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The last mile: Why so important?

Robots, drones or cargo bikes: What will it be today? 

What almost sounds like something out of a futuristic movie is partly reality. When it comes to customizing last-mile delivery, creativity - and sustainability - knows no limits. And that's a good thing: After all, more and more people are ordering online, more and more parcels are being shipped... ergo, more and more of a burden is being placed on the environment. 

Opportunities to make the last mile more environmentally friendly are proliferating. Fortunately! Because although there is only talk of "one" last mile, it has a lot going for it. From parcel machines to time-window delivery to the drones mentioned above. So far, so good. If there weren't one or two little problems... 

What does last mile mean?

But let's start at the beginning: What is the last mile anyway? The last mile is the final part of the transport. It is the distance the parcel travels from the parcel service provider's depot to the last stop. In most cases, the last stop is the customer's front door. However, it can also be an agreed pick-up location. In B2B, it is ultimately the stores where the products are then delivered to the end customer. 

Fun fact: The last mile is not always - rather: almost never - exactly one mile long. The length of the path can vary. In fact, one mile is almost optimistic thinking. Depending on how far the distribution center is from the city center, the "one" mile can quickly become several. 

Why is the last mile so crucial? 

Anyone who has even dabbled in logistics will have heard "last mile" more often than any other CEP term. The reason: Compared to long-distance transport, it is more time-consuming, more expensive and not as efficient: Because very few people coordinate their orders in such a way that they receive several packages with one delivery at the same time. Most of the time, only between one and two are delivered at the same time. The time and costs involved are difficult to scale - especially when returns are also included. 

The volume of parcels at peak times, such as Christmas or Black Friday, cannot be compared with the summer months, when almost everyone is on vacation - so flexibility is the order of the day. Traffic congestion, parking spaces and accessibility to customers are also extremely difficult to plan for. Moreover, since different customers are delivered every day, no standardized route can be planned. Rather, routes vary from day to day - so route planning technology must be used cleverly so that they are maximally efficient. You can read more about this in the section after next. 

In addition, the suppliers are in direct contact with the customers. If the delivery is delayed or there are complications, the delivery experience can be perceived as bad by the customer - even though the logistics went smoothly beforehand. And, as we all know, e-commerce thrives on satisfied customers... 

Last shirt for last mile?

Okay, admittedly: the last mile is not that dramatically expensive. Nevertheless, the costs for the last mile account for between 30% and 60% of the total transport costs. It's no wonder that people are now desperately looking for more cost-saving solutions. Of course, the obvious solution is to simply make customers pay more for shipping - the Oliver Wyman consultancy "Last Mile 2028" already assumes that delivery costs per parcel will double. 

But there are other solutions: Transport costs can be reduced, for example, by selecting a suitable transport company or even by negotiating prices.  

After all, very few customers like to pay money for shipping. And you don't just want satisfied customers, you also want to save as much money as possible and be sustainable on the road. Simply leaving the packages in the hallway or dropping them off with neighbors can't be the only way... The good news: it doesn't have to be.

Precisely because the problems of the last mile are well known, new solutions are being intensively sought (Disclaimer: Liefergrün is right at the forefront... :)) 

Way optimization makes happy - you and the customers 

One of the most important approaches: Route optimization. More efficient routing not only saves your drivers' nerves, but also time and money. Because urban traffic is neither easy to calculate nor to plan. 

Artificial intelligence is used to calculate the best routes. The delivery routes are optimized so that the specified delivery time can be retained. There are now even forecast time models that take into account peak traffic times or fluctuations in shipment volumes.

Welcome to the future

The drones and robots mentioned at the beginning of this article also play a not insignificant role in optimizing the last mile. If we look at how fast and how far mankind has developed in recent years, there is no question that your customers will soon be supplied by drones and the like. 

There are already pilot projects, such as the one in Hamburg, that show how much potential there is in new technologies: The logistics company Hermes is testing delivery with robots together with the startup Starship Technologies. Yes, that's right: What we usually only see on TV is becoming reality. The robots can deliver parcels within a radius of 5 km within 30 minutes. A practical option, especially in view of the increasing need for personnel - even if it is still in the test phase. 

Drones are also on the rise. Amazon, for example, has already tested drones and obtained permission to relieve mail carriers of work. Especially in densely populated areas, drones can provide support - to a certain extent: Because the drones are not capable of carrying immeasurable loads and so far can only cover distances of more than 20 to 30 km. 

Sustainability in the last mile

According to a report published by the World Economic Forum 2020, the growth of the logistics sector will result in a 20% increase in CO2 emissions. On the one hand, this is alarming - on the other hand, it is also motivating: because this will force us to deliver more sustainably. Fortunately, there are already some options. 

The cargo bike, which is also used in our country, is one of the most popular. Also known as Cargobike, it delivers packages without emissions. No wonder: only the muscle power (and sometimes the electric motor) of the riders is needed to propel it. 

Moreover, contrary to what their name suggests, cargo bikes take the strain offroad traffic. On the one hand, they reduce the area that would be needed for a fuel-powered vehicle by a full 80%. On the other hand, they increase the quality of life for local residents because they do not cause any noise. 

By the way, in our article on the subject of cargo bikes you can find out even more about the advantages and why we at Liefergrün are literally crazy about cargo bikes ...

Microhubs: small but mighty! 

Especially in combination with cargo bikes, microhubs are an indispensable part of future sustainable logistics. The small depots distributed throughout the city shorten delivery routes enormously and ensure faster deliveries. 

Even if you're still making old-school deliveries with gasoline-powered delivery trucks, microhubs are a good option for relieving urban traffic congestion. In addition, transport costs can be reduced if the microhubs are closer to their destination and the tours can be managed intelligently. You see, microhubs may be small, but they are all the more efficient for it. Especially when microhubs and cargo bikes go hand in hand (as with delivery green...) nothing stands in the way of a sustainable last mile. If you want to know more about microhubs, check out our article"Microhubs: The salvation of e-commerce?".

What will the last mile look like in the future?

Of course, no one can say exactly where logistics is headed. But we would like to venture a hypothesis: It is likely that drones, robots and other autonomous vehicles will be on the road more often in cities. Good for the environment, supportive for suppliers - but not yet fully developed. 

For as useful as drones can be, they are limited in their capabilities. Amazon's drone, for example, can only transport packages weighing up to 2.3 kg and can only fly 24 km. For everything else, alternative delivery methods have to be used. This also applies to robots, which are not yet developed to the point where they can hand over parcels to neighbors. Let alone a delivery to the agreed safe place. 

And that's where we come in. 

Final thoughts on the last mile

We at Liefergrün are curious to see how logistics will develop over the next few years. Nevertheless, we are also aware that action must be taken now. Because continuing to wait would be fatal. 

That's why we also rely on the combination of cargo bikes, electric vans, and microhubs. Together with live tracking, time window deliveries and convenient returns, we not only put customer satisfaction first - but also sustainability. 

While others wait for sophisticated drones and the like, we are already optimizing your last mile today. Are you curious? Feel free to write us! 

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