Last mile delivery’ is the term for a common logistics problem. It relates to the disproportionate costs incurred during the final miles of a product’s journey from the warehouse to the consumers’ doorstep, compared to the relatively cost-effective transportation of the goods over long distances, usually from overseas. Why is last mile delivery a problem? It’s just a matter of scale, due to the low volumes of goods being delivered in the last mile or so of a delivery and factoring in the difficulty of navigating directly to each customer, both in rural and urban areas.

Last mile compounds about 53% of the overall package cost due to the reduction in scalability. When you order from a store or a web based service, your order will be one of hundreds, indeed thousands processed on a daily basis and is shipped via articulated lorry, shipping container, aircraft etc.

As it gets closer to its delivery point, the mode and size of transport changes which still incurs the same overheads but with a much higher impact on the delivery.

One driver driving 5,000 parcels in a lorry, is paid slightly more than the driver driving a Ford Transit, but the cost per parcel ratio reduces from 5000 to 1 to 70 to 1, so the cost actually increases on the final delivery.

So how does efficiency come into it, and why would you choose a company like Hail?

Look at Amazon, Hermes, DPD etc and you will note the final journey is the same as you normally have “white van man” delivering irrespective of the signage on the vehicle. Now an average Ford Transit van can probably hold 250 parcels, but due to traffic congestion, and parking limitations, the maximum deliveries per day are about 60-70.

So why do Hail operate in this market and what is the value to the customer?

  1. We operate strictly in a last mile environment, so high urban areas such as a city or town centre is much easier to negotiate than a van.
  2. These areas are now locked to 20mph so we compete much closer than you think using route optimisation software allowing us to go point to point, rather than main roads
  3. We can deliver right up to the door, as our vehicles are only 2.5mtrs long and 1mtr wide.
  4. Trials in Oxford, London, Coventry, and Bristol has proven we are 60% faster than vans operating in this area. We may carry less, but operating with local hubs, we cover the area much quicker as we can use cycle and bus lanes, as well as pedestrian areas, and even canal towpaths!
  5. With more consumers choosing to shop online and next/same day deliveries becoming the norm, businesses are under increasing pressure to deliver their goods faster. Firms which fail to deliver on time risk damaging their reputation and can lead their customers to shop elsewhere – with 55% of consumers stating that they won’t reorder from a website where they had a bad delivery experience.
  6. It’s also important for retailers to provide consumers with multiple delivery options which they can choose from, as they can select the option which is convenient for them. By providing customers with various delivery options, they’re more likely to reorder from the same company. We offer next day, same day and same hour when required.
  7. The rise of crowdsourcing and ‘gig economy’ applications, which allows organizations to outsource services using short-term contracts, has revolutionized the delivery industry; by allowing smaller retailers and restaurants to source couriers through crowdsourcing applications, using them to make their deliveries. Meaning that they can provide next and same day delivery which has, in turn, diversified the catalogue of restaurants and stores that consumers can choose from.
  8. Businesses such as Just Eats, UberEats and Amazon Flex are some of the biggest courier services which businesses can use. However, small to medium-sized firms benefit most from using these services, as they can compete with larger retailer’s rapid delivery times; without having an army of employees to make deliveries around the clock. We do this by attracting staff that work on flexible contracts that suit their lifestyle. Not everybody wants to work 40 hours a week from 8 till 5, and some also want to work earlier or later in the evening to suit their needs.
  9. We only operate emission free vehicles, so by choosing our service, the impact to the environment is minimal. Our e-assisted trikes run off lithium batteries, and the weight of our vehicles do impact the road surface at all. Compare that to a diesel van, that is parked half on and off a pavement, creating a hazard for other road users and pedestrians, whilst spewing out harmful fumes.
  10. We use the latest route optimisation software which gives you upfront and transparent pricing

So I hope this explains the cost, and how a chat with Hail could save you time, money and the planet!

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