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Insights
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Last-Mile Trends and Challenges: How to Dive Deep and Not Hit The Bottom

The modern last-mile delivery industry isn’t a blue ocean in all senses. It’s rather a deep lake with dark murky waters: the deeper you dive, the more difficult to see what you should next.

There are so many trends and challenges, that you don’t know what direction to take to keep your logistics company developing, grabbing new opportunities, and simply staying up-to-date. Diving deep in all these emerging trends and burning opportunities without knowing how you’ll benefit from them may result in hitting the industry’s bottom. Many companies, unfortunately, fail to float back to the surface after taking a wrong direction.  

Of course, staying and watching how your competitors do jump in these waters is disturbing, so you still need to act. That’s why the Omnic team has prepared a detailed guide on the main last-mile delivery trends and challenges in 2023. With more than 11 years of experience in developing automation solutions for last mile, the Omnic team knows how to separate the wheat from the chaff in the logistics industry, so you can be sure that we’ll provide you only with those last-mile trends and challenges that really matter. Let’s dive in without a further ado!  

3 key supply chain trends


Last-mile delivery future trends that disrupt the industry

We’ve prepared a comprehensive guide on the most important and promising trends, so be prepared for quite long yet informative read. The key last-mile delivery trends are:

Automation

Automation in last-mile logistics is by far the biggest and hottest trend for a reason: According to the Precedence Research, the logistics industry automation market is expected to reach $152.5 billion by 2030. Automating even the most basic processes in logistics means hours of time, thousands of dollars, and millions of trees saved. However, logistics technologies behind automation of this or that process are very different from each other. Let’s take a closer look at the most prominent solutions for automation.

Logistics automation market size

Artificial intelligence

The buzz around artificial intelligence is at the deafening volume now, so it would be strange of us to ignore this trend. Smart algorithms can work as a component of various logistics software for route planning, inventory management, warehousing, and so on. Well-trained AI models are capable of more accurate and long-term decision making, which means that companies can plan their logistics strategy with greater reliability and little human involvement.

Apart from that, artificial intelligence is actually an essential component of self-driving vehicles that is another top trend for last-mile logistics today. Self-driving vehicles for parcels delivery will significantly cut your expenses on hiring human drivers.

Additionally, self-driving trucks usually are capable of optimal route planning and much safer driving which is also an important factor for the quality of logistics services. For that reason, a startup TuSimple that produces self-driving technologies for logistics trucks got invested by UPS. The United Parcel Service was looking for a self-driving solutions for its fleet, which is why the US delivery giant fired cannons of money at TuSimple. The startup grew fast enough to went public and start trading at NASDAQ. If the industry leader grants such an immense investment in self-driving vehicles, it means that the technology is not some bright future but our present reality.

All in all, artificial intelligence is a tech solution that many logistics companies nod towards. It may be expensive and somewhat difficult to implement, but long-term prospects  are fantastic beyond all doubts.

3D printing

The technology of 3D printing itself is not something new, but its application to last-mile delivery is indeed a trend today. With increasing operational costs and consumer demand, delivery of various products has become a challenge for logistics companies and retailers/e-commerce shops they work with.

That’s where connected 3D printers come into play. Imagine a consumer ordered a chessboard at Amazon. Instead of flying, sailing, and driving the product long way to the customer, the design of the chessboard is sent to an IoT 3D printer at the nearest fulfilment center where it gets printed out. In such a way, you can save time, money, and environment while customers don’t have to wait long. Beyond a doubt, smart 3D printers are not a silver bullet that will not bring logistics transformation. But having such logistics innovation at your fulfilment centers, warehouses, and dark stores of your corporate partners can unload your supply chain and attract new partners as this distribution channel is undoubtedly unique.

Self-service solutions

Automation doesn’t necessarily mean that some process becomes a subject to a software or machine’s responsibility. Enabling customers perform some of the actions also falls into category of automation as your employees experience less workload while the key processes are getting faster.

For example, Omni Drop Off by Omnic is a self-service terminal that enables customers send parcels without help of a post office operator. The device has weights and dimensional cameras to measure a parcel, so a customer just needs to enter shipping details. The device prints out a barcode that a customer has to stick on a parcel. Then, a customer leaves their package in a parcel compartment inside of the VolumeBox without waiting in line for a post office operator’s assistance.

Omni Drop Off

Drone delivery

Drones are another trend that won’t change the game but can significantly improve performance of your logistics company, especially within the realm of last-mile delivery solutions. Drones are capable of carrying parcels of small and medium size, while there is no traffic jams up in the air! As a result, you have a fast, convenient, and sustainable channel for your last-mile delivery.

In addition, drones can seriously expand you reach as you can deliver parcels by air to locations which are hard to get by driving: rural areas, urban districts with high traffic congestion, some specific spots with a complex landscape, you name it.

Notwithstanding the benefits, adopting drone delivery for your last-mile logistics is a long-term investment in a fully automated future. Drone delivery is a subject to multiple regulations by governments because flying a drone overlaps with multiple safety, privacy, ethics, and other issues that require legal control. Despite the fact that Walmart offers a fixed price of $3.99 for 10-pound parcel delivery, a McKinsey report suggests that an average drone delivery price is $13.5 as 95% of costs included account for additional technical and management activities for regulations compliance.

Even though many cities may restrict drone flights in specific areas, big companies like Shell, EasyJet, and DHL have already implemented drone delivery, so it is still a go-to (fly-to, to be more precise) last-mile logistics innovation for a modern company.

Supply chain agility

Being flexible and agile is a matter of survival for any supply chain. Constant disruptions and economic uncertainty mean that logistics companies have to be able to adjust to ever-changing conditions without losing quality and pace of performance. Around 90% of companies are planning to invest more in making their supply chains agile enough to survive constant market disruptions. Even though such adaptability should stem from management and relatable mindset of top executives, there are two major hands-on instruments that are trending in this respect:

Software-as-a-Service (SaaS)

SaaS for last-mile logistics is also a tech solution that has multiple uses. Various SaaS applications help logistics companies with planning, workload management, route planning, inventory management, demand forecasting, real-time truck monitoring, procurement, and many other operations a logistics company can’t work properly without.  

The benefit is apparent: less paperwork and involvement of human labor that company can convert into cost savings, decreased operational time, and fast decision-making that is important for keeping a logistics business afloat during such uncertain and volatile times. SaaS apps are usually easy to integrate with each other via application programming interface (API), so you’ll be able to combine several SaaS applications to speed up the processes, thereby making your logistics company more agile.

Service extension  

One of the most significant factors pushing changes within the logistics industry is the evolving expectations of customers. Accenture reports that a noteworthy 91% of companies are openly acknowledging that customers currently have a strong preference for end-to-end logistics services that are managed by a single provider. Moving beyond the traditional offerings like freight forwarding and customs brokerage, customers are extending their demands to encompass additional services such as reverse logistics, e-commerce management, and the ability to harness analytical capabilities.

Fifth-Party Logistics (5PL) partners are like the secret weapon that businesses are turning to. As supply chains get all tangled up in complexity, the 5PL companies have stepped up their game to keep up. They take charge of a client's every logistical whim. 5PL providers start by figuring out exactly what's needed, then they dive into planning, pulling off the whole shebang, and keeping it all in check. But that's not all — these 5PLs have enough knowledge to round up and wrangle other suppliers along the supply chain.

5PL logistics

In a nutshell, 5PLs are like the Swiss Army knives of logistics, tackling it all and making sure everything's on track. With the year 2023 throwing even more curveballs at supply chains, 5PL logisticians are about to shine brighter than ever before by making the entire supply chain truly agile.

E-commerce rise

Well, it’s an obvious last-mile logistics transformation trend, but we would like to underline its importance. According to G2, e-commerce sales are rising to $6.4 trillion by 2024, which means the help of your logistics company is still badly needed.

But what are the implications for you? Your company is going to meet a huge demand, so meeting this demand with no hassle and little cost for consumers is your watershed moment we recommend you to capitalize on and capture a lion’s share of the target audience. Think about ways to reduce costs and make delivery as comfortable as possible for e-commerce orders. There are dozens of business models to adopt for effective integration with e-commerce platforms, but make sure you chose an understandable and transparent one.

Turn these last-mile delivery challenges into opportunities

Speaking about last-mile delivery future challenges , we would like to recommend you to think about them as invitations to improve relatable aspects of your company. As a result, meeting the following logistics problems will help you to surf the wave of modern last-mile logistics as you know how to solve problems the other companies feel helpless to cope with.

Raising costs

Expenses on hiring and training employees and delivery are the main concerns. Economic instability on global scale makes transportation costly while consumers expect to have low or no fees for shipping their online purchases. That’s why logistics companies need to find ways of cutting costs or covering them with additional streams of revenue.

Supply chain visibility

Lack of transparency within a supply chain is still a serious logistics issue. Apart from a poor connection between different legs of a supply chain, the situation also gets worse from the side of the customers. Being able to see where and when a parcel is going, preferably in real time, is an option that consumers already perceive as a must rather than a nice-to-have privilege. Such circumstances put logistics companies under additional strain and push hard to build solutions that enable transparency and interactivity with consumers.

Fierce competition

Because of the logistics future trends and challenges mentioned above, competition is getting vice as never. Logisticians are in a constant search for ways how they can differentiate and beat their rivals, which means you have no choice but join the brawl.

Labor shortage

Freight Waves reports that talent shortage is the main concern for 56% of logistics companies and 57% confirm that retaining and upskilling their employees is also a burden they find difficult to carry recently. The matter is that the demand on logistics services keeps ballooning while technology plays an ambiguous role. Needless to say, automation of the basic processes reduces a need for a human labor, but implementation of other technologies requires presence of skilled and tech-savvy workers.

Jump into murky waters of last-mile trends together with Omnic

Last-mile delivery future trends and challenges in 2023 are apparently confusing, so chances to make a wrong decision is high. The one thing is certain: almost any trend or challenge means adoption of a robust last-mile delivery technology to gain a particular long-term advantages.

Omnic has a vast experience in identifying and adopting technologies that enable logistics companies pursue their most ambitious goals. Our products have 99.2% rate of the service-level agreement (SLA), and our R&D department has registered 45 patents in various countries.

Don't miss out on the chance to seize the current opportunities and conquer challenges in the dynamic world of last-mile logistics. Let's navigate the future of last-mile together — reach out now to get laser-focused at your success!

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Developing innovative self-service solutions

If you have any queries or require further details, simply fill out the contact form and our specialist will get back to you.

Julia Lockman

Chief Business Developer Officer

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