Last mile logistics: what it is and how it works

  • 20/06/2024
  • 19 minutes

The order picking and the last mile are critical stages in the logistics process as they directly affect business costs and final customer satisfaction. This happens because they ensure that goods are delivered accurately and within the agreed-upon timeframe, including to hard-to-reach locations and those with different regulations.

In general, last mile refers to the final logistical stretch, the most expensive segment which encompasses issues like delays and mismatches with the customer. Therefore, it is important that you understand the topic to ensure a more predictable, safe, on-time delivery and a smooth internal operation. Keep reading.

What is last mile in logistics?

Last mile describes the last stage of the product distribution chain. It involves delivering the goods from the distribution center to the destination, which is usually the end customer.

This phase can be the most challenging and costly in terms of logistics because it involves the delivery of goods in dense urban areas with heavy traffic. In addition, it is necessary to have speed and precision to maximize consumer satisfaction.

This is why many logistics companies are investing in advanced technologies such as autonomous robots and electric vehicles, as well as in the digitization of logistics processes. In addition to increasing agility in delivery, these innovations also make it more efficient and sustainable.

Last mile success is crucial to a company’s reputation. An unsuccessful delivery, for example, can lead to delays, additional costs, damage to products, or a need for re-delivery. On the other hand, successful delivery can lead to positive reviews and increased customer loyalty.

Last mile example

A practical example of the last mile in logistics is the process of delivering online purchases. When a customer makes a purchase on an e-commerce website, the responsible company needs to plan and execute the delivery of the product to the customer’s address.

In practice, logistics companies use routing technologies, real-time tracking, and mobile applications to optimize the delivery process and minimize failures. Currently, the transportation area is undergoing major transformations, a phenomenon popularly called logistics 4.0.

It’s also important for them to have a well-trained and equipped team of delivery personnel to handle the challenges of the last mile, such as traffic, narrow streets, security, and interaction with customers.

Differences between first mile and last mile

First mile refers to the initial stage of the transportation and logistics process. Here the supplier’s or manufacturer’s products are collected, which are taken to the distribution center or warehouse. It is at this stage that the goods are collected and prepared for mass transport, usually in large volumes.

In practice, this involves measures such as:

  • picking;
  • packing;
  • labeling;
  • loading.

During the first mile, the logistics company needs to deal with various challenges, such as ensuring the availability and quality of products, managing the supply chain, handling regulatory issues like documentation and fees, and ensuring the integrity of the products during transportation.

To optimize the first mile, logistics companies can adopt different technologies such as temperature and humidity monitoring sensors, fleet tracking and management systems, and applications for order management and communication with suppliers.

In addition, collaboration and partnership with suppliers can be key to ensuring an efficient supply chain and quality delivery to customers.

While the first mile deals with large-scale transportation, focusing on efficiency and cost reduction, the last mile is more focused on the customer experience, with an emphasis on speed, convenience, and accuracy of delivery.

These two stages are fundamental to the success of the supply chain and logistics, and their performance significantly affects customer satisfaction and the profitability of the company.

It is also important to know the concept of middle mile, which consists of transporting the product from its point of origin to the distribution center. Here the most suitable modal must be chosen and define a more optimized route.

What is the link between logistics and last mile order picking?

Order picking occurs at the beginning of the supply chain, when logistics companies receive products and sort them according to customers’ purchase orders. After that, orders are prepared and sent to the middle mile, where the last mile will take place.

Having efficiency in picking positively impacts the last mile, as a poorly done separation can completely invalidate the rest of the transport. For example, if a product is incorrectly picked by the company responsible for picking, it’s possible that a different product from the one requested is sent, or it may reach the wrong customer.

Consequently, it will be necessary to spend more time and resources to correct this error. Efficient order picking processes are required to avoid this situation. For this purpose, businesses can rely on innovations such as barcode scanners and automatic labeling, as well as a trained team to handle challenges in the process.

How long does the last mile take?

The time required for the last mile in logistics can vary significantly. This depends on several factors, such as:

  • the type of product being delivered;
  • the distance between the distribution center;
  • place of final destination;
  • time of day;
  • traffic conditions; among others.

In urban areas, the last mile can take anywhere from a few hours to a full day to complete, especially at peak traffic times and when it’s most congested.

As for rural or remote areas, this step typically takes longer, as routes can be more difficult and delivery people may face obstacles such as poor roads or rough terrain.

Another aspect that affects speed is the logistics company’s policies and agreements with customers regarding deadlines. Some companies may offer express last mile services that ensure faster deliveries, while others may have more flexible deadlines.

The last mile in foreign trade

There are certain peculiarities in the last mile if the delivery operation involves foreign trade, that is, the goods come from or will be delivered in another country. In this case, imported goods are taken to final customers after the completion of customs procedures and the release of these goods by regulatory agencies.

Dealing with regulations and customs issues is a critical process that involves a number of challenges and complexities. In addition, it is important for logistics companies to address cultural differences and language barriers.

Let’s assume that customers import technology equipment from China. In general, the Federal Revenue of Brazil (RFB) is the maximum authority in customs inspection. It creates regulations and oversees the entire process of receiving these goods. Thus, this body can allow or prevent the entry and exit of goods.

To facilitate the last mile in foreign trade, logistics companies often work with local partners who have detailed knowledge of regulations and transportation infrastructure in the delivery region.

However, there are still other bodies that may require additional documents depending on the type of product being transported, such as:

  • Agência Nacional de Vigilância Sanitária [National Health Surveillance Agency] (ANVISA);
  • Ministry of Agriculture, Livestock and Supply (MAPA);
  • National Institute of Metrology, Quality and Technology (INMETRO);

In this case, you must have a committed company that is an authority in the market, that has partnerships and a highly specialized staff.

If it offers integrated solutions for domestic logistics and foreign trade chain, it can be even more advantageous. This indicates that they utilize cutting-edge technologies to modernize customs processes, as well as perform customs management and operational controls, and take advantage of special customs regimes if applicable.

Proactive communication with customers is also key to ensuring successful delivery, especially in cases of delays or documentation issues.

In summary, the last mile in foreign trade is a complex process that requires a careful and adaptable approach to ensure the successful delivery of goods to end customers. Given the complexity of the subject, it is important to delegate this activity to a specialized organization

How to avoid the logistics order picking risks present in the last mile?

To avoid the risks in the last mile (such as delays, errors, wrong deliveries, etc.), there are certain measures that logistics companies must adopt. In general, they aim to ensure efficiency and safety in the process, see what they are:

  • using real-time tracking: The use of real-time tracking technologies, such as GPS and RFID, can help monitor the status of deliveries and the location of vehicles in real-time. This provides better visibility and transparency of the process, aiding in identifying potential issues and taking preventive measures.
  • Train and empower employees: Employees involved in the last mile process should be properly trained and equipped to handle the various situations that may arise during the delivery process. This includes training in product handling and safety, as well as customer service techniques.
  • adopt efficient processes: have efficient product storage and handling processes to avoid damage and loss of products during the last mile process;
  • use cargo insurance: the adoption of cargo insurance  can protect logistics companies against loss or damage to products during the last mile process;
  • establish strategic partnerships: Forge strategic partnerships with local companies to assist in the last mile process, especially in areas where regulations are complex or transportation infrastructure is limited;

How does a strategic partner contribute to order picking, logistics, and last mile?

Order picking and last mile are two of the most critical steps in the maritime logistics process. Having a specialized partner in this type of transportation can be crucial for handling both order picking and the last mile.

This type of company has the necessary experience and knowledge to ensure that cargoes are delivered efficiently and safely.

A good partner can help streamline these processes by ensuring that products are separated and delivered quickly and efficiently. This organization will also have the necessary expertise to handle the specific logistical challenges of maritime transportation, such as coordination at ports and customs authorities, containerized cargo management, and troubleshooting during transportation.

Before making your choice and closing a partnership, it is important to analyze some aspects. The first one is the company’s experience. Also, study its history and mission, meaning the path it has taken up to the present and the long-term goal it aims to achieve. This is relevant because you can understand the company’s trajectory and assess whether it is aligned with your own values and goals. 

Among other aspects that need to be considered are:

  • maritime agency: Look for whether the company offers this service, which handles procedures and documentation in maritime transportation – it can be commercial or operational.
  • your partnerships: Inquire if they have partnerships to ensure that a comprehensive service is delivered to your business.
  • infrastructure: analyze its logistics centers, tugboats, shipyards, offshore support bases, vessels, among others;
  • degree of innovation: check if it uses technologies to ensure better communication, efficiency;
  • quality of service: contact the company to see if they answer your questions faster;
  • complementary services: check what other services are offered to meet your needs;
  • sustainability: research your degree of commitment to sustainable development.

Both order picking logistics and the last mile need to be meticulously worked on so that your business can achieve the best results and satisfy your customers. But the process is more complex than many imagine, which makes it crucial for you to rely on a partner with extensive knowledge and experience to assist you in all stages.Do you want to know what technological resources are applied in the maritime sector? Deepen your knowledge in logistics 4.0.