In this article, we’ll delve into the future of last-mile delivery and the trends in 2023. The last mile is the final stage of delivery, where packages are transported from a transportation hub to the end customer.
With online shopping on the rise, the demand for efficient last-mile solutions is also increasing. We’ll explore how technology is transforming delivery methods and how to address the industry’s challenges.
Our goal is to give a clear overview of the industry trends in the coming year.
The Promising Future of Last-Mile Delivery Innovations
The last mile of delivery, from a warehouse or distribution center to the customer’s address, is a tricky part of logistics. Experts say last-mile delivery can make up 25 to 50 percent of transportation expenses.
Various trends impact the future of delivery in 2023. One of them is the growing use of technology for better efficiency, cost savings, and customer experience. Companies will also look for ways to reduce their carbon footprint through clean technologies. Safety and security of deliveries will be a priority, especially during the ongoing pandemic.
Top 13 Last-Mile Delivery Innovations and Trends in 2023
Here are thirteen last-mile innovations and trends you can look forward to in 2023.
1. Integration of Various Delivery Methods
Many retailers now use a hybrid delivery model that combines their fleet with third-party providers and crowdsourced delivery options. This gives retailers more control and flexibility over their last-mile delivery operations.
To manage a hybrid fleet model, retailers need specific last-mile delivery technology. It must provide a centralized dashboard for optimizing routes, monitoring vehicle location, and receiving delivery updates.
By using a hybrid model, retailers can reduce costs and enhance customer experience. However, managing a hybrid fleet model is challenging, and many companies still rely on third-party logistics providers.
A good example is Amazon’s use of its fleet of delivery vehicles and third-party providers to deliver products.
2. In-House Shipping Carriers
At the same time, businesses are expected to keep their logistics in-house rather than relying on 3PLs. Companies are starting to invest in their fleet and offer secure local delivery services to customers. Hence, retailers are looking to hire local drivers who can deliver reliable results.
By handling everything internally, retailers control costs and the delivery experience better. This approach will generate more revenue streams and greater profits for businesses.
For instance, American Eagle’s logistics company, Quiet Platforms, is expanding its fulfillment centers nationwide to provide faster delivery services. They are working with a real estate brokerage company, JLL, to open more advanced fulfillment centers at a lower cost quickly.
3. The Use of Data Analytics
Last-mile delivery trends are constantly evolving, and one of the growing trends is the use of big data. As businesses improve their delivery efficiency and customer experience, they use data analytics to gain insights. These insights look at customer behavior, predict demand, and anticipate future trends. As a result, they reduce delivery times and provide a more personalized purchase experience.
The food delivery industry has fully embraced this innovation, and other industries will soon follow suit. Data-driven decisions heavily influence the future of last-mile delivery, and businesses can drive more sales by using this trend.
An example is Amazon, which uses predictive analytics to recommend products to customers based on their purchase history and browsing behavior. That way, they are more likely to purchase a product.
4. Urban Warehousing
The rise of urban warehousing is also shaping the future of last-mile delivery. As customers demand same-day delivery options, businesses seek ways to minimize transit time and enhance the delivery experience.
By locating warehouses in urban areas, companies reduce the distance between customers and warehouses, thus improving delivery speed and efficiency. This approach enhances the customer experience and increases the efficiency of in-house teams by reducing the burden on them.
Urban warehousing is most relevant for e-commerce businesses and logistics companies looking to optimize their delivery process.
Check out our guide on reverse logistics.
5. Real-Time Tracking Technology
Real-time tracking technology is becoming a key trend in the last-mile delivery industry. Businesses build trust with their customers by providing real-time updates on the delivery process.
Customers feel more in control of their delivery as businesses improve their logistics through advanced technology.
Companies use real-time tracking to optimize routes, reduce delivery times, and improve efficiency. For example, Amazon’s delivery service, Amazon Logistics, offers real-time monitoring so customers can track their orders from start to finish.
As a result, customers are up to date with their delivery status and can plan accordingly.
6. 24/7 Delivery with Autonomous Vehicles
With the development of self-driving cars and drones, businesses aren’t affected by human labor shortages. They no longer determine shipping times. The use of autonomous vehicles could mean that 24/7 delivery becomes a reality. However, there are still many gray areas regarding this technology’s regulations and rules.
Nevertheless, companies like Amazon have invested heavily in self-driving cars and delivery drones and are currently testing these technologies. An example is the Amazon Scout delivery drone, which debuted in 2019 and has undergone trials as recently as 2020.
7. Green Logistics
Companies are placing more emphasis on green logistics and implementing environmentally friendly last-mile delivery technologies. This innovation addresses the environmental impact of transportation and logistics.
Businesses are investing in electric delivery vehicles, such as BrightDrop, General Motors’ EV branch, forecasting $1 billion in revenue for 2023. Many major companies, such as Walmart, FedEx, and Verizon, have already placed orders for these vehicles.
Additionally, USPS is shifting towards electric vehicles and investing $9.6 billion in 106,000 advanced delivery vehicles. After 2026, they will only purchase EVs. This shift towards electric cars and the building of EV charging infrastructure will make last-mile deliveries more sustainable for companies.
8. Large and Heavy Item Delivery
Another trend is the growing demand for the delivery of large and heavy items, such as furniture and home goods. Traditional logistics companies may not be equipped to handle these types of deliveries, forcing businesses to expand their delivery capabilities.
A good example is the partnership between Wayfair and XPO Logistics, offering last-mile delivery services for furniture. Wayfair gets to expand its delivery offerings and better serve its customers. XPO Logistics taps into a new market and generates more revenue.
9. Drone Delivery
The use of drones for last-mile delivery is becoming more relevant as technology improves and regulations catch up. Drones can transform the delivery industry, quickly transporting goods to even the most remote locations.
One example is Walmart, which uses drones for deliveries and plans to expand to more stores. With the ability to reach customers in less time, drones could significantly improve the customer experience and increase business efficiency.
10. Automated Last-Mile Delivery Management Platforms
Last-mile delivery management platforms automate and improve delivery planning, orchestration, and optimization processes. Companies can leverage their fleet as well as third-party logistics partners.
Walmart has completed over 6,000 drone deliveries within 30 minutes or less. It also plans on using its 4,700 stores as delivery hubs. By addressing last-mile industry challenges with innovative solutions, companies achieve greater agility across their entire delivery network. Eventually, this leads to higher profits.
11. Route Planning and Optimization Software
Route planning and optimization software help businesses streamline their delivery processes, achieve quick deliveries, and improve overall efficiency. It is vital for companies that rely on many deliveries, as it minimizes delivery times.
This technology also reduces costs by minimizing fuel consumption and the number of vehicles needed for deliveries.
For example, a retail company that receives a high volume of online orders will use route planning and optimization software to complete all the deliveries. Route planning and optimization software help adapt to traffic, weather conditions, and other factors.
12. Contactless Delivery
Contactless deliveries are becoming more relevant as businesses adapt to the new normal post-pandemic. Customers are now more conscious about their safety and want companies to take necessary precautions during deliveries.
Businesses adapt to this trend by implementing contactless proof of deliveries, which is done through digital signatures or other contactless methods.
A company that adapted to this trend is Uber, which has introduced contactless delivery options to customers for a while now. These options allow customers to choose a delivery method best suits their needs and preferences.
13. Omnichannel Retailing
Omnichannel retailing is becoming more popular as customers expect a seamless shopping experience across multiple channels. Businesses integrate various sales channels, like phones and physical stores, to provide a convenient customer shopping experience.
Amazon allows customers to purchase products online or pick them up at a nearby physical store. There is even an option to return them to a store instead of mailing them back.
In 2023, we will see a surge in omnichannel retailing as businesses meet customer demands and stay competitive.
Here’s everything you need to know about omnichannel third-party logistics.
How Dropoff Can Help with Last-Mile Deliveries
Urban warehousing, real-time tracking, autonomous vehicles, sustainable delivery methods, and the list goes on. The last-mile delivery industry is undergoing major changes to improve the customer experience and streamline logistics operations. This year, businesses must stay informed of these trends and invest in innovative solutions to keep up with the competition.
At Dropoff, we are at the forefront of these changes and are dedicated to providing the best last-mile delivery services. Our team stays informed of the latest trends in last-mile delivery, allowing us to offer cutting-edge solutions for everyone.
Whether you are a small or large business, we have the resources and expertise to meet your delivery needs.
Talk with a Dropoff expert today and stay ahead of the competition.
FAQs on Last-Mile Delivery Innovations and Trends
Customers prefer fast delivery when choosing between services that offer the same products and prices. Same-day delivery used to be a luxury, but technological improvements have made it more common in the industry.
Last-mile delivery operations can be improved by:
– Real-time tracking
– Implementing route optimization technology
– Offering multiple delivery options
– Utilizing a network of local partners
– Providing clear customer communication
Customers care most about speed, timeliness, accuracy, and precision in the last-mile delivery of products.