Have you ever ordered things online and then your order is delivered to your house?

“Knock, knock, your package is here!”

That’s probably the thing we most want to hear when we are waiting for our packages to arrive.

source: fixlastmile.com

GET TO KNOW ABOUT LAST-MILE DELIVERY

As technology develops, the packages we order can arrive at our homes in a matter of days, even hours. But do you know how the logistic delivery process is until the package arrives at your home? In general, the goods we order will go through the following three stages, including first mile, middle mile and last mile delivery (figure 1). Data from DHL.com shows that last mile delivery contributes around 53% from shipping costs. As for last mile delivery can be defined as delivery from the nearest point which is the last step of the e-commerce supply chain.

Figure 1. Stages in Logistic Delivery Process

In accordance with an article published by FarEye, there are seven challenges that need to be resolve by last-mile delivery in 2021, including:

  1. The cost of last-mile deliveries
  2. Delivery allocation and address location
  3. Achieving routing efficiency and route optimization
  4. Managing last-mile delivery density
  5. Unpredictability in transit
  6. Availability of customer
  7. Meeting fulfillment timeline
Figure 2. Seven Challenges in Last-Mile Delivery (source: FarEye)

In 2024, it is predicted that e-commerce sales for retail worldwide will reach USD 6.4 trillion (eMarketer, 2020). Therefore, there will be a high standard of demand from consumers that the delivery must arrive on time or even faster. Consequently, optimization is needed to increase efficiency in the last mile delivery process. According to an article published by DHL, there are several key points in last-mile delivery to be considered to ensure customer orders arrive on time including localization, crowdsourcing, smarter shipping, and better routes. Localization is intended to prioritize the best-selling items to be placed in regional warehouses. Meanwhile, crowdsourcing is aimed at using the services of online transportation service providers for delayed delivery of goods. These online transportation service providers such as Deliv in America or Gojek in Asia. Furthermore, related to smarter shipping, it is designated for delivery using technology or tools such as drones to reach areas that are obstructed by landscapes. The last one is the better routes, where this method can select the best route automatically, so it can increase productivity by 20-40%.

ILLUSTRATIVE CASE: BETTER ROUTES SIMULATION

To simulate the better route case, Cityplan uses a logistic delivery case for online shopping. In this case, there are several customers locations who have done online shopping – hereinafter referred to as demand point where their ordered goods must be delivered. The Network Analysis method is used to find the best route for one vehicle to visit several stops. The first step in conducting network analysis is building a road network (figure 3). After that, making the route by adding the road network and demand points (figure 4). The analysis results of creating the best route can be seen in (Figure 5).

Figure 3. The Road Network that Has Been Formed
Figure 4. Distribution of Customer Locations (Demand Points)
Figure 5. The Best Route for Logistics Delivery to Customers

The figure above shows the best route that has been created for a vehicle to deliver the logistic orders at multiple stops simultaneously. As can be seen, there are some demand points that are not served by this route. This can be caused by geographical conditions that prevent vehicles from passing or the road network that is not formed around the demand point, hence the delivery cannot be made. However, this problem can be overcome by regrouping demand points and creating a new route. Selection of the best route is needed to reduce delivery failures, which will undoubtedly be detrimental to both the customer and the seller, which reduces customer satisfaction. In addition, selecting the best route will also result in efficient delivery routes which will have implications for shipping costs (costs for fuel and delivery personnel). To find out more about creating the best route for your logistics shipments, please do not hesitate to contact us at:

Email: [email protected]

Linked in: Cityplan Indonesia

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