Last-mile or the final step of the delivery process is an integral part of the logistic industry. Without optimization, ineffectiveness in the last leg of the delivery process can result in unforeseen costs. Thus, driving your company’s overhead cost over the roof and cutting into your profits.
Thankfully, the advancement of the e-commerce industry and changes in customers’ expectations over the years have forced shipping companies to re-visit their last-mile strategy. Many logistic companies are looking towards AI and Machine language to streamline the delivery process.
Adoption of AI and machine learning will allow these companies to benefit from reduced overhead costs and significant efficiency gains on the road.
Here, we’ve examined ways AI can optimize last-mile logistics and improve logistics companies today and in the future. But before we dive in, let’s first understand the challenges of the last mile.
Last Mile Challenges
Today, there’s a high demand for last-mile delivery services than ever before. This means more pressure for logistic companies to meet customers’ expectations, like faster and effective deliveries. But this is not possible due to several challenges.
In rural areas, a delivery route can contain a few stations located thousands of miles apart. Maybe each delivery point receives one or two packages. That means companies have to deal with the high costs of fueling the delivery trucks to cover those distances.
In urban areas, things are a bit better since delivery stations are closely located. However, cities also have their own set of challenges. Logistic companies have to deal with constant delays due to traffic congestions, parking regulations, and so on. These pains increase last-mile delivery costs significantly.
Additionally, last-mile challenges and costs have increased further due to the increased growth of the ecommerce industry, not only in the US but across the world. There’s an increase in the number of parcels ordered daily. Plus, customers expect logistic companies to meet their expectations, such as fast and free delivery.
How Can AI Help Optimize the Last Mile?
1. Predict Efficient Routes for Drivers
The ever-changing customer expectations call for efficient delivery routes. Logistic companies can leverage the power of Artificial Intelligence to obtain relevant data and analyze a particular route before sending their drivers.
So, if a particular route has traffic congestion, they can re-route the driver to a better path. By placing drivers on the shortest routes possible, they can ensure quick deliveries of products. They can also reduce overall mileage covered and fuel consumed in a day.
Using AI software, these companies can determine the right number of truck fleets required to make deliveries in certain routes. Therefore, making last leg logistics more effective and affordable. The best part is, when provided with historical data, AI systems can learn and determine efficient ways to minimize delivery times.
2. Check Customer Data
Perhaps the most significant challenge faced by last-mile logistics is inaccurate customer data. Most numbers and addresses provided by customers are sometimes incorrect or no longer in use. As a result, the delivered packages might never reach the customer.
Well-established companies often hire a team of data scientists to check the data for correctness. However, they can save more time and money by using an AI system. AI has proven to be an invaluable tool in the capture, collection, and evaluation of data. Supply chain companies can adopt AI solutions to continuously check customer information. This way, they can ensure the provided customer data is correct and consistent with regional and global address structures.
3. Real-Time Tracking
We live in a world where customers want to track and trace their packages through the delivery process in the comfort of their homes. Companies can make this possible via AI and machine language solutions that allow real-time tracking and monitoring of orders. As a result, customers can know the exact location of their order and how much time remains before delivery.
Last-mile visibility will also help the companies identify issues in the delivery line. They can address them to ensure timely delivery. Besides that, real-time tracking via an AI system makes it possible to ensure the safety of products and management of routes without manual intervention.
Besides visibility of orders, AI solutions will ensure customers enjoy the best experience. AI-powered real-time tracking software may feature useful tools like Chatbots to notify customers of any changes or details about their orders. This creates a personalized experience for each customer that companies can take advantage of to stay ahead of the competition.
4. Automation of Shipping Processes
AI systems can collect data from maps and GPS to help in the shipping of packages to unknown pin codes in urban areas. Cities are usually crowded, making it hard for last-mile carriers to identify particular addresses. But with the help of AI, drivers can pinpoint the location more accurately.
Companies can also use AI systems to dispatch orders automatically. Through an algorithm, the system can automatically assign every product a carrier and delivery agent. In the end, little to no manual intervention will be needed.
The AI system will manage the entire operation from dispatch to delivery, ensuring timely and accurate deliveries of packages. Through the algorithm, customers can know the time and date their product will ship beforehand. In case of any delay, they can get notified too.
From route management to real-time tracking, Artificial Intelligence and machine language will truly revolutionize last-mile delivery services. These technologies will set supply chain and logistic companies apart from the competition because they will have real-time evidence of their ability to deliver.
To stay ahead in this competitive market and make the most out of infrastructure and physical assets, companies need to leverage the power of digital technologies. Artificial Intelligence is already an integral part of many industries today, and the logistics industry is no different.
At Integratz, we can help you leverage the power of artificial intelligence to re-vamp your last-mile delivery services. So, schedule a meeting with us today!