OPTIMIZING LAST MILE DELIVERY

OPERATIONS IN E-COMMERCE

ALFRED JOSEPH- 3C HIMANSHU GIRI- 16C KUMAR JAI- 22C RAHUL KUMAR- 32C VIMPADAPU VARUN- 50C
 OVERVIEW

Last Mile Delivery Flow chart

INTRODUCTION

What It Is: Last-mile delivery refers to the final stage in

the delivery process, where a package moves from a
distribution centre directly to the customer's door.

Customer Demands: Consumers now expect faster,

more flexible delivery options like same-day or next-day
service, along with real-time tracking and convenient
delivery windows.

3.5 53 10
Billion % lakh
Estimated number of MAIN FACTORS CONTRIBUTING TO THE COMPLEXITY OF LAST MILE DELIVERY
online shoppers in Share of last-mile Delivery Personnel
India by 2025 delivery costs employed EXPENSE CONTROL
Despite being a short segment of the delivery chain, last-mile delivery can account for over 50% of the total
logistics costs, making it a significant focus for cost reduction efforts.

RURAL ACCESSIBILITY
Delivering to remote or rural areas often involves longer distances and poor infrastructure, adding to the cost
and time.

CUSTOMER EXPECTATION
The demand for faster deliveries, often within tight time frames, increases the pressure on
logistics providers

ADOPTING TECHNOLOGY
The Indian last-mile delivery market is expected to Efficient last-mile delivery requires advanced technologies for route optimization, real-time
tracking, and seamless communication between all stakeholders
reach a staggering USD 6-7 billion by 2024
CITY CONGESTION
High population density and traffic congestion in urban areas can lead to delays and increased delivery times
Projected CAGR :15.62% from 2022 to 2027
CHALLENGES

INEFFICIENT ROUTE PLANNING

Inefficient route planning can lead to longer delivery times,
increased fuel consumption, and higher operational costs.
This is particularly challenging in urban areas with traffic
congestion and rural areas with poor infrastructure.
Overview Challenges EFFECTS OF INEFFECTIVE LAST MILE DELIVERY

ELEVATED DELIVERY
DELAYED DELIVERIES EXPENSES

Reasons: Traffic congestion, poor route planning, Reasons: Inefficient routing, high fuel
and logistical errors. consumption, and lack of optimized delivery
Consequences: Customers experience networks.
frustration due to late deliveries, leading to a Consequences: Increased operational costs for
negative perception of the brand the company, which may be
passed on to customers through higher prices.

UNSUCCESSFUL DELIVERY
ATTEMPT
EXAMPLE

Reasons: Incorrect addresses, absence of In late 2021, Walmart faced significant criticism for
recipients, and restrictive delivery time windows. delivery delays and issues with its online grocery
Consequences: Additional delivery attempts delivery service. Inefficient routing, coupled with
increased demand for online shopping, led to perishable
increase costs and delay the delivery process,
items arriving late or in poor condition, damaging the
inconveniencing customers.
retailer's reputation and impacting customer loyalty
Overview Challenges EFFECTS OF CUSTOMER SATISFACTION

Decreased Trust and Loyalty Reduced Repeat Purchases

Implication: Customers who face delivery

Implication: Repeated delays and
issues are less likely to make repeat purchases
mishandled deliveries erode customer trust.
Outcome: Loss of long-term revenue and higher
Outcome: Customers may switch to customer acquisition costs to replace lost
competitors with better delivery services customers.

Lower Net Promoter Score

(NPS)
Implication: Ineffificent delivery directly affects the
likelihood of customers recommending the brand.
Outcome: A lower NPS indicates poor customer
satisfaction and can hurt the company’s market
position.

84% 70%

84% of consumers would not 70% of consumers say speed

shop with a retailer after having convience and friendly
a bad deliver experience delivery service matters the
most.
Overview Challenges

TECHNOLOGICAL SOLUTIONS
Route Optimisation Software and Automated Real Time Tracking &
Dispatch System Predictive Analytics
Functionality: Determines the optimal delivery routes considering Functionality: Enables live tracking of delivery vehicles and parcels via
real-time traffic updates, delivery windows, and vehicle capacity.
GPS and IoT devices.
Benefits: Minimizes travel time, lowers fuel usage, and cuts down Benefits: Boosts transparency, enhances customer experience, and
delivery expenses.
supports dynamic rerouting.
Example: Solutions provided by OptimoRoute and Route4Me. Example: Solutions offered by FourKites and Project44.
Functionality: Leverages AI and machine learning to automatically
allocate delivery tasks to drivers based on their current location
and load capacity. Functionality: Analyzes historical data to predict demand trends and
optimize inventory management.
Benefits: Enhances efficiency, reduces manual mistakes, and
optimizes resource use. Benefits: Improves delivery planning, enhances resource allocation,
and identifies potential delivery issues for proactive resolution.
Example: Utilized by platforms such as Onfleet and Bringg.

Drones & Autonomous Vehicles

Smart Lockers & Pickup Points

Functionality: Utilizes drones and autonomous vehicles for Functionality: Offers secure, automated lockers and designated
small parcel deliveries, particularly in remote or difficult-to- pickup locations for parcel collection.
access areas. Benefits: Minimizes failed deliveries, increases customer
Benefits: Reduces delivery time, lowers labor costs, and convenience, and decreases delivery costs.
mitigates traffic congestion. Example: Services by Amazon Locker and InPost.
Example: Initiatives by Amazon Prime Air and Starship
Technologies.
Overview Challenges

COST IMPLICATIONS

Expenses related to delivery staff Transportation Costs

Wages and Benefits: Includes salaries, benefits, Fuel and Maintenance: Encompasses expenses for
and insurance for drivers and delivery personnel. fuel, vehicle maintenance, and repairs.
Training: Covers costs related to training and Vehicle Depreciation: Reflects the reduction in
certifying drivers. value of delivery vehicles over time.

Infrastructure Costs
Additional Factors

Failed Deliveries: Issues with unsuccessful drop-

Warehousing: Expenses for running distribution offs.
centers and local hubs. Urban Delivery Challenges: Obstacles in city-based
Technology: Spending on software for route deliveries.
planning, tracking, and automated dispatch Customer Expectations: Demands and standards
systems. set by customers.
Overvie Challenge
w s

REDUCING LAST MILE COSTS

Combine the delivery process Leverage Crowdsourcing

Using crowdsourced delivery services allows businesses
Grouping deliveries by location and time windows to employ independent drivers for pickups and deliveries.
can minimize trips, reduce overall distance, and This cost-effective method enables businesses to pay
lower transportation costs. solely for the delivery services they require, whether it's
for medical couriers, corporate catering, flower
deliveries, or on-demand food deliveries.
Streamline delivery routes
Alternative Delivery Methods

Optimizing delivery routes is key to cutting last-mile 4o

Opting for alternative on-demand delivery options, such
costs. Multi-stop route optimization software helps as electric vehicles, can reduce last-mile delivery costs
plan efficient deliveries by considering traffic, delivery and offer a more eco-friendly alternative to traditional
windows, and vehicle capacities, reducing distance, delivery trucks.
time, and fuel costs.
New Gen Tech and Automation enhancements Data Analysis and Continuous Improvement

Adopting technology and automation can cut last- Examining delivery data and key performance indicators
mile delivery costs over time. Using barcode (KPIs) such as success rates, delivery times, and
scanning, ePOD, real-time tracking, and automated customer satisfaction reveals bottlenecks and
sorting systems enhances efficiency, reduces errors, inefficiencies. This data-driven strategy fosters ongoing
and improves customer satisfaction. improvement and cost reduction.
Overview Challenges

FUTURE TRENDS IN LAST MILE DELIVERY

Drones are transforming the delivery landscape. By early 2022, more than 2,000
commercial drone deliveries were occurring daily, providing a faster, eco-friendly
alternative that delivers directly to customers while avoiding traffic congestion.

Micro-fulfillment centers (MFCs) are compact, automated warehouses strategically

positioned close to consumers. These facilities streamline inventory management with
real-time tracking and automation, offering significant advantages to e-commerce
retailers. By cutting down transit times and boosting inventory visibility through the use
of RFID and scanners, MFCs enhance operational efficiency and reduce costs.

Delivery lockers provide a sustainable and efficient approach to last-mile delivery. These
automated hubs centralize package pickup and returns, reducing the need for multiple delivery
attempts, cutting costs, and lessening environmental impact. Consumers enjoy the
convenience of flexible collection times and the ease of handling returns without the need to
schedule pickups.

Blockchain, IoT, and Big Data are revolutionizing last-mile delivery. By integrating real-time
tracking, secure data, and advanced analytics, these technologies boost efficiency,
transparency, and customer satisfaction. Blockchain fosters trust and accountability, IoT
devices enhance route optimization and package handling, and Big Data offers valuable
insights to refine operations and improve the overall delivery experience.
Overview Challenges

Environmental Impact Sustainable Practices

Carbon Emissions: Significant contributor to urban EVs, Bike and Foot Deliveries: Reduce carbon emissions
pollution from delivery vehicles. and and lower traffic congestion in dense urban areas.
Traffic Congestion: Increased delivery vehicles lead to Optimized Routing: Reduces fuel consumption with
congestion, higher fuel consumption, and air pollution. efficient route planning.
Packaging Waste: E-commerce growth results in more Green Warehousing: Eco-friendly warehouses with energy-
packaging waste, harming the environment. efficient systems and sustainable materials.

Technological Innovations Regulatory and Policy Support

Drones: Decrease road traffic and emissions with direct Government Incentives: Tax breaks and grants for
aerial delivery. adopting green delivery practices.
Autonomous Vehicles: Optimize routes and schedules Regulations: Mandates for companies to reduce carbon
for efficiency and reduced emissions. footprint, encouraging sustainable delivery solutions.
AI and Machine Learning: Optimize delivery routes, International Carbon Credit Market: Companies reducing
predict traffic, and manage schedules to minimize carbon footprints can trade carbon credits for financial
environmental impact. benefits, incentivizing sustainable practices.
Overview Challenges

CASE STUDIES

AMAZON WING

Route optimization using routing software allows

Sustainability Efforts
delivery drivers to make real-time adjustments
based on traffic conditions or new delivery
Net-Zero Mission: Aims for net-zero carbon by 2040.
requests, ensuring continuous optimization.
Electric Vehicles: 13,500 Rivian vans and 6,000 EVs in
India.
This technology will assist logistics businesses to
Drones: Testing Prime Air drones to reduce emissions.
manage delivery schedules and resources more
Renewable Energy: Largest corporate purchaser of
effectively.
renewable energy, powering charging stations.
Additional Solutions: Exploring electric cargo bikes and on-
foot deliveries.
INPOST
Results
Smart lockers provide a secure place for customers to
Electric Vans: Millions of metric tons of carbon savings pick up their packages. This reduces the risk of missed
expected. deliveries and theft. Pick-up points are another
Drones: Significant emission reduction potential. solution, where customers can collect their items from
a nearby store.

InPost, a company providing automated parcel

lockers, reported a 40% increase in usage in 2020.
Customers appreciate the convenience and safety of
this method.
 Conclusion

CONCLUSION

Vital Significance
Improving last-mile delivery is crucial for boosting customer satisfaction and cutting costs in e-commerce.

technological innovations

Enhancing route optimization, implementing real-time tracking, and adopting sustainable practices can greatly boost
efficiency and lower costs.

Associated Challenges

Urban congestion, limited access in rural areas, and increasing customer expectations make last-mile delivery particularly
challenging.

Effect on Customers

Efficient last-mile operations enhance customer trust, foster loyalty, and contribute to long-term success in a
competitive market.

Future Perspective

The ongoing integration of AI, automation, and sustainable solutions will further propel advancements in this area.
THANK YOU