The last mile in food logistics, particularly for Original Equipment Manufacturers (OEM), are not just operational stages; they’re critical touch-points in the customer experience and supply chain efficiency. It doesn’t matter whether it’s a shipment from a manufacturing facility to a distribution center, a distribution center to a retail store or restaurant, or from a distribution center to a distribution center.
As this sector undergoes a transformation marked by technological innovations and a shift towards sustainability, how food is delivered is being reimagined, with route optimization, real-time tracking and eco-friendly transportation being the new normal. Yet, it’s a shift that poses a few questions: How will food OEMs continue to evolve in this rapidly changing domain, and what innovative strategies will they adopt to stay ahead? What might we uncover about the future of food logistics and its impact on our daily lives?
Understanding the Basics
Let’s start with the basics of food logistics. At a fundamental level, understanding the basics of last mile delivery and potential B2B applications go a long way in ensuring products reach their final destinations efficiently, at optimal quality, and at reasonable costs.
Last Mile or Final Mile Delivery
Delivery’s last mile or final mile, represents the concluding step in the logistics chain where products are delivered to the end customer. While this phase is crucial for ensuring customer satisfaction and maintaining the quality of the product, it takes on a whole new meaning in the food industry, particularly for wholesale distributors. Here, it involves not just the delivery from the manufacturing facility to the distribution center, or from the distribution center to stores/restaurants, but also the preservation of the freshness and integrity of the products. Given that these products are most at risk during this stage, efficient management of the final mile is essential.
Consider a scenario where a restaurant orders fresh seafood. The last mile delivery is where these seafood items travel from the local distribution center to the restaurant. Any delays or mishandling during this phase can compromise the quality and safety of the food, affecting both the reputation of the supplier and the dining experience and health of the restaurant’s customers.
B2B Applications for Final Mile in Food Logistics
The final mile in food logistics is a critical segment in the supply chain, especially in the B2B context. This phase, though often challenging, presents numerous opportunities for innovation and efficiency. Here are some key applications and examples:
- Specialized Packaging for Food Products: In food logistics, the right packaging plays a vital role in maintaining product quality. For example, using insulated packaging for temperature-sensitive items or sturdy containers for fragile goods ensures the safe delivery of food products, protects the integrity of the food, and aligns with health and safety regulations.
- Efficient Transport and Delivery for Food Items: B2B food logistics often involves optimizing transportation routes to ensure timely delivery of perishable items. For instance, using refrigerated trucks for dairy products or implementing route optimization software to minimize delivery times.
- Technology Integration in Food Logistics: Automation and real-time tracking can help prevent spoilage and ensure timely deliveries. A real-life application could include using GPS tracking for real-time monitoring of food shipments or automated systems for managing inventory and scheduling deliveries, ensuring that food products are delivered fresh and on time.
- Adaptive Strategies for Food Delivery Challenges: Flexibility in handling last-minute changes is essential in food logistics due to the perishable nature of products. B2B companies might use dynamic scheduling tools to accommodate last-minute order changes or cancellations, thereby maintaining service quality without incurring additional costs.
- Collaborative and Shared Resources in Food Distribution: Sharing resources like storage facilities or transportation can be effective in food logistics. For example, a B2B company might partner with local farmers to use shared cold storage facilities or collaborate with logistics companies for efficient distribution, optimizing resources and reducing costs.
Challenges in Delivery for Food OEMs
For food OEMs, logistics challenges are manifold in the last and middle mile. If you sleepwalk through these phases, you could find yourself staring at worsened operational efficiency, customer satisfaction and overall profitability.
Last Mile Challenges
- Traffic Delays and Routing Issues: Traffic delays and routing problems severely impact last mile delivery. These issues can lead to late deliveries and customer dissatisfaction in congested urban areas. The challenge is amplified by the increasing demand for same-day deliveries, with the global same-day delivery services market growing from $6.44 billion in 2022 to $7.93 billion in 2023.
- Customer Availability: Another challenge is aligning deliveries with customer availability. Missed deliveries due to the recipient not being at the products’ final destination can increase costs and reduce customer satisfaction.
- Maintaining Product Quality: Perhaps the most crucial aspect of food logistics is maintaining product quality during transit. Ensuring that perishable items like dairy, meat, fruits and vegetables stay fresh and safe for consumption requires sophisticated temperature-controlled logistics, especially with a third of all food produced worldwide lost, wasted and costing over $35 billion a year.
Final Mile Challenges in Food Logistics
In the final mile of food logistics, businesses encounter several unique challenges that directly impact their efficiency and customer satisfaction. These challenges stem from the complexities of delivering perishable goods promptly while managing costs and maintaining quality. Here are five key challenges:
- Increased Transportation Costs: In the final mile of food logistics, both inbound and outbound transportation incur significant costs. Inbound costs cover transporting goods from suppliers to warehouses, often higher for perishable items needing temperature-controlled transit. Outbound expenses include fuel and maintenance for delivering products from warehouses to customers, with added complexities in urban areas.
- Customer Delivery Expectations: Meeting precise delivery windows is just as vital for B2C logistics as for B2C. Late or missed deliveries can disrupt customers’ business operations, leading to dissatisfaction and potential loss of business.
- Handling and Packaging for Perishable Goods: Ensuring the freshness and quality of food products during transport requires specialized handling and packaging solutions. It can include temperature-controlled containers and careful handling to prevent damage or spoilage.
- Scalability and Flexibility in Operations: Responding to varying demand levels, especially during peak seasons or promotional periods, is a significant challenge. It requires scalable logistics solutions and the ability to adapt delivery strategies to changing needs quickly.
- Efficient Coordination with Warehouses and Suppliers: Timely and effective coordination between warehouses, suppliers, and transportation teams is vital to ensure that food products are moved efficiently through the supply chain. Any misalignment or delay can lead to increased costs and reduced product quality.
Strategic Utilization in the Food Industry
The food industry is undergoing a dynamic transformation, integrating technology and strategic planning to cater to modern consumer demands and address the challenges above. This evolution focuses on the ‘food mile’ — specifically, the last and middle miles, each critical for quality delivery and supply chain efficiency.
Last Mile Utilization for Food OEMs
The direct-to-consumer model is revolutionizing the last mile. Online grocery sales are projected to nearly double from $95.8 billion in 2020 to an estimated $187.7 billion by the end of 2024, for instance. Food OEMs are tapping into this trend using AI and IoT to predict and adapt to consumer behavior, offering a more personalized shopping experience and adopting best practices. At the same time, embracing flexible delivery models is now a key to customer satisfaction. With 60% of consumers saying they would choose a retailer based on the availability of delivery options, and 45% willing to switch to a competitor for better delivery options, OEMs offer varied delivery options, from same-day to scheduled slots, to enhance the overall customer experience.
Middle Mile Utilization for Food OEMs
While the last mile focuses on the consumer, the middle mile is all about efficiency, with food OEMs actively using advanced algorithms and real-time data for optimized route planning. This approach slashes delivery times and costs, mutually benefiting manufacturers and retailers, and reduces emissions, enhancing sustainability. Companies also boost efficiency through collaboration, sharing logistics and distribution networks to cut costs and increase product availability.
For instance, sharing truck space or consolidating shipments enhances vehicle use efficiency, reduces congestion and minimizes environmental impact. Courier express service providers working together can also reduce distance-based costs by up to 16%, cut environmental costs by 24% and increase volume by 25% for all partners involved. At the same time, transporting non-perishable items in bulk lowers per-unit transportation costs and fosters sustainability by reducing the frequency of trips and emissions.
Mastering Last Mile Delivery in Food OEMs
To tie it all together, let’s dive into how last mile delivery in the food industry is evolving to create a smoother and more satisfying experience for everyone involved.
Key Strategies and Components
Last mile delivery in the food industry has dramatically evolved, thanks to a synergy of advanced technology and skilled human touch. Central to this transformation are the roles of delivery personnel, vehicles and platforms like OneRail. First, as the face of the brand, the delivery staff critically impacts customer satisfaction with their efficiency and professionalism. Meanwhile, vehicles with the latest navigation and tracking tech ensure prompt and secure deliveries. OneRail’s platform exemplifies the technological revolution by integrating cutting-edge technologies like the Internet of Things (IoT) and Machine Learning (ML) and seamlessly connecting point-of-sale data to a network of 12 million+ drivers, 650 carrier/courier companies and 65+ logistics companies (3PLs). The route optimization and 98% on-time delivery rates are the cherries on top.
Enhancing Efficiency and Customer Experience
The journey to refine last mile delivery in the food industry, highlighted by the experiences of giants like PepsiCo, Mondelez and Golden State Foods working with OneRail, is a tale of innovation meeting practicality. It’s not just about deploying technology for the sake of it; it’s about the tangible perks that come with it — cost savings from smarter routes and time efficiency, and the ripple effect these have on customer happiness. Imagine receiving your order faster than expected and being able to track it every step of the way; that’s the kind of customer delight these improvements foster. Here, the essence of OneRail’s impact shines in creating a seamless, efficient and genuinely customer-focused delivery system. Such advancements in last mile logistics reimagine how we experience food delivery, making it more reliable, transparent and attuned to modern needs.
The Road Ahead: Future-Proofing Food Delivery for OEMs
Understanding and optimizing both last mile and middle mile delivery has emerged as a critical factor for food OEMs to succeed. The path that food products take from the manufacturer to the consumer’s doorstep is complex, with each mile presenting unique challenges and opportunities. Managing these aspects can lead to significant benefits, from enhanced operational efficiency to lower costs and, most importantly, a better customer experience.
OneRail exemplifies this potential with services tailored for streamlined final mile delivery. Beyond our national network of over 12 million couriers, the OmniPoint™ Platform offers rate shopping, smart matching and real-time visibility. At the same time, the Exceptions Assist™ team proactively manages any delivery disruptions. At the same time, OneRail’s elastic capacity connects businesses to an extensive network of carriers, seamlessly integrating with various systems to enhance delivery workflows.
Interested in stepping up your delivery game? Taking a quick look at what OneRail offers could be your next move toward logistical excellence. So check out a demo and see how we can transform your delivery strategy today.
