Overcoming Issues in Last Mile Delivery to Improve Consumer Driven Logistics

Last mile logistics is the last leg of the supply chain, where the final delivery is made to the customer’s doorstep. This last mile delivery from the warehouse to the customer’s door is known to be the costliest and least efficient part of the entire supply chain process. This thesis will discuss why it is so by taking a deeper look into the main issues faced and the key performance indicators in the last mile delivery to finally propose the best solution. The main reason causing the last mile to be inefficient and so expensive is the failure to deliver orders from the first attempt and then reattempting to deliver them another time. 6% of deliveries fail on their first attempt, with a single failed delivery costing the company around $17. The most common reason for a delivery failure as it will be seen later on is the customers’ unavailability at the delivery address. Several other issues will also be discussed such as damaged/lost deliveries. E-commerce was increasing on a steady rate until the Covi-19 outbreak which accelerated the growth of retail e-commerce 6 years in advance. The pandemic changed the consumer’s purchasing habits, as more people started shopping online, which increased the total number of online orders and hence forced last mile companies to increase their capacity by hiring more delivery drivers and buying extra delivery vehicles. This increase of delivery vehicles on the road increased the greenhouse gas emissions as well as traffic congestions in cities, which raised a lot of concern. The leading companies in retail, e-commerce and last mile however are aware of the environmental impact and have a plan to reduce their carbon emission by converting all their traditional delivery vehicles into electrical ones. This is a good idea, but not the optimal one, as vehicle electrification will only reduce the emissions and not traffic congestion nor failed, damaged or lost deliveries. The optimal solution that will be discussed more in detail later on in this thesis is the installation of open parcel lockers which will help decrease the cost and increase the efficiency of the last mile by solving all the main issues often encountered.