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The Good, the Bad, and the Ugly of Last-Mile Delivery

by Charlotte Freed | Jan 18, 2019

last-mile deliveryTime-sensitive delivery options are changing consumer expectations. Today, the demand for free or 1-day shipping is the expectation and the norm. E-commerce giants like Amazon and Walmart have discovered that speed is one of the keys to consumer satisfaction – but cities and logistics are now struggling with how to keep up with demand.

The demand for last-mile delivery is causing changes in the freight world in the best and worst of ways.  

The Good

With more and more consumers choosing to shop online, the demand for 2-day or same-day delivery has increased. In November, Cyber Monday sales eclipsed $7 billion – a 20 percent increase from 2017. This number screams consumer confidence, and has opened the door for smaller fleets to participate in the delivery boom as household names like FedEx and UPS struggle to keep up with demand. As consumers continue to turn to online shopping for their everyday needs, the opportunity for fleets will continue to increase.

The Bad

As opportunity increases, companies are entering a heated battle for strategically located warehouses. Reports indicated that for every $1 billion in e-commerce sales, a company will need about 1.25 million square feet for warehousing. This has caused companies to increasingly turn to “urban warehouses” or “micro fulfillment centers” often located in the heart of congested urban areas. To complete deliveries, companies are often turning to smaller vehicles like vans, even bicycles at times. With more traffic on the road, urban planners are feeling the pressure to alleviate congestion.

The Ugly

Congestion not only frustrates truck drivers, but it costs trucking companies. In recent years, congestion costs in urban areas have skyrocketed, with the Texas Department of Transportation’s Freight and Intermodal Trade Section reporting a $5 billion increase in just three years. This increase is heavily correlated to the increase in residential deliveries. All across the country cities are unveiling strategic freight plans that address issues such as delivery hours and parking. Until these problems are solved, costs are expected to rise.

To combat major issues associated with the explosion of last-mile delivery, companies are turning to driver management services and recruiting services, like Centerline Drivers, to help manage seasonal highs and lows, unexpected turnover and more, ensuring delivery services go uninterrupted.

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