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Final Mile Kuebix

The High Costs of Final-Mile Delivery

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The final mile of delivery is said to be the most expensive portion of the equation. BI Intelligence equates the share of the total cost of shipping for the last mile at 53 percent of delivery costs overall.

It is costly because it has a larger human element than the other segments of transportation with drivers going door-to-door to drop off packages. In an urban environment, the distance between deliveries can be a couple of flights of stairs, but in a rural scenario, drivers may have to drive miles and miles before they get to their next drop-off point.

If the last-mile delivery experience is poor, such as a package arrives damaged or is left out in the rain, then this can have a negative impact on a company’s brand. Sometimes deliveries have to be made several times because the recipient was not at home and the delivery requires a signature; this hikes up the delivery costs even more.

In some instances, the final mile delivery is the first personal contact between the consumer and the product. If the delivery is poor, then the brand is affected. Was the driver late? Is the packaging damaged? Was the delivery person rude? With customer expectations so high, a lot is at stake if a delivery goes awry.

The last-mile is expensive, inefficient and risky (for a firm’s reputation) – yet people want that “Amazon Experience” where they can track their package via a mobile phone app, with alerts if the package will be delayed and notices when a package has arrived. This type of transparency requires visibility and real-time tracking of orders.

Says Business Insider, “The costs and inefficiencies of the last mile problem have only been further compounded by the continuous rise of e-commerce in US retail sales, which has dramatically increased the number of parcels delivered each day, as well as raised customer expectations to include not just fast, but also free, delivery.” In other words, the issues surrounding the last mile are not going away.

So, what can you do?

Companies can ensure that their organization has complete visibility to any delivery delays, exceptions or missed appointments with the use of technology. Whether a company is delivering to a residence or business; utilizing owner operators or asset-based fleets; or is delivering a unique one-time shipment with a rate from the spot market, a transportation management system can help.

Kuebix Global Network Effect

Kuebix and The Network Effect

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Following Kuebix’s announcement last week of reaching 10,000 companies using Kuebix TMS, industry analyst Adrian Gonzalez wrote in his newsletter Talking Logistics: “At the time, Kuebix expected tens of thousands of shippers to take advantage of this free technology, building a massive global community where Kuebix can efficiently help the industry match capacity to demand across supply chains. Reaching that critical mass will be a challenge, I said last October, but it’s a challenge worth pursuing if you believe in the power of networks and communities. Well, it appears that Kuebix has met this challenge. The question now is how will the company leverage this growing community to drive ‘network effect’ solutions and value?”

What exactly is the ‘network effect’ Adrian is talking about?

He first wrote about this concept in 2003 when he discussed that “Supply Chain Operating Networks bring together trading partner connectivity with software-as-a-service applications.” Think Facebook or LinkedIn where people or businesses are connected together. The more connections, the better the network. All participants on the network can be connected to each other through the network for improved collaboration and communications. Basically, the more users, the more value the users get from the network.

When users connect to a network, they are empowered to create new value, and as more value is added to the network, users become more valuable. The ‘network effect’ means that participants on the network are more valuable to everyone on the network. Electronically connecting to suppliers, customers, and other supply chain partners enables each business to collaborate and innovate. Fully leveraging these connections allows suppliers to collaborate on forecasts and demand; customers to collaborate on inventory and forecasts; while others can collaborate on shipments and delivery requirements.

Networks are built with technology, but ultimately the network is about people: why they want to connect, how they will connect, when they will connect, and what they want to get from the connection. The ‘network effect’ grows exponentially in value the denser the network becomes. The more trading partners that are connected, the more valuable the network is – provided the connections participate and collaborate with others on the network. The ‘network effect’ is a supply chain game-changer.

With a global logistics network there is an increase of collaborative opportunities as the number of network participants increases. In this time of driver shortage, hours of service regulations, and capacity shortages, shippers are finding it hard to make deliveries. Using a global logistics network, shippers can forecast with their carriers that are connected to the network, who will then translate this into a volume by lane schedule in order to get capacity for shipping their products. The value of a network increases as more companies with shipping needs and an increased number of trucking operators carrying cargo join the network.

The rapid growth of Kuebix’s global shipping community lends credence to the industry’s need for a network where shippers can collaborate with each other, suppliers and carriers. Leveraging the power of a global network unified by the power of technology, freight can be matched to available capacity. This helps to fill empty backhauls, maintain control over demand peaks and reduce freight spend all around. Based on the accelerated adoption of Kuebix TMS within the industry, the ‘network effect’ is proving to drive value for companies wishing to optimize their freight.

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