Author Name: Fan Wong – Marketing Analyst at FreightAmigo｜15/9/2022
Importance of last mile delivery
The key to winning the trust of consumers for e-commerce merchants is the process of delivering goods from the warehouse to the hands of consumers through express delivery specialists or trucks, which is generally called “last mile delivery”. Every link in the process, from the efficiency, transparency, and the customized way of receiving goods, has a profound impact on the consumer experience.
Challenges encountered by e-commerce merchants
However, as an e-commerce merchant, the last mile distribution also needs to face a number of logistics challenges:
1. High delivery cost
Researchers at Mordor intelligence PVT Ltd found that even though the last mile delivery is often shorter than procurement (e-commerce must first wholesale the goods by air freight or sea freight before delivery to the warehouse – the term procurement or purchase refers to this process), the cost can be as high as 53% due to the scattered locations.
In addition, e-commerce merchants are also bound to face various transportation risks, such as express delivery returns caused by customers’ delay in picking up goods or even exceeding the time limit for picking up goods, which not only makes e-commerce unprofitable, but also doubles its transportation costs.
Even if e-commerce builds its own logistics fleet to imitate large-scale e-commerce such as JD.com, the resulting series of personnel costs and vehicle maintenance costs are not affordable to ordinary SMEs.
2. The lack of transparency
In the case of last mile deliveries, customers hope to quickly query the status of goods by inputting the tracking number, so that they will fully understand how the delivery is proceeding. This includes the current location of the driver and the exact time of delivery of goods. However, traditional logistics are having a hard time with this at the moment.
3. Limited efficiency
In order to win the trust of consumers, e-commerce must maintain high logistics efficiency. However, at present, most of the traditional logistics need to collect goods as consolidation first and then transfer them. Typically, it takes 1-2 days for the goods to be delivered to the customer, which will not accommodate the needs of those who need the goods quickly.
4. Different transport quality
In the last mile of commodity distribution, nearly 50% of customers will have customized requirements, such as specifying the time and method of receiving goods (such as delivering the goods to the door keeper, delivering them before 7am, etc.). When logistics issues (such as customer complaints and delayed delivery) arise as a result of failing to meet the customized requirements, it will distract the merchants, and hinder the development of their main business.
The advantages of logistics outsourcing
The advantage of third-party logistics (1): Cost Saving
In recent years, logistics outsourcing has become a trend in e-commerce. In order to reduce transport costs and risks and focus on developing their core businesses, many SMEs often entrust third-party logistics (3PL) companies. On the one hand, professional services such as AI planning and digital freight documents of new logistics companies can save a lot of costs for enterprises to invest in logistics fleets; On the other hand, logistics outsourcing also avoids the costly commitment and risk transfer when SMEs pay for logistics services.
The advantage of third-party logistics (2): Track from Time to Time
In view of the lack of transparency in the transportation process of traditional logistics companies, some new logistics companies, through powerful FreighTech such as digitization, can enable customers to track orders with mobile apps anytime and anywhere, including the current location of drivers or riders and the accurate time of arrival of freight. At the same time, they can also receive updates on the progress of orders and delivery time. High transparency and convenience attract more customers beyond the shadow of a doubt.
The advantage of third-party logistics (3): High Efficiency
The new third-party logistics company is different from the traditional logistics company in terms of centralized transportation. By using FreighTech, you can obtain an instant quote for delivery and insurance by placing an order with a single keystroke, which greatly reduces the waiting time for your customer.
The advantage of third-party logistics (4): Focus on the Development of Core Business
Nearly 80% of enterprises said it was challenging to meet the customized requirements of customers. By outsourcing to a third-party logistics company, enterprises do not need to worry too much about logistics problems. This reduces their concern, and thus they can concentrate on developing their core business.
FreightAmigo: AmiGo post, your helper for ecommerce logistics
Unlike other third-party logistics companies, FreightAmigo attaches the utmost importance to the rights and interests of e-commerce and consumers. Therefore, you can enjoy our services without the need to entrust transportation by contract. In order to solve the problems caused by above-mentioned traditional logistics, we use FreightTech and FinTech, such as artificial intelligence and big data, to provide a one-stop supply chain platform. Our Amigo Post can not only save your company up to 80% of freight costs, but also reduce 99% of carbon emissions through route optimization and promote sustainable development. While customers enjoy the best service anytime and anywhere, they also make contributions to the environment!
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