We hear a lot about the importance of the last mile of delivery. But what about the first mile?
The first mile of delivery is the first touchpoint in the supply chain that leads to orders landing on the customer’s doorstep, or fresh inventory arriving at a retail store location. Despite this, first-mile delivery is frequently overlooked because it takes place before any interactions with the customer.
But without streamlined first-mile operations, brands and retailers cannot set a solid foundation for the activities to follow. Any difficulties in getting inventory from the supplier to your warehouse filter down the rest of the supply chain, including receiving inventory, order fulfillment, and dispatching completed orders.
In this blog, we’re going to explore what first-mile delivery involves, and how brands and retailers can optimize the first mile by partnering with a third-party logistics provider.
The first mile of delivery refers to the initial stage of delivering goods within the retail supply chain. This is where goods are transported from the manufacturer/wholesaler to the brand’s warehouse or distribution center, where they are readied for sale and shipping to the end customer.
First-mile logistics will look different depending on the business model and who is selling to who. For example, a direct to consumer e-commerce brand needs to source merchandise from suppliers and find an efficient way to transport fresh inventory from the seller’s warehouse to a local distribution center. Alternatively, a nationwide retailer may receive inventory from their manufacturer in one regional warehouse for unloading and repackaging into smaller orders for individual stores.
A streamlined first mile is essential to ensure that brands and retailers receive the inventory they need quickly and efficiently, avoiding delays to order fulfillment and reducing the likelihood of stockouts. This provides a firm foundation for the logistics processes to follow, including the warehouse receiving process, tracking inventory, and setting up pick locations for individual orders.
The first mile and last mile often get conflated in discussions about logistics services. Both are crucial for an efficient delivery process but occur at different points in the supply chain for different reasons.
While first-mile delivery refers to the primary workflow of transporting products from the point of origin, last-mile delivery refers to the final stage of the fulfillment and delivery process. This is where the completed order is shipped from the fulfillment distribution center to its final destination, such as the customer’s doorstep or a regional hub. This requires package sorting, dispatching to local delivery couriers, and advanced route planning for timely delivery, which is key to ensuring customer satisfaction.
The key difference between the first mile and the last mile is the size of the shipment. The order being transported is significantly smaller for last-mile deliveries, which are typically going to end customers. The first mile involves shipping extremely large volumes to a single location, which requires a tailored handover process and procedures for loading and unloading shipments.
Because first-mile delivery operations are not customer-facing, it places a greater demand on economy of scale rather than aesthetics. Products transported in bulk need to be packed appropriately to make it easy for inventory to be received and processed. Last-mile logistics, meanwhile, needs to consider the impression that delivery will have on customer satisfaction through the use of branded packaging and unboxing experiences.
Order Processing. The brand or retailer will place a substantial order for merchandise via a supplier or wholesaler. This order and inventory count are then processed and prepared by the supplier for shipment to the retailer.
Carrier Selection. The supplier or wholesaler needs to decide which shipping company to use to transport the goods. The best parcel carrier for first-mile deliveries will depend on factors such as overall shipping costs, service level, reliability, and the number of shipping zones crossed to get the shipment to its end destination.
Packing and labeling. The shipment of inventory may need to be packed and labeled according to specific routing requirements from the retail customer. This also includes any necessary documentation, such as invoices, itemized inventory lists, and customs forms.
Shipping and delivery. The carrier takes responsibility for transporting the packages from the seller’s location to a central hub or distribution center. They may use various modes of transportation, such as trucks, vans, or even drones, depending on the distance, location, and available infrastructure.
Warehouse receiving process. Once the order arrives at the retailer’s distribution center, it needs to be received into inventory so merchandise can be readied either for picking for customer orders, or broken down into smaller shipments to be distributed to other warehouses.
While the importance of optimizing the last mile of delivery is widely discussed in logistics management, first-mile operations receive nowhere near the same level of investment. But unless you optimize first-mile delivery to ensure streamlined delivery and receiving, this has a knock-on effect on the efficiency of the order fulfillment process, and in turn upon the success of final-mile delivery.
For example, if there’s a delay in a fresh shipment of inventory arriving at your fulfillment center and being unloaded, this could delay the fulfillment of any outstanding orders that require merchandise from that shipment. This lengthens the time it takes for customers or retail stores to receive their orders, putting significant pressure on last-mile delivery capabilities.
Once a new shipment of inventory arrives at your distribution center, it’s a race against the clock for logistics operations to get that merchandise unloaded and ready for the next stage of its journey, whether that’s being dispatched to another distribution center or being prepared for fulfilling individual customer orders. Not having a comprehensive set of SOPS for receiving inventory and readying it for the fulfillment or shipping process can result in costly mistakes or delays.
If shipments need to be loaded and unloaded multiple times, the right packaging is crucial to both speed up inventory transfers between multiple distribution centers and ensure that merchandise doesn’t get damaged in transit. Packaging that is single-use and needs replacing with each receiving, such as stretch wrapping, is highly inefficient and a missed opportunity to maximize operational savings.
If a huge pallet of inventory arrives at your warehouse and there’s no complete record of what it contains, this will slow down the inventory receiving process significantly. Fragmented information on SKU counts and product variations makes it very time-consuming to enter fresh inventory and dispatch it to the appropriate pick location.
Having a warehouse facility that is well-placed to receive inventory and distribute it to further points in the supply chain is crucial for successful first-mile delivery. For example, if your inventory is coming from an overseas supplier, a distribution center close to the port of entry helps to shorten the first mile and generates operational savings that can be invested elsewhere in the delivery process. A third-party logistics partner with a nationwide network of facilities can equip your business with the ideal location to optimize first-mile delivery operations.
Setting appropriate rules for how suppliers need to package or ship merchandise goes a long way toward streamlining the first mile and making it faster to receive and process new inventory. Third-party logistics providers can work with you and your supply chain to identify inefficiencies in these transfers and where improvements can be made at the point of origin. This may include barcoding products, adjusting labeling, or changing what packaging is being used. Automation technology makes it easy to implement these rules consistently and collect data on accuracy and time taken.
The best way to manage your incoming inventory depends on a range of factors such as business model, order volume, product characteristics, and storage strategy. Coordinating these moving pieces independently can be quite overwhelming, especially for businesses that are growing rapidly and need to frequently revise their approach. Working with a fulfillment provider takes this responsibility off your shoulders and allows you to utilize their expertise and resources to create the right supply chain process.
As the first stage in the delivery supply chain, optimizing first-mile delivery and logistics is essential to lay a strong foundation for the subsequent delivery and order fulfillment workflows to follow. As well as ensuring prompt shipments, an effective first-mile delivery process helps to reduce delays to fulfillment, eliminate stockouts, and limit damage to merchandise.
Leveraging an experienced 3PL partner like Ryder E-commerce can optimize first-mile delivery by offering brands and retailers the infrastructure and support they need to streamline the entire supply chain. With a network of strategic distribution centers and wholesale partnerships with national and regional parcel carriers, Ryder E-commerce is well-equipped to build suitable receiving and routing requirements into your strategy.