The current e-commerce final mile delivery landscape is challenging. The growth of online shopping and consumer expectation for fast delivery has turned the traditional shipping economy-of-scale on its head. The long distance shipping segment of logistics is fairly well optimized to take advantage of a many-packages-per-stop model. Final mile delivery is the last leg of a product’s journey to the consumer and it is a one-package-per-stop model that is significantly increasing the cost to deliver.

Within that bigger picture are the specific challenges facing shippers trying to deliver in very different locations.

Urban Final Mile Delivery Challenges

On the positive side, consumer density in urban centers offers the opportunity to lower costs by optimizing shipping runs so that more packages are delivered per mile. Also, last mile delivery can be more efficient in cities with layouts that have well-defined population clusters. Unfortunately urban areas also offer challenges that offset those savings like traffic congestion, lack of parking, and inaccessible destinations such as gated buildings, or insecure destinations with the risk of theft. Some congested cities are also adopting noise or pollution control regulations that limit or restrict vehicle access. Additionally, transportation hubs and warehouses have traditionally been located outside urban areas. To optimize final mile delivery, companies are trying to bring those hubs closer to the consumer as a way to speed delivery and lower costs. High real estate costs and lack of available space in dense city centers are forcing them to get creative.

Suburban and Rural Final Mile Delivery Challenges

Final mile delivery to suburban and rural areas pose different challenges. Lower population densities and longer distances between delivery stops make it hard to optimize rural and suburban routes. Also, destinations are usually located at greater distances from distribution centers or warehouses. Rural destinations can sometime be difficult to locate and packages left on doorsteps in suburban areas are also at risk for theft. And if a delivery fails, for any reason, the second attempt has to cover those same long and inefficient distances.

Strategies for Optimizing Final Mile Delivery

The growing demand for final mile delivery that is fast, convenient and affordable is behind a number of new strategies and technologies being explored and pilot tested by transportation companies and retailers.

• More and smaller distribution centers located in urban centers
• Placing smaller fulfillment centers in retail space close to population clusters
• Partner with national brick-and-mortar retailers for pick-ups and returns in stores
• Smart lockers for consumer pick-up
• Choice of location – create a network of locations partnering with gas stations and dry cleaners etc. for pick-up or placement of lockers
• Mobile smart lockers (autonomous vehicles that can navigate sidewalks and bring the locker to the consumer – or to delivery workers)
• In-trunk delivery (to receive packages while parked at work or at home)
• In-home delivery (deliver inside when consumer is not home)
• Drones for lightweight, high-value delivery
• Drones to get package from fulfillment centers to delivery vehicles
• Launching drones from the delivery vehicles for ‘last yard’ delivery
• ‘Mobile inventory’ model based on a large network of autonomous vehicles
• Partner with intercity bus and rural public transit operators
• Delivery by motorbikes, cabs and bicycle teams (in developing countries)
• Use GPS and smartphones to deliver packages to consumers wherever they are
• Crowdsourcing – local couriers using their own vehicles for delivery

Only time will tell which of these innovations will prevail and how soon they will become common practice. What is certain is that the demand will only rise.