It’s no surprise that e-commerce shipments are an increasing part of the distribution activities for B2C manufacturers and retailers; however, the large amount of big, bulky, dense, fragile and high value products, which often require LTL services instead of parcel, has added a surprising level of complexity for many companies. With these diverse product types becoming more commonplace for online purchase and delivery, a company’s last mile strategy must also encapsulate creating a positive customer experience for these product categories.
Unfortunately, the lack of structure for these special LTL services makes it difficult to “delight” customers consistently. If left unmanaged, last mile execution can be the weakest link in the delivery experience, particularly as it pertains to big and bulky products whose packaging design may not account for certain last mile hazards. Designing and implementing flawless last mile services should be one of the highest priorities for brand owners since this moment can literally determine whether a customer will consider additional purchases and/or pass on positive referrals.
Some manufacturers have left their last mile strategy in the hands of retail partners who often rely on price-driven, third-party delivery partners without any set guidelines or agreed upon service levels. In this scenario, the manufacturer loses control over the final impression of the transaction the moment the trailer pulls away from the dock. Despite this reality, they are ultimately still responsible for customer satisfaction.
With all this in mind, we felt it pertinent to socialize some industry gaps and concerns regarding the lack of standardization for LTL last-mile delivery solutions which we formulated after in-depth discussions with some of our clients, colleagues, and industry partners.
Whether you are a direct-to-consumer manufacturer or an online retailer, you need to determine how tightly you must manage your LTL last mile delivery services. Is it possible to have influence or ultimate control over the quality of last mile delivery of your products? Should you require certain handling tools or capabilities? Some options to consider include specifying your own fleet of trusted carriers or established partners as well as developing and documenting your standards for various levels of delivery services which you can hand-off to your retail partners. A broader approach may be to influence an industry solution that would tier delivery services and hold delivery agents accountable to service level certifications and compliance.
Without a clear definition of the handling methods employed at every stage of the transport journey (including the last mile), it is harder to protect large, fragile products and the end result is often product damage. An effective packaging system is designed for the environment that it travels through. Leaving this last step as undefined really ties the hands of packaging engineers, preventing them from implementing the appropriate designs for a dynamic supply chain. Can brand owners help to define the requirements of the last mile deliveries so packaging can support the required product protection? With the multitude of touchpoints created during the final moments of delivery, developing the appropriate packaging strategy is a crucial step in your omni-channel strategy.
Determining the standards for a delivery partner can be difficult since many organizations base this decision mostly on price. However, there must be more to the assessment than “cheapest” and “fastest” when choosing your delivery partners. As an organization, you should feel comfortable establishing guidelines and evaluating what handling techniques and cleanliness standards your partners utilize when delivering your product either to the doorstep or within your customer’s home.
For higher value items, you may be interested in gathering direct feedback from your customer through your carrier partners, particularly as it pertains to the product’s packaging and the supply chain hazards present at the final location. This is another partnership opportunity for your delivery partner as they can help you validate whether or not your product arrived on time, damage free, and if it was placed in the specified location. Such metrics can create accountability and help you to drive the effectiveness of your intended last mile services. Working with delivery partners who follow strict guidelines as well as the proper systems can help alleviate concerns and improve your customer satisfaction levels.
Some organizations experience higher levels of success with their partners by establishing transparency with their customers regarding the delivery providers. By providing background and contact information of your delivery partners in advance, you provide your customers with “peace of mind,” which in turn results in trust and loyalty. However, depending on the size of your organization and the competitive disadvantage that may result from revealing too much about your delivery partners, you should carefully evaluate the potential outcomes associated with this strategy.
Juggling multiple carrier partnerships
When it comes to carrier providers, the common conception of “less is more” is typically employed. However, it may be beneficial to utilize a wider range of carrier partners as long as you can establish consistency amongst them in terms of handling guidelines, service expectations, and availability. Unfortunately ensuring consistency occurs across all partnerships may be challenging if the number is too high. Perhaps the largest factor to consider when determining the “ideal carrier amount” is the overall impact on your supply chain efficiency.
Building an advanced packaging strategy around your LTL last mile delivery experience remains as important as your carrier selection and management process. Furthermore, communicating with your customers and delivery partners — before, during, and after delivery — can help determine how to best formulate the appropriate packaging for your product. The key to determining the best method is to remember this challenge isn’t siloed as a “transportation problem” or a “packaging problem” and requires input from multiple functions of the supply chain. If your organization is seeking to get ahead of or alleviate omni-channel challenges, having a conversation with supply chain experts with cross-functional experience often proves the best place to start.
Nancy Matchey is the Vice President of Chainalytics’ Packaging Optimization practice, which delivers professional consulting services providing global solutions to complex packaging challenges across the supply chain.
A senior manager in the Chainalytics’ Transportation competency, Bryan Wyatt has over 20 years of experience and expertise in transportation operations, strategic sourcing, data analysis and logistics planning, as well as logistics/supply chain change management.