Antonio Tejedo
Vice President Investor Relations
Expert Contributor

Last-Mile Logistics: The E-Commerce Value Promise

By Antonio Tejedo | Mon, 10/18/2021 - 09:05

Much has been said about the exponential growth that e-commerce has experienced in Mexico in the last year. Despite being a global trend, the country still did not have the adequate infrastructure available to meet demand, or in the worst case, most companies did not have this form of sale. Companies had to adapt quickly to be able to efficiently fulfill requests or seek professionalization and incorporation of new technologies.

It should be noted that to be successful in e-commerce, it is vital to have efficient logistics throughout the supply chain, especially in last-mile services, that comply with the promise of value offered to the customer; in other words, a reliable service, delivered on time and that provides certainty for returns, among others. Moreover, it must be profitable for the business. In summary, metrics management should focus on two things: to offer high levels of service and to understand that this is a market that is constantly evolving and becoming more sophisticated.

To make the final delivery to the consumer efficient, the strategic areas of the company need to work collaboratively, including marketing, operations, sales, commercial, finance, systems, and customer service. Together they must understand the customer's needs, define the added value and design each stage of this last phase of the distribution process.

This last step is vital for the growth of a business, as it is the part where the circle with the customer is closed. It is far from simple. As its name suggests, last-mile logistics involve technological development that combines quality personal service with constant innovation. Trends in the last year have involved hubs, urban micro-hubs, consolidation centers, shared logistics centers, a network of intelligent points and deliveries in all types of transportation, as well as the implementation of state-of-the-art technology.

Logistics costs for an SME with an efficient delivery chain can represent up to 30 percent of total sales. In addition, customer demands for "fast, convenient and free" have an impact on customer image and satisfaction. This operational process could be optimized by outsourcing the service through a dedicated company, such as Traxion.

Doing so can effectively solve the problem, while the company focuses on whatever its core business is. Overnight, you can have intelligent logistics assistants planning routes and monitoring orders, and gain access to shared warehouses and digital order tracking, which represents a supply chain solution, not just an ordinary last-mile service.

The current times pose a challenge that has forced us to rethink how the future of last-mile delivery should be approached, with some of its main features being the use of new technologies that are integrated into the shipping and delivery process, as well as robotic automation. New delivery options, smart addresses that make route planning more efficient, sustainable deliveries through low or zero-emission fleets, urban micro warehouses with immediate delivery options, among others, are key features. In addition, today's service must avoid contact between the customer and the person who delivers the goods, consider changes in the reception of deliveries, have greater restrictions in the handling of goods, and have simpler return processes.

The final delivery to the customer is an enormous opportunity for growth. The key lies in the technology, the talent, the strategic alliances developed, and the proximity to the consumer. Many companies are unaware of last-mile logistics and believe that everything will return to the context before the pandemic; however,  current circumstances have caused a paradigm shift in consumption patterns that is here to stay.

As a mobility and logistics company, we at Traxión know that flexibility, adaptation, and innovation are absolutely necessary for success in e-commerce.

Photo by:   Antonio Tejedo