The delivery of shipments, whether for long or short distances, is what Last-Mile Delivery focuses on. It also focuses on providing customers with the best possible service throughout the journey. Technology solutions such as TMS can help address some of the challenges faced in the last mile, and in this article, we will discuss how TMS can do so.
Transport Management Software (TMS) is a logistics platform that makes use of technology assisting businesses in planning, executing, optimizing the movement of inventory. It also ensures that shipments have the correct documentation. TMS, in most instances, is part of a supply chain management system and is used by distributors, manufacturers and retail businesses.
With the rapid growth of eCommerce deliveries to homes and businesses, there has been greater emphasis on Last-Mile Deliveries. However, businesses are also starting to understand the delivery costs associated with Last-Mile Delivery as the delivery costs take up 30% of the total costs. Companies are beginning to understand how much Last-Mile Delivery can influence their brand’s success as customers who receive excellent quality service are led to making repeat purchases, impacting their business’ future sales.
Technology plays an essential role in resolving most challenges faced in the supply chain, and the same applies to Last-Mile Delivery. TMS can solve most challenges that occur during Last-Mile Delivery, and below are some of the challenges it addresses.
1. Helps gain visibility
In Last-Mile Delivery, visibility helps to ensure customer loyalty. Customers want information regarding where their packages are located in real-time. In the past, businesses could simply offer customers tracking codes, and that was enough. However, nowadays, they require more than that. Therefore, visibility and data regarding this information should easily accessible to businesses.
TMS can assist in providing increased visibility as it helps businesses manage the movement of their goods from one destination to the next. Precise knowledge of the location of goods is gained once there is visibility. Companies can use data acquired throughout to reduce risks in the company. Due to better visibility, businesses can decrease the likelihood of mistakes occurring during last-mile visibility as you will be able to determine when failure usually occurs. The information gained can be used in order to ensure that Last-Mile Delivery is always timely.
2. Route optimization
One of the greatest challenges faced in Last-Mile Delivery is late deliveries. Being unable to stick to the timeline set out can be costly for businesses as it could negatively impact their brand, their bottom line and lead to customer dissatisfaction. Transport Management Software addresses this challenge as it offers route optimization.
Many of the challenges that lead to late deliveries in the last mile are congestion in urban areas and travelling to remote locations. Therefore, through the use of TMS solutions, businesses can create intelligent transportation plans as companies can choose the route that leads them to travel the shortest distance or create simulations of different route configurations to take weather conditions that could occur during delivery into account. There are also pooling options that they can make use of, or they can choose to ship their goods using a 3rd party option which is a cost-effective method.
3. Reducing costs
Last-Mile Delivery is known to be expensive for both the business and its customers. There are many issues that contribute to high costs, such as having to set aside money for things such as failed deliveries, complex routes, drivers’ payment, and any other extra steps that are taken during delivery. Whenever there are failed deliveries, and they need to be rescheduled, then these costs have to be doubled.
TMS can significantly reduce delivery costs. It can make use of real-time data in creating opportunities where they could reduce backhauls, potential delivery delays, reduce the distance travelled during deliveries, and create opportunities where orders can be combined. Businesses will also have access to information regarding where they are spending money and ways that they could possibly spend less money. They have the opportunity to compare different shipper rates, and they could negotiate cheaper rates. Through the use of automation by TMS solutions, there is a reduction in manual tasks, which can be lead to a decrease in admin costs.
4. Supports aggregation
One of the key ways in which TMS can improve last-mile is through aggregation. TMS is also known as an aggregation engine which can be a tremendous competitive advantage. Businesses can have multiple trading partners that assist in the fulfilment of online orders. Aggregation can occur in areas ranging from information, IT systems or the aggregation of small shipments that can be used across multiple delivery routes.
Last-Mile Delivery plays such an essential role in the success or failure of a delivery. To ensure that it is successful each time, TMS solutions can add value to the process, guaranteeing business growth and customer satisfaction.
Have a look at the 5 TMS Analytics That Enhance Supply Chain Processes.