Deliveries to consumers continue to get faster, but cutting that “last mile” time further will likely be harder to do in an era of shifting shopper preferences and cost mitigation-efforts by shippers, Supply Chain Dive reports.
One major factor pushing faster delivery is occurring on the fulfillment side, where companies have moved inventory closer to end consumers, most notably Amazon and its shift to a regional network model. In a similar vein, several retailers are bolstering their in-house fulfillment investments and efforts, including:
*Walmart, whose store-fulfilled delivery sales nearly tripled over a two-year period;
*Target, which announced a $100 million investment earlier this year to leverage its store footprint for next-day deliveries.
Such efforts helped push down the time between a customer placing an order and final delivery fell to an average of four days in April, according to Project44’s most recent “State of Last Mile” report. That’s down from 5.6 days a year earlier.
But a confluence of factors will likely limit delivery speeds from going much faster, if not actually slow them down. Retailers have been cautious in recent months about leveraging higher-cost shipping services in an inflationary environment that’s biting into their bottom line. In turn, the demand for express deliveries using air-cargo networks has waned, with many shippers instead calling for more use of cheaper ground transportation.
That means retailers will need to strike a balance between cost mitigation and meeting consumers’ expectations in order to improve their delivery offerings for the long run, experts say.
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