Frontier Supply Chain Solutions

The importance of last mile carriers with the growth of E-commerce

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November 10,2020

The growth of last mile carrier services:

Consumers are choosing to order online and have their parcels delivered by last mile carriers to their doors, a trend that is becoming increasingly common. This trend is due to the growth rate of the North American e-commerce industry. Currently, the industry is valued around $912 billion, a number that continues to grow at a rate of 13% per year. This demand has created endless business for supply chain companies across the continent. However, with this increased business, many challenges arise along every step in the delivery process. These challenges are often magnified for the last mile carriers in the last portion of the delivery process.   

What is last mile delivery?

When a parcel is ordered online, it will experience many intermediate stops before reaching its destination. Last mile carriers make up the final stretch of the delivery process. This means that they are the last ones to interact with a parcel when it gets dropped off at the buyer’s doorstep. The last mile delivery portion of the process faces the most challenges and makes up the largest component of the entire cost. It is estimated that this cost accounts for 53% of the total delivery process.  Various challenges arise due to many consumers living in rural areas with limited access to convenient delivery services. Last mile courier’s goals are to offer fast, reliable, and cost-effective services in these remote locations while keeping customers satisfied.

The challenges involved with being a last mile courier:

The residents of rural communities often face limitations when it comes to fast, price-friendly courier services. These limitations are due to the restrictive delivery routes that exist within remote regions. Many of these remote regions exist throughout Saskatchewan, Manitoba & western Canada. Mid-sized Canadian couriers can provide reach to remote customers due to their diverse networks. Due to this reach, customers have access to more parcels than ever before. Additionally, this reach helps customers avoid the slow service or higher costs that generally get  associated with remote delivery. Mid-sized couriers understand how to mitigate costs, while at the same time not sacrificing the quality of service, during the last mile of delivery. Because mid-sized couriers understand these constraints, large companies who become over extended, often find them beneficial to partner with.

Opportunities to reduce last mile costs & improve delivery using zone skipping:

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Consolidating parcels:

Costs are kept low along these routes by consolidating parcels for shipment. This method allows trucks to ship higher volumes of parcels per truckload by bundling many orders prior to shipment.  

Zone skipping:

Zone skipping occurs when a company consolidates parcels into one truckload and then ships that load directly to the last mile delivery region. A zone skipping route, for example would be a non-stop shipment from: Ontario to western Canada, or the Midwest U.S to Canada.  

Team drivers:

Using team drivers is the practice of having two drivers per vehicle alternate driving for long-haul routes. This method allows longer distances to be covered in a shorter amount of time, due to the alternating drivers along the lengthy, single trip. Zone skipping services often incorporate team drivers because it ensures faster service for the end customer, in addition to being safer for the drivers. 

Zone skipping improves delivery speed by getting parcels as close as possible to the last mile delivery location, while at the same time reducing costsEliminating the need for parcel courier sortation at each regional hub helps to reduce handling costs. Combining last mile parcel delivery and zone skipping, improves delivery to customers. 

Get in touch with one of Frontier’s team members to find a reliable, cost effective parcel courier.