Last-mile delivery is a buzzword for the entire ecommerce industry that has a direct impact on customer loyalty and profitability. Let’s see how.

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If an order delivery is delayed, it can significantly impact customer satisfaction. And if a brand is paying too much in shipping costs, it can severely reduce profit margins.

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Providing a great delivery experience to customers is a constant balancing act for ecommerce brands where they have to struggle with high costs, operational inefficiencies, lack of infrastructure and more.

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Luckily, a fantastic solution enhances the delivery experience at a more early stage of the supply chain—first-mile delivery.

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In this blog, what is first-mile delivery, how it differs from last-mile delivery and tactics to improve and optimise first-mile delivery.

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What is first-mile delivery?

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First-mile delivery refers to the transportation of inventory across the first leg of the supply chain. For ecommerce businesses, first-mile delivery is the process of transporting inventory from a manufacturer or supplier’s facility to an ecommerce warehouse or multiple fulfilment centres— before orders are delivered to the customers.

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The main goal of first-mile delivery is to optimise inventory allocation based on optimal locations. So that you can receive and store inventory based on customer location and demand to increase shipping speed and reduce shipping costs.

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First-mile delivery vs last-mile delivery

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Why first-mile delivery shouldn’t be ignored?

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As the first stage of the supply chain, first-mile delivery greatly impacts the order fulfilment process. According to research, the first mile is still inefficient and lacks transparency in many ways. Inefficient first-mile delivery can have a domino effect on the entire supply chain and order fulfilment, negatively affecting last-mile delivery. This can result in slow order delivery to customers and high shipping costs.

69% of consumers are less likely to shop with a brand again if their order is delayed by more than two days. While 98.1% of consumers say that shipping (cost and speed) impacts brand loyalty.

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Let’s take a few examples,

1. If there is a delay in the production of goods by the manufacturer or the wrong inventory is delivered to the warehouse, it’s enough to disrupt the rest of your supply chain. Especially if you have to fulfil orders that depend on the next shipment of inventory delivery.
2. If you have stored your entire inventory in one warehouse located in Karnataka and you receive an order from Jammu, it will impact your entire shipping process—from order processing to delivery. And you will have to bear one of two things—slow order delivery to the customer or fast delivery by paying more on shipping cost.

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Fortunately, many issues that occur during first-mile delivery can be solved by increasing inventory visibility, distributing your fulfilment network, and executing a thorough warehouse receiving process. Let’s understand it in detail.

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How to optimise first-mile delivery?

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1. Map out your supply chain

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The first step you can take to optimise your supply chain is to map it out, starting with first-mile delivery. By going through each step of your existing supply chain, you can identify inefficiencies and the steps needed to improve the process.

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For example,

• Analyse your customer demand from historical data and determine the optimum location to store your inventory.
• Establish standard and reorder points to maintain sufficient inventory at all times to ensure uninterrupted order fulfilment.
• Re-evaluate your process for restocking inventory—if it’s manual, switch to automated replenishment.
• While restocking, consider the average time it takes to ship stock to a fulfilment centre before your inventory is depleted.

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2. Follow a definitive warehouse receiving procedure

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Creating a thorough warehouse receiving process is a must for optimising first-mile delivery. This process specifies how to receive inventory shipments delivered by your supplier while ensuring accurate inventory tracking.

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Here is an overview of receiving inventory:

• While receiving the inventory shipment, you must check if the number of boxes, pallets, or shipped units is correct. If there’s any discrepancy, record the variance between the received and expected inventory.
• Store the inventory at a designated area in your warehouse or fulfilment centre.
• Unpack the inventory and sort it based on your specific requirement— by size, colour, type, and more.
• Conduct a reconciliation count for all the order items and record any variance between received and expected order items. Contact your supplier to resolve the same and update the modified inventory count in your database.
• Store the order items on designated shelves in your warehouse or FC.

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3. Collect and monitor the right data

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To optimise your first-mile delivery effectively, you will need a system in place to collect data and report on key distribution metrics like:

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Time to ship: The time it takes for your manufacturer or supplier to ship inventory after an order is placed.

Time to stock: The time it takes to break down pallet loads and stock your inventory that’s ready to be shipped.

Transit damage rate: The number of items shipped by your manufacturer or supplier that are damaged in transit.

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You can use Inventory Management Software (IMS) or a Warehouse Management System (WMS) to monitor your data. You can also just outsource fulfilment to increase your visibility of these metrics.

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4. Use the right packaging

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Packaging plays an important role in shipping. It doesn’t matter how quickly your inventory arrives at the warehouse if most of it is damaged. So, to ensure efficient first-mile delivery, you need high-quality packaging for your inventory.

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Here are some tips:

• Use secure dunnage in each box to avoid any breakage.
• Use top and bottom load protectors so that the weight of the inventory is distributed evenly when they are stacked on top of each other.
• Use edge boards to prevent damage to corner edges and stabilise the load.
• Use stretch wrapping to stabilise the shipment in transit and prevent the inventory from shifting.

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5. Create a system for labelling

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Labelling your shipments is important to keep track of all your inventory. However, if your manufacturer or supplier labels your products differently from your warehouse, identifying your SKUs would be a huge problem—QC issues and returns. That’s why you need a unique labelling system and implement it across your supply chain.

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6. Choose a tech-enabled fulfilment partner

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It’s always an option to manage fulfilment and logistics yourself, but if you want maximum efficiency and incur less costs, you need support from an expert. For that, you can outsource your fulfilment to a tech-enabled 3PL like Eshopbox to optimise your first-mile delivery.

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• You can use Eshopbox’s superior warehousing services and store your inventory in Eshopbox’s distributed network of fulfilment centres across India—to expedite shipping speed and reduce shipping costs by up to 45%
• Eshopbox enables you to split your inventory and allocate it based on your customer demand using automation without any manual effort.
• You can get your inventory delivered directly from your manufacturer or supplier to Eshopbox’s fulfilment centres, where logistics experts will conduct a thorough inventory receiving check to ensure what was ordered matches the paperwork. If not, Eshopbox will record the variance and report it to you.
• Eshopbox also conducts quality checks to determine whether the products are in a sellable condition. You can also customise the inspection criteria based on your preference. Eshopbox moves the damaged products to a designated spot that needs to be returned to the supplier.
• Eshopbox helps you to maintain sufficient inventory at all times with proactive replenishment reminders when you’re running low on inventory. This will help you curb any manual errors in restocking inventory.
• You can use Eshopbox’s actionable dashboard that acts as an Inventory Management Software (IMS) across multiple fulfilment centres to monitor your data and have full visibility of your inventory and supply chain in real time.

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Thus, Eshopbox ensures flawless first-mile delivery.

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Bottom line

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First-mile delivery can be challenging for ecommerce businesses as it deals with different stakeholders, getting inventory on time, and fulfiling orders accurately and quickly while ensuring cost-effectiveness. It will be tricky, time-consuming and can pull you away from revenue-driving initiatives. That’s why you need a tech-enabled 3PL like Eshopbox. From receiving inventory and distributing inventory to shipping customer orders, Eshopbox offers superior fulfilment with full visibility over your ecommerce operations.