File mile delivery is a crucial step in the shipping process, getting a product that last short distance to its destination. Learn more about final mile, how it’s completed and what it means for your shipments.
What is Final Mile?
Final mile is the last part of a delivery and takes the product the final “mile” or so required to get it off a truck and to your front door. Getting a product from a warehouse to the general area of its destination is fairly straightforward, as these operations occur everyday and are completed by the same teams/partners in each locations who are well-informed on how the process must occur. Often times, final mile is the trickiest part of deliveries for a variety of reasons.
Why is Final Mile So Challenging?
Final mile tends to be the most challenging aspect of deliveries, as it is more difficult to reach every corner of the country to fulfill a given order. This part of the delivery process often has many stops with low drop sizes, making it hard to operate efficiently. Especially in rural areas, final mile can take much more time and the costs increase, with several miles in between deliveries and many of those packages are small, low-cost deliveries. Cities are not immune from final miles challenges either, as delivery stops are more frequent but are slowed down significantly by traffic. The pandemic has only exacerbated last mile challenges, with e-commerce sales higher than ever.
How Much Does Final Mile Cost?
It is hard to get concrete numbers behind final mile costs, as they range widely depending on the size and cost of shipping each product but it has been estimated that final mile accounts for about 50% of the total shipping costs. This is an exorbitant portion of the cost, as many of these shipments are cross-country and necessitate costly shipment types to complete the delivery. The major problem in accounting for this cost is that since the rise of “free shipping” offered by major retailers, notably when customers spend a certain amount, consumers are less and less motivated to pay shipping costs at all, and what they are willing to pay is on the lower end of the scale, accounting for a small percentage of the shipping process. This has put shippers in the difficult position of swallowing much of that cost, forcing their service fees to increase so they can run at a profit.
Questions on Final Mile?
If you are still left with questions about final mile deliveries, please contact our team to get answers. LogiWorld offers a range of services including imports, exports, auto shipping, project cargo and more.