Introduction :

The last mile is the most crucial and challenging stage of the supply chain. Since the strong growth of deliveries and the exorbitant expansion of the e-commerce sector during the health crisis in 2020, this sector currently represents a turnover of well over 112 billion euros. This step represents the most profitable part of the supply chain, which is why it is at the center of business controversy.

What is the last mile?

“Last-mile logistic” refers to the last delivery process, and more simply its trajectory to its final destination, which is the place where the recipient’s package is received.

Despite its profitability, this stage is also the most costly, with repercussions on all levels, on traffic congestion, and on the environment.

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What are the challenges faced in the last kilometre ?

The last kilometre can be run in several ways, each with its own challenges:

   1. Cost

According to a study by Cushman & Wakefield last-mile delivery can account for up to 50% of total supply chain costs, and this high cost is due to multiple transport-related inefficiencies, namely:

  • Not guaranteeing receipt of the package by the customer.
  • Implementing suboptimal delivery methods.
  • Or making separate return journeys.

3. Customer satisfaction:

This is the only time the customer interacts with the shop that sold him the product. The dual challenge of customer satisfaction and company reputation is significant.

  • Today, customers are most satisfied with the speed of delivery: 67% of them prefer to receive their parcel the same day they order it.
  • Delivery punctuality: According to a survey conducted by Cap Gemini, late delivery was the cause of dissatisfaction for 48% of customers.
  • Delivery quality: Customers demand that their parcels arrive in perfect condition at their home or office.

   2. Distance

Another problem with the distance between the warehouse and the final delivery point is that it is too far. Logistics hubs are often located in outlying urban areas to save on rent. However, we now realize that this imposes additional costs (wage costs, fuel costs). Conversely, locating a distribution warehouse in the city would tend to greatly reduce the cost of the last mile. Reducing the travel time by just 10 minutes could save up to €1 million per year.

    4. The ecological impact

It is essential to meet this challenge. In recent years, there has been an increase in delivery vehicles in the city. In recent years, motorcycles have become an important part of urban traffic. As for freight transport, it accounts for almost a third of the city’s CO2 emissions. This is a considerable number, and carriers, such as Courier Express, have taken various measures to remedy the situation.

The top 5 costs associated with last mile logistics or total shipping costs:

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Fuel costs :

  • Accounts for 10-25% of overall last-mile delivery expenses

Labor costs:

  •  Accounts for 50-60% of total last-mile expenditure.

Delivery management software costs:

  • Often quite high. But they are affordable because they help you reduce other costs.

Costs of failed deliveries:

  • Can largely affect the bottom line of last mile logistics.

Other miscellaneous costs:

  • Vehicle maintenance, idling and rescheduling.

Electric utility vehicles: solutions offered by Watèa by Michelin

Electric utility vehicles: the solutions offered by Watea by Michelin : an improved solution dedicated to last mile delivery: electric utility vehicles, recharging infrastructure, insurance and assistance, and support over time. In concrete terms, this means :

  • An Energy Transition Manager assesses the need to better calibrate the solution:

– Vehicles: he identifies the vehicles eligible for the charge book.

– Infrastructure: depending on the rights of the electrical network, he advises on how to update it.

  • Installation of charging stations: Watèa by Michelin installs charging stations adapted to the use and provides access to the public network.
  • Watèa by Michelin delivers the vehicles and trains the drivers to use them. The dedicated mobile app enables real-time range management. On the fleet manager’s side, a portal is made available to manage the entire fleet.
  • Continuity of service: the transition is very easy. Service continuity is ensured.

There are many challenges for online retailers. To promote and sponsor the ecological transition, all strata of this activity are mobilized. Among them, fleet managers have many opportunities. In last-mile logistics, the transformation is already underway to be in phase with the new practices of urban logistics. Vehicles are tending towards a decline in emissions. This is combined with digital devices designed specifically to help drivers in their daily work. This implementation is facilitated by the emergence of innovative players like Watèa by Michelin. The company offers an all-in-one electric mobility package. For example, the carrier Transtekexpress recently preferred the Watèa by Michelin solution.

Conclusion:

An evaluation of the evolution of urban deliveries was made based on the largest metropolises such as Los Angles, Paris, London, and Amsterdam. It was drawn 2 categories of city models:
• A city that spreads out with a sprawling suburb/periphery (LA)
• A metropolitan area with a dense center (London).
This study is based on 3 important factors: the “3 Ps”, People – Planet – Profit.

The challenge of last-mile delivery is to find the right balance for everyone in order to have a positive 3P and understand the interactions between the different actors.
We concluded that public authorities and companies must join forces to become one and bring down the enemy.

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