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Last-Mile Delivery: 4 Trends Retailers Should Know

It’s no secret that inefficient delivery routes can cause significant delays during the final mile, leaving customers frustrated and disappointed. And the consequences can be just as bad for your bottom line. According to Business Insider, last-mile delivery accounts for 53 percent of total shipping costs — far more than its fair share.

So what can retailers do to make final-mile delivery work for them, not against them? New last-mile delivery channels are emerging all the time for just that reason. While some of these options aren’t available or practical yet, retailers are already putting others into practice. Let’s take a look at four emerging options and see which ones could help your business solve the last-mile delivery problem.

  1. Crowdsourced Package Delivery

Just as ride-sharing apps have revolutionized transportation, crowdsourcing is starting to shape delivery too. As customers demand faster delivery at a lower cost, some retailers are crowdsourcing last-mile delivery through local courier apps such as Postmates or Doordash. Customers simply select their preferred delivery time through the app, and a local, non-professional driver will deliver the package to the customer.

However, this model does have its drawbacks. Non-professional delivery drivers are often difficult to retain, and in less-populated areas they can be difficult to recruit in the first place. Besides, liability and tracking concerns can be an issue with a non-professional fleet, so many retailers are understandably hesitant to jump in.

  1. Personal Shopping

Some larger big-box retailers are deploying the crowdsourcing model even earlier in the delivery chain. Using services like Instacart, these retailers pay non-professional drivers to select ordered items off the shelves of their brick-and-mortar store, then drive those purchases directly to the customer’s home. This combines personal shopping and same-day delivery, strong value-adds for convenience-minded customers.

However, it also comes with the same liability and retention drawbacks as other crowdsourced solutions. In addition, the added labor from non-professional workers can dramatically increase per-delivery costs — the opposite of what retailers are looking to achieve.

  1. Autonomous Last-Mile Delivery

Fully automated delivery may sound like science fiction, but it might not be far off. Amazon’s drone delivery service has made headlines well before its launch, and numerous startups have developed their own delivery robots. Some of prototypes can take consumers’ packages right to their front door, even navigating stairs and elevators.

Other retailers are considering autonomous vehicles to retain a more typical last-mile infrastructure while lowering personnel costs. For instance, Walmart has partnered with Ford in a pilot program that uses autonomous vehicles to deliver purchases directly from stores.

As far as autonomous delivery is concerned, the industry is still in the testing and planning stages. There are numerous regulatory hurdles, technical bugs and logistical challenges to work out before this is a practical option for any retailer. Nonetheless, it’s a space worth watching.

  1. USPS Destination Delivery Unit (DDU) Shipping

The delivery channels mentioned above could someday be potential solutions to the ongoing last-mile problem. However, that doesn’t help retailers who are looking to improve their last-mile delivery today. Fortunately, that’s where destination delivery unit shipping comes in.

Using this model, a retailer’s shipping partner will transfer their products to a USPS destination delivery unit (DDU) for the last mile. These postal service facilities sort and deliver mail within a specific postal code. Because USPS vehicles deliver along predetermined routes, retailers can use this existing infrastructure to handle last-mile delivery faster and more cheaply. And if a retailer’s shipping partner has a strong relationship with the USPS, this can further help keep shipping times and costs low.

Want to find out more about how a shipping partner like OSM can help you use DDU shipping to optimize the last mile? Contact us to discuss your shipping needs and request a quote.