Last mile is a term used in supply chain management and transportation planning to describe the movement of people and goods from a transportation hub to a final destination. "Last mile" was adopted from the telecommunications industry which faced difficulty connecting individual homes to the main telecommunications network. Similarly, in supply chain management last mile describes the difficulty in transporting people and packages from hubs to final destinations. Last mile delivery is an increasingly studied field as the number of business to consumer (b2c) deliveries grow especially from e-commerce companies in freight transportation, and ride sharing companies in personal transportation. Some challenges of last mile delivery include minimizing cost, ensuring transparency, increasing efficiency, and improving infrastructure.[1]
History
"Last mile" was originally used in the telecommunications industry to describe the difficulty of connecting end user's homes and businesses to the main telecommunication network. This last "mile" of cable or wire is only used by one customer. Therefore the cost of installing and maintaining this infrastructure can only be amortized over one subscriber, compared to many customers in the main "trunks" of the network.
In supply chain management last mile describes a similar problem for both transporting people and freight. In freight networks, parcels for many customers can be delivered to a central hub efficiently using ships, trains, large trucks, or planes. Once at this central distribution hub, these parcels must be loaded into smaller vehicles for delivery to individual businesses or consumers. In transportation networks last mile describes the difficulty of getting people from a transportation hub such as an airport or train station to their final destination. Just as in telecommunications networks, the costs of last mile delivery are often higher.
Usage in distribution networks
Transporting goods via freight rail networks and container ships is often the most efficient and cost-effective manner of shipping. However, when goods arrive at a high-capacity freight station or port, they must then be transported to their final destination. This last leg of the supply chain is often less efficient, comprising up to 41% of the total cost to move goods.[2] This has become known as the "last mile problem."[3][4] The last mile problem can also include the challenge of making deliveries in urban areas. Deliveries to retail stores, restaurants, and other merchants in a central business district often contribute to congestion and safety problems.[3][5]
A related last mile problem is the transportation of goods to areas in need of humanitarian relief. Aid supplies are sometimes able to reach a central transportation hub in an affected area but cannot be distributed due to damage caused by a natural disaster or a lack of infrastructure.[6]
One challenge faced in last mile delivery is unattended packages. Shipping companies, like UPS, FedEx, USPS, DHL and others, leave a parcel unattended at a business or home which exposes the item(s) to weather, and the chance of theft by "porch pirates" (a person who steals packages off of customers' porches or front door areas). One solution to this problem is setting up lockers in urban centers. Amazon in the United States has deployed lockers where customers can pick up packages rather than them being left at their home. This protects them from theft and damage as well as allowing companies to deliver to one location, rather than a number of individual homes or business. Similarly, in Taiwan, some online vendors offer the option of delivery to a convenience store of the customer's choice, for pickup from the store by the customer. Not only does this reduce the chance of theft and consolidate packages but also payment for the purchase at the store may also be offered.
To reduce cost retailers have researched using autonomous vehicles to deliver packages. US based Amazon and China based Alibaba have researched deploying drones for delivering goods to consumers.[7] In Europe, Germany, Britain and Poland have experimented with services which provide automated parcel delivery.
Usage in transportation networks
The Hiriko folding two-seat urban electric car was intended to be deployed in Germany in 2013 to provide the last mile of the journey to Deutsche Bahn's railway customers to their final destinations.[8]
"Last mile" also describes the difficulty in getting people from a transportation hub, especially railway stations, bus depots, and ferry berths, to their final destination. When users have difficulty getting from their starting location to a transportation network, the scenario may alternatively be known as the "first mile problem."[9] In the United States land-use patterns have moved jobs and people to lower-density suburbs that are often not within walking distance of existing public transportation options. Therefore, transit use in these areas is often less practical. Critics claim this promotes a reliance on cars, which results in more traffic congestion, pollution, and urban sprawl.[10]
Solutions to the last mile problem in public transit have included the use of feeder buses, bicycling infrastructure, and urban planning reform.[11] Other methods of alleviating the last mile problem such as bicycle sharing systems,[9] car sharing programs,[12] pod cars (personal rapid transit),[13] and motorized shoes[14] have been proposed with varying degrees of adoption. Late in 2015, the Ford Motor Company received a patent for a "self-propelled unicycle engagable with vehicle", which is intended as a last mile commuter solution.[15] Bicycle sharing programs have been successfully implemented in Europe and Asia, and are beginning to be implemented in North America.[16][17][18] Starting in late 2017, micro-mobility services that provide shared vehicles such as dockless electric kick scooters[19] or electric-assist bikes[20] entered the marketplace.
Last mile technology platforms
Due in part to demand on retailers and product manufacturers to provide expedited (same and next day) deliveries, tech-enabled last mile technology platforms have emerged. Increased demand for last mile fulfillment has put pressure on shippers to manage many types of delivery companies, which range from traditional parcel carriers, to couriers, to on-demand service providers that execute an "Uber for delivery" model utilizing contractors.
Matching the supply of delivery with the demand that has been created by shippers is a problem that is being addressed by last mile technology platforms such as Onfleet, OneRail, Bringg, and Locus. These companies connect shippers to delivery service providers to facilitate final mile deliveries. These last mile technology platforms allow real-time data to be received by the shipper and the receiver which enables managers to act immediately when exceptions such as a late delivery, address error, or product damage occur.