Why Last Mile Delivery Software Solutions is A Growing Business

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Market for Same Day Last Mile Delivery

Many brick-and-mortar companies as well as e-retailers are scrambling to offer same day last mile delivery software solutions. While same-day shipping is attractive to consumers, less than 3% will pay the current fees. As Mark Magill, vice president of business development at OnTrac, noted, “Same day is still rare. Out of a million packages, less than 50 packages are shipped same day. Consumers are still willing to wait rather than pay a lot more for same day.”

A 2013 survey of online shoppers by research company comScore showed 92% were willing to wait four or more days for free delivery. The shoppers surveyed said that they chose the most economical shipping option three times out of four and the fastest option only 1% of the time.

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Consumer Preferences are Changing the Face of E-Commerce

The big e-commerce platforms and bricks-and-mortar retailers wanting a piece of the online shopping revenues pie started out with large distribution centers having more than 1 million square feet of space. Such large centers could only be located in smaller towns, far from the suburbs of major cities. However, as the online shopping model grew in size, customers started demanding faster delivery with lower shipping costs. Now, retailers prefer distribution centers that are closer to the consumers in major cities as well as in smaller towns. However, the shift from the enormous distribution centers beyond the suburbs to so-called “mini distribution centers” will take time.

Crossing the 'Last Mile' - 2013 Skoll World Forum

Small Businesses Provide New Options for Last Mile Delivery

Nowadays, consumers who are opting for online shopping tend to do so after coming home from work, and hence prefer a next-day delivery to same-day delivery. Consumers also prefer to be able to set the time and place of delivery. Small businesses are partnering with retailers; they are receiving shipments on the consumer’s behalf, and then shipping the parcel to the consumer at a time of his or her choosing.

Small businesses are also giving e-retailers an option of on-site storage, similar to P.O. boxes. They are offering a facility with mail boxes, where clients who sign up can pick up their deliveries at their convenience. This is particularly useful for customers who travel a lot, and are unable to receive their deliveries at home.

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New Business Models are Emerging

Some companies offering logistics software solutions are partnering with companies providing point-to-point delivery in order to expand their customer base and enhance their logistics solutions. There is clearly a niche for same day last mile delivery solutions, especially when it comes to local deliveries.

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