web Portal and AMCS Mobile Web are add-on modules to help you get the maximum efficiencies possible during execution. AMCS Transport Optimisation Suite is, as the name says, integral to planning your routes and can stand alone.

Advanced route planning

The more complex the logistics, the more advanced route planning is needed. And considering the different layers in retail distribution – inter-depot transport, distribution from various depots and the routes for each vehicle – this is anything but simple. AMCS Transport Optimisation Suite features advanced algorithms that improve route quality and optimise distribution. This cuts out the waste and ensures efficiency and economy. And when waste is eliminated, you can better meet customer needs.

The algorithms enable dynamic route planning based on ad hoc orders. The system even delivers order pricing and time slotting during the order-taking process. As orders are confirmed or changes received, AMCS Transport Optimisation Suite instantly re-optimises the route plan. Changes can involve information about final ranking, changes in volumes due to packing, status updates from vehicle in-cab systems – anything that will affect customers is calculated into the plan.

By making distribution intelligent, you’re equipped to meet tight delivery windows every single day, building a loyal customer base in the process. It even allows time-slotting for new customers. In the on-demand world we now live in, this is essential to customer satisfaction.

Territory and district planning

If you have a network of depots, then you’re already familiar with the complexity of co-ordinating which depot to use to service which orders. There are too many elements involved, from the customer base itself to fluctuations in order volumes, to make this a simple process.  AMCS Transport Optimisation Suite does this for you, cutting costs in the process and ensuring you’re able to meet customer demands.

Master plans

Complex sets of visit frequencies and patterns according to seasons determine master planning and master routes. The system also allows you to move visit days for certain customers to increase efficiency and spread volumes over weekdays. You can easily insert new customers into master plans. AMCS Transport Optimisation Suite enables you to be tactical with your master planning.

What if?

Evaluate how new strategies or policies would play out – or know how any new legislation would affect your company. AMCS Transport Optimisation Suite enables “what if” scenarios for you to test various outcomes, providing you with insight into how issues would affect customer relationships. Your scenarios might involve the impact of using different distribution sites, vehicles, combining distribution with back-haul transport, or planning with or without geographical restrictions. Everything you do will affect your customers, and the ability to perform “what if” scenarios helps you improve your service.

What you can expect

Efficiencies in your distribution activities benefit customers. That’s the bottom line. We’ve seen this time and time again from users of AMCS Transport Optimisation Suite, who report significant improvements in customer service and visit accuracy, with close to a 100% service fulfilment rate.

The efficiencies gained by AMCS Transport Optimisation Suite deliver additional results, of course: up to 25% fewer vehicles and driver shifts needed. Users have also experienced a reduction of up to 30% in the number of miles driven, driving time and CO2 emissions and up to 90% less time spent optimising routes. Those that integrated their systems experienced a dramatic decrease in time spent on follow-up.

Meeting customer expectations with timely deliveries is no longer hit and miss

Judging by the results users have already experienced, there’s a lesson here. The efficiencies that enable you to reduce operating expenses also help you meet customer expectations by providing better services. It’s worth remembering that success depends on your customers’ satisfaction. That’s ultimately what AMCS Transport Optimisation Suite does. The efficiencies you experience trickle down to your customers to provide them with excellent service.

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