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Q: Why is the \u201clast mile\u201d of the shipping process so difficult and expensive for suppliers and what opportunities does this create for small business owners? <\/strong><\/p>\n\n\n\n A: <\/strong>Last mile shipping cannot be done in bulk and requires lots of people and vehicles, making it expensive. It creates an opportunity for small courier businesses to grow and scale their services. <\/p>\n\n\n\n As soon as cities and countries went into lockdown due to the coronavirus pandemic, there was a surge in online shopping. One year later, even in areas where lockdown measures have been relaxed, the amount of people shopping online has not dwindled. <\/p>\n\n\n\n Even people who resisted eCommerce prior to the pandemic have been entirely won over by the convenience of ordering online and having things delivered to their doorstep. <\/p>\n\n\n\n Recent data found<\/a> that \u201cconsumers spent $861.02 billion online in the U.S. in 2020, up an incredible 44.0% jump compared with 2019.\u201d This represents the highest annual ecommerce growth in the US in the last two decades. <\/p><\/div><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div><\/div>\n\n\n\n <\/p>\n\n\n\n Ecommerce now accounts for 21.3% of total retail sales; and that number is expected to go up in the coming years. <\/p><\/div><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div>\n\n\n\n Studies project that the worldwide retail ecommerce sales will experience a 265% growth rate from $1.3 trillion in 2014 to $4.9 trillion in 2021. <\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n <\/p>\n<\/div><\/div><\/div><\/div><\/div>\n\n\n\n Recent data found<\/a> that \u201cconsumers spent $861.02 billion online in the U.S. in 2020, up an incredible 44.0% jump compared with 2019.\u201d This represents the highest annual ecommerce growth in the US in the last two decades. <\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n Ecommerce now accounts for 21.3% of total retail sales; and that number is expected to go up in the coming years. <\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n Studies project<\/a> that the worldwide retail ecommerce sales will experience a 265% growth rate from $1.3 trillion in 2014 to $4.9 trillion in 2021. <\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n <\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div>\n\n\n\n While this is great news for companies\u2014online shopping has been a lifeline for many companies\u2014it has led to a breaking point in the supply chain and fulfillment process. <\/p>\n\n\n\n At the beginning of the pandemic, consumers increased their tolerance for longer delivery times; however, that tolerance wore off, and consumers today expect faster deliveries than ever before. <\/p>\n\n\n\n The increased demand for delivery services, and shorter delivery times, has supply chain company executives searching for solutions that can make deliveries more efficient\u2014timewise and money-wise. <\/p>\n\n\n\n Many companies are turning to emerging technologies like artificial intelligence, robotics, and edge computing to transform their organizations and their supply chain processes. A survey from Gartner<\/a> found that 80% of supply chain leaders believe that technology can give their companies a competitive advantage. <\/p><\/div><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div>\n\n\n\n Many companies are turning to emerging technologies like artificial intelligence, robotics, and edge computing to transform their organizations and their supply chain processes. A survey from Gartner<\/a> found that 80% of supply chain leaders believe that technology can give their companies a competitive advantage. <\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n <\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div>\n\n\n\n Not only can technology provide companies with a competitive advantage, it could potentially also help them significantly reduce cost and improve operational efficiency: <\/p>\n\n\n\n While focusing on technology can help make supply chains more efficient in the long run, there is a much more pressing matter that courier companies must address: the \u201clast mile\u201d. <\/p>\n\n\n\n The last mile is the final step in the delivery process; it\u2019s when a package arrives at a buyer\u2019s doorstep. The last mile is known for being the most challenging and expensive part of the supply chain process. It\u2019s also a key part of customer satisfaction. <\/p>\n\n\n\n Data suggests<\/a> that \u201cthe cost of providing last-mile services accounts for 41% of overall supply chain costs\u201d, which is more than double than any other category of spend in the process. <\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n <\/p>\n<\/div><\/div><\/div><\/div><\/div>\n\n\n\n <\/p>\n<\/div><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div>\n\n\n\n The last mile is such a pressing issue for companies because \u201clast mile deliveries are eroding profits as organizations typically charge less than what it costs them to fulfill the orders.\u201d The average cost of last mile delivery is $10.01; however, customers only pay an average of $8.08. <\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n <\/p>\n<\/div><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div>\n\n\n\n To make matters worse, only 1% of customers are willing to foot the entire cost of delivery. <\/p>\n\n\n\n Data suggests<\/a> that \u201cthe cost of providing last-mile services accounts for 41% of overall supply chain costs\u201d, which is more than double than any other category of spend in the process. <\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n The last mile is such a pressing issue for companies because \u201clast mile deliveries are eroding profits as organizations typically charge less than what it costs them to fulfill the orders.\u201d The average cost of last mile delivery is $10.01; however, customers only pay an average of $8.08. <\/p><\/div><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div><\/div><\/div>\n\n\n\n Capgemini argues that one way to make last mile deliveries more profitable is by encouraging multiple avenues for fulfillment resources. <\/p>\n\n\n\n Amazon knows this all too well, which is why its logistics division launched Amazon Delivery Service<\/a>. <\/p>\n\n\n\n Amazon Delivery Service is a program that enables people to launch their own package delivery business for as low as $10,000. The program allows small courier companies to use Amazon’s technology and processes to deliver specifically for Amazon.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n <\/p>\n<\/div><\/div><\/div><\/div><\/div>\n\n\n\n <\/p>\n\n\n\n
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<\/figure>\n<\/div>\n\n\nThe Last Mile <\/h2>\n\n\n\n
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