Why the Final Mile Is the Most Complex Component of the Supply Chain

Supply chains are layered in complexity, from the sourcing of materials to manufacturing, production, distribution, delivery and everything in between. However, when it comes to logistical challenges, the final mile may be the shortest leg in a product’s journey, but it’s also the most critical…and it can make or break the success of a supply chain. By understanding the unique challenges that plague the final mile, companies can work to develop strategies for success to ensure their customers and end consumers are happy.

Complexity in the Final Mile

Controlling costs is a significant challenge when it comes to final mile and home delivery, accounting for 53 percent of total shipping costs. In 2023, final mile delivery held a total value of $140.48 billion, and this value is expected to increase to more than $200 billion by 2027, meaning that the final mile will likely become an even larger percentage of overall transportation spend. Many logistics organizations operate on razor-thin margins — and because consumers increasingly expect brands to deliver fast and free shipping — it will become even more challenging to keep rising costs at bay for most shippers and logistics companies.

Consumer expectations around delivery timelines and cost are an additional challenge. Digital Commerce 360 reports that 98 percent of respondents to a recent survey indicated that delivery is a key determining factor in their loyalty to a brand, yet 44 percent said that brands are not delivering the positive experiences they expect. As more and more customers expect same- or next-day delivery as a standard, brands are preparing to rise to the occasion, with 64 percent of retailers planning to offer these options by 2027.  

Supply chains need to be agile, scalable and flexible to accommodate changes in demand, especially during peak periods. This requires having a large network to meet timing expectations for delivery, in addition to reverse logistics and exception management to seamlessly handle issues when deliveries don’t go as planned.

Why Most Companies Struggle in the Final Mile

When it comes to meeting customer expectations, the final mile has little room for error. Companies often overpromise and underdeliver when it comes to delivery timelines, which directly impacts the customer experience. Rather than building custom final mile solutions tailored to each customer’s unique needs and expectations, companies try to force their final mile strategies to fit into existing logistics models, leaving a great deal to chance and opening the door for disappointed customers. Additionally, poor routing optimization and lack of planning for contingencies upfront can result in delays due to traffic, weather and other factors, which directly impact the customer experience…and when customers have a negative experience with a brand, the majority (66 percent of B2B buyers and 52 percent of B2C customers) will stop making purchases from the brand altogether. The experience often extends to exception management and reverse logistics as well. When customers are able to make returns easily, 96 percent will continue to purchase from a brand.

In the end, failure to maintain a focus on the customer and their experience with a brand will separate the leaders from the laggards, particularly as it relates to the final mile.

Delivering Value for the Customer in the Final Mile

Creating consistently positive customer experiences is contingent upon a brand’s dedication to remaining focused on the customer from the first to final mile. For NXTPoint Logistics, that involves a commitment to being People Powered. Customer Driven.

At the heart of our dedication to people (both internal and customers alike) is our focus on the three Vs:

• Voice of the customer
• Values
• Visibility

The voice of the customer is critical to our pursuit of continuous improvement. Working hard to create positive experiences with every single delivery means a willingness to accept positive and constructive feedback and to use that feedback to become the best we can be.

In order to stand apart in the competitive world of logistics, our values must also be reflected everything we do. Whether it’s how we treat each other internally or how we communicate with customers and prospects, our team always remains committed to our values: trust, innovation, teamwork, caring and agility.

And finally, visibility is central to the customer experience. To deliver full transparency for our customers, we are dedicated to investing in innovative technologies and ensuring proactive communication to create a seamless service experience for our partners. It is why we are trusted by some of the most well-known brands in the world with the highest standards and expectations for the customer experience, and our ability to exceed their expectations with every delivery is directly tied to our commitment to remaining People Powered. Customer Driven.

When it comes to the final mile, companies can’t afford to settle for subpar service and experiences. When selecting a logistics provider to handle this critical stage in the supply chain, ensure that they have the experience, expertise and commitment to excellence needed to create exceptional experiences — every time.

Click here to learn more about NXTPoint Logistics’ final mile services (including high-touch, white glove and value-added services), and reach out to our experts to learn how we can elevate your final mile experience.