Supply chain

Logistics warehouses dynamics: the boom of last-mile delivery services

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When thinking about logistics, it’s key to associate operations with deliveries and custom service, which is the final chain link regarding the process.

We’ve seen before how operations work in warehouses and distribution centers, according to the needs of each logistics stage that we explored in the requirements for each one, which changes from warehouses’ big surfaces in regional supply centers, and smaller buildings located in the cities that serve the final steps of the customer attention. These dynamics impact the availability of industrial spaces, as happens with the Mexico City Metropolitan Area and the industrial park in the State of Mexico.

Although the dynamics have changed recently due to the global pandemic and the e-commerce reinforcement, logistics operations used to have a well-organized flow for materials and products movements, moving these goods through different types of buildings for taking them to the buyers, establishing the differences between distribution centers and companies’ warehouses.

The advantages of last-mile logistics

Regarding last-mile deliveries, there are two main categories we can identify, according to Bringg, a delivery management platform with offices in 55 countries:

  • Scheduled deliveries: when a customer orders to be delivered the next day, two days later, or even a week later. 
  • On-demand deliveries: when an order must be delivered the same day.

In both categories, last-mile deliveries differentiate from traditional logistics because the operations require more technology, are more complex, and the cost is higher. Despite all of this, customers look for last-mile delivery because it allows them to receive their products in their own house, or where they decide to.

The model allows last-mile delivery operators to establish routes and coordinate to offer deliveries in parcel lockers, but still, there are hard challenges for them.

  • Speed in the packages’ delivery to buyers.
  • Visibility of the orders to ensure
  • Efficiency in operations for reducing time and routes.

Profit: the main advantage for retailers

While distribution centers act as one of the final touchpoints of retailers and customers, making them where retailers profit, warehouses still serve as a critical component for deliveries, considering them as the places where products and goods are stored before the clients buy what they need.

Recently, a report from FRAYT, an on-demand delivery platform based in Cincinnati, Ohio, showed that managers and supervisors in various industries consider last-mile deliveries an advantage for improving their ROI.

30% of the 600 managers who participated in FRAYT’s survey considered last-mile delivery services improved their ability to ship orders, allowing them to simplify their deliverance activities. 81% also said that last-mile deliveries improve cost-effectiveness, offering them better ROI results.

Key findings from last-mile delivery advantages

FRAYT affirms that last-mile delivery services offer various advantages from different industries, such as:

  • The overall customer experience improves when shipping packages through last-mile delivery-services, according to 83.57% of the managers surveyed.
  • Every day there is more knowledge about last-mile delivery services, with 76.19% of managers using this option.
  • Last-mile delivery services positively affect prompt shipping, 50.99% of the managers said.
  • 80% of the surveyed managers said they would recommend the services to friends, colleagues, and family.
  • 81% of the participants found last-mile delivery services more cost-effective than traditional delivery methods.

E-commerce has made last-mile deliveries a more critical link for retailers' activities and logistics dynamics, reinforcing the need for companies to have adequate alliances and installations within a short distance from big cities to respond well to customers.

While the demand for industrial buildings for logistics operations keeps growing in metropolitan areas such as Monterrey, Guadalajara, and Mexico City, different enterprises must seek better conditions and options for improving their customer service and on-time deliveries. Frontier Industrial offers industrial land for sale and industrial buildings for lease in the main industrial areas of Mexico, including the industrial park in the State of Mexico, allowing retailers and different enterprises to start or expand their operations there. You can contact us to develop your project.