Last-Mile Issues: The Biggest Challenges in Last-Mile Delivery (and How to Overcome Them)

Last-mile delivery, the final stage of a product’s journey from a distribution center to the end customer, is a crucial component of the supply chain. However, companies encounter numerous challenges and obstacles in last-mile delivery, making it difficult to control costs while maintaining efficiency and ensuring customer satisfaction.

We’ve curated this list of some of the most common and pressing challenges faced by companies operating in the last-mile delivery sector. We’ve also highlighted some key solutions to help you overcome them.

In this article:

• Last-Mile Logistics Issues
• Technology Challenges in Last-Mile Delivery
• Industry & Regulatory Challenges
• How to Overcome Common Last-Mile Issues
• Solving Last-Mile Challenges with Wise Systems
• Frequently Asked Questions

Last-Mile Logistics Issues

1. Traffic congestion.

Last-mile delivery routes in cities can be congested with traffic, making it difficult for delivery drivers to make timely deliveries. Parking restrictions, road closures, and other obstacles can also slow down the delivery process and delay packages from reaching their destination on time.

2. Poor weather conditions.

Poor weather conditions such as snowstorms, heavy rain, hurricanes, and heat waves can impact the efficiency and effectiveness of last-mile delivery services. Inclement weather can lead to road closures, traffic congestion, and hazardous driving conditions, causing delays in transit times, missed delivery windows, and unhappy customers.

3. Remote delivery locations.

In rural or remote areas, the lack of infrastructure and road access can make it difficult for delivery trucks to reach the final destination. Narrow or unpaved roads, rough terrain, and long distances can significantly slow down the delivery process and increase transportation costs.

4. Many small stops.

Delivering to several locations or customer addresses requires drivers to make frequent small stops, which decreases efficiency and increases costs. Delivery vehicles are often left idling during deliveries, contributing to increased fuel consumption and emissions.

5. Long distances between stops.

Like the frequent stops in urban areas, deliveries in rural areas also pose challenges. In these areas, drivers often must travel miles between stops, which increases travel time and lengthens delivery times.

6. Increasing order volume.

Increasing order volume in last-mile delivery strains existing logistics networks. Traditional delivery routes and schedules may not be able to handle the higher volume of orders, leading to delays and missed deliveries.

Another challenge is the cost of scaling up last-mile delivery operations. As order volume increases, companies may need to invest in more delivery vehicles, hire additional drivers, and expand their warehousing facilities. These expenses can quickly add up, impacting the company’s bottom line.

Furthermore, increased congestion in urban areas due to the higher volume of delivery vehicles can lead to longer delivery times and increased environmental pollution, negatively impacting both the customer experience and the environment.

7. Inadequate roadway systems.

Poorly designed or maintained roads, lack of proper signage, and bottlenecks can all contribute to traffic delays, especially in urban areas. Inadequate roadway systems can make it difficult for delivery vehicles to access certain locations.

Narrow lanes, limited parking spaces, or restrictions on vehicle size and weight can all hamper the ability of logistics companies to make deliveries efficiently. This can result in longer delivery times, missed deliveries, or additional costs incurred due to the need for alternative transportation methods.

Poorly lit areas, narrow streets, and lack of proper infrastructure can also increase safety concerns, putting drivers at risk of accidents or injuries while navigating congested or unfamiliar locations.

8. Vehicle issues.

When a delivery vehicle breaks down or experiences mechanical issues, it can cause delays in the delivery schedule. Vehicle issues can also result in increased operating costs for companies. Maintenance and repair costs can quickly add up, especially if a company has a fleet of delivery vehicles that require regular upkeep.

Unexpected breakdowns can also lead to additional costs for towing, rental vehicles, or expedited shipping options to ensure that deliveries are still made on time. If a delivery vehicle is out of commission, it can disrupt the entire delivery schedule and force companies to rearrange routes and allocate resources less efficiently.

9. Customer-warehouse proximity.

Carriers should have delivery hubs or micro-fulfillment centers near customers, a concept also known as forward deployment, which saves time and reduces transportation costs. In general, delivery hubs should be within 45 minutes of the delivery destination.

A lack of strategically positioned delivery hubs can result in delays, negatively impacting customer satisfaction. In fact, 62% of customers say they won’t purchase from that vendor again if a delivery is delayed by more than two days.

However, managing more facilities increases operations and maintenance costs. The key, as with many aspects of last-mile delivery, is finding the right balance to minimize costs, maximize efficiency, and ensure customer satisfaction.

10. Complex delivery routes.

Navigating complex delivery routes often leads to longer delivery times and increased fuel costs. Delivery drivers may have to travel longer distances, make more stops, and encounter traffic congestion or road closures, all of which can delay deliveries and increase operational expenses.

In addition, route planning, navigation, and visibility are more challenging with complex delivery routes. Delivery drivers may get lost, make wrong turns, or experience difficulty finding specific delivery locations, and the risk of accidents and errors is greater. Additionally, it becomes challenging to track the location of delivery vehicles in real time, monitor driver performance, and respond quickly to unexpected issues or changes in delivery schedules.

Factors such as traffic patterns, construction zones, and delivery time windows must all be considered when mapping out routes to avoid delivery delays, missed deliveries, and dissatisfied customers.

Book a demo to learn how the Wise Systems delivery automation platform can help you manage complex delivery routes and boost efficiency with route optimization, driver communication, and more.

11. Navigation issues.

Navigation issues such as inaccurate GPS coordinates, unclear or incorrect address information, and inefficient route planning can all pose significant challenges in the last-mile delivery process.

Inaccurate GPS coordinates or unclear address information can lead to packages being delivered to the wrong location or lost in transit. This can result in additional costs for the logistics company to replace or refund lost packages, as well as damage to their reputation.

12. Seasonal demand fluctuations.

While increased demand during peak seasons can lead to higher sales and profits, it also poses challenges in delivery logistics and customer satisfaction. Seasonal fluctuations can also increase demand for delivery drivers, couriers, and fulfillment center staff, resulting in a labor shortage.

A sudden surge in orders during peak seasons, such as holidays and sale events, can overwhelm delivery fleets and distribution centers. If inventory levels aren’t properly managed, this can lead to delays in delivery times, increased shipping costs, and potential stockouts.

13. Time management.

Effective time management is crucial in last-mile delivery. With the rise of e-commerce and the demand for fast delivery times, delivery drivers are often expected to navigate busy roads and traffic congestion to meet tight delivery windows.

At the same time, factors such as weather conditions, road closures, and unexpected delays can all impact the delivery schedule. This can make it difficult for companies to plan and allocate resources accurately, leading to inefficiencies in the delivery process.

Delivery routes need to be optimized to ensure that drivers can make all deliveries in a timely manner without wasting time and fuel navigating back and forth between locations. Companies must also plan for potential delays and disruptions to meet delivery deadlines, set realistic shipping expectations for customers, and avoid overtime costs for drivers.

Technology Challenges in Last-Mile Delivery

14. Outdated tools and technologies.

With outdated systems, logistics companies may struggle to accurately track the location of delivery vehicles, monitor driver performance, and provide customers with up-to-date information on their orders. Outdated technologies may not be compatible with newer systems and platforms, hindering integration with other aspects of the supply chain, such as inventory management, order processing, and customer relationship management.

Additionally, outdated tools often rely on manual data entry, paper documentation, and phone calls to coordinate deliveries. This can lead to errors, delays, and a lack of transparency in the delivery process. With the rise of e-commerce and consumer demand for faster delivery times, relying on manual processes is simply not sustainable in today’s fast-paced environment.

15. Lack of real-time visibility.

Real-time visibility is essential for optimal route planning and adjustments based on current conditions. When companies lack visibility, drivers may take inefficient routes, leading to longer delivery times and increased fuel costs. A lack of real-time visibility can also make it difficult to accurately predict delivery times and respond to unexpected issues such as traffic delays or vehicle breakdowns.

Real-time visibility also enables customers to track their deliveries and receive updates on the status of their packages. Without it, customers may be left in the dark about the location of their deliveries, leading to frustration and a poor customer experience.

16. Inefficient route planning.

When routes are not optimized, drivers may take longer to reach their destinations, resulting in delayed deliveries. It also leads to increased fuel costs and vehicle wear and tear. Drivers may take longer routes with more stops, increasing fuel consumption and maintenance costs.

Inefficient route planning can also impact the environment. Increased fuel consumption due to longer routes contributes to higher carbon emissions, harming the environment. With the growing focus on sustainability and eco-friendly practices, delivery companies must optimize their routes to reduce their carbon footprint.

17. Technology adoption.

While using up-to-date tools and technologies is vital for efficient route planning and real-time visibility, adopting these technologies sometimes comes with a high cost. Many modern technologies offer excellent ROI, but companies may not have the funds to cover the initial upfront costs of these investments.

18. Technological integration.

Check out our ever-growing list of tech partners and integrations! We’re adding the list to the list regularly and would love the opportunity to work with you, too. Join us! https://t.co/GqwPbLLGxy pic.twitter.com/xp0yv1AF3y

— Wise Systems (@goWiseSystems) April 26, 2023

Companies may use different systems for route optimization, package tracking, and customer communication. As mentioned above, implementing the latest, most advanced technologies may be cost-prohibitive for some companies.

But that’s not the only challenge. Integrating these systems can be complicated and time-consuming, especially if the systems are incompatible. Issues with the new technologies, such as software bugs or hardware malfunctions, can lead to delays in the delivery process.

19. Security and theft.

When it comes to technology, there are also challenges related to data security and privacy. Companies must ensure the privacy and security of their customers’ information when using technologies such as GPS tracking and customer data collection. Any breaches in data security can have serious consequences for both the company and the customer.

20. Autonomous vehicles, drones, and robots.

The rise of autonomous vehicles, drones, and robots in last-mile delivery services has revolutionized how packages are transported and delivered. However, these technologies also pose some challenges.

These vehicles require specialized equipment and technology to navigate through urban environments, avoid obstacles, and deliver packages efficiently. Companies must invest in these technologies and ensure that they are properly integrated into their existing delivery systems.

These vehicles are also susceptible to accidents, theft, and vandalism. Companies must implement robust security measures to protect their vehicles and packages from potential threats. Additionally, they must adhere to strict safety regulations to ensure the well-being of both the delivery vehicles and the public.

Request a demo today to discover how Wise Systems can help you optimize delivery routes, gain real-time visibility, and more while offering seamless integration with a growing number of tools and solutions.

Industry & Regulatory Challenges

21. Driver shortages.

The trucking industry has been plagued by driver shortages for several years. In January 2024, the American Trucking Industry estimated a shortage of 60,000 drivers. According to Truck Driver Rights, the industry will need to recruit 1.1 million truck drivers by 2026 to keep up with demand. Of course, truck drivers are just one of many categories of delivery personnel, but these figures provide a glimpse into the industry’s labor shortage.

Driver shortages can result in delays in delivery times as companies struggle to find available drivers to fulfill orders. Companies may have to spread their existing drivers thin to cover all delivery routes, resulting in longer delivery times. And with fewer drivers available, companies may have to pay higher wages or offer other incentives to attract and retain drivers, which increases operational costs.

22. Workforce management.

The demand for quick and convenient deliveries has increased significantly in recent years, leading to a greater need for delivery drivers and logistics personnel. However, managing a large and diverse workforce can be challenging, especially when it comes to scheduling, training, and communication.

Delivery drivers often work long hours, navigate through heavy traffic, and handle a large volume of packages, which can lead to burnout and high turnover rates. This constant turnover, coupled with the labor shortage discussed above, can disrupt delivery schedules and impact customer satisfaction, as new drivers may not be as familiar with the routes and processes.

23. Regulatory constraints.

Delivery operations must navigate a maze of often-changing regulations. Local and national traffic and transportation regulations, environmental regulations, and labor regulations can place restrictions on operations, delay deliveries and increase costs.

While these regulations play an important role in modern society, they complicate the already complex landscape of last-mile delivery. Companies must stay informed about regulatory changes and ensure compliance while maintaining cost-effective and efficient delivery operations.

24. Competition.

In a highly competitive market, companies are constantly pressured to deliver goods faster and more efficiently than their competitors. This can lead to companies cutting corners or taking risks to speed up the delivery process, resulting in mistakes, delays, and, ultimately, customer dissatisfaction.

To stay competitive, companies in the last-mile delivery sector need to invest in cutting-edge technologies such as route optimization software, real-time tracking systems, and autonomous delivery vehicles. This can be a significant investment, and companies that fail to keep up with the latest technological advancements may struggle to compete effectively in the market.

25. Fleet management.

Ensuring that delivery vehicles are well-maintained and in good working condition is essential for a successful last-mile delivery operation. Regular maintenance and monitoring of vehicles can help prevent breakdowns, delays, and unexpected costs. However, tracking and managing maintenance schedules for a large fleet of delivery vehicles can be difficult, especially if companies rely on manual processes.

Managing driver performance is also a challenge in last-mile delivery. Monitoring driver behavior, such as speeding, idling, and route deviations, is essential for promoting safe driving practices and reducing fuel consumption. However, tracking and analyzing driver performance data can be overwhelming, especially if companies have a large number of drivers and vehicles to manage.

Learn how the Wise Systems delivery automation platform can help you improve fleet management with effective driver communication, performance management, route optimization, and other tools to streamline every stage of the delivery process. Book a demo today.

How to Overcome Common Last-Mile Issues

While there are specific strategies that can combat the issues described above, a few common themes emerge when exploring potential solutions. Here’s a look at the most effective strategies for overcoming common last-mile issues.

Implement Alternative Delivery Methods

Companies may consider utilizing alternative delivery methods to overcome traffic congestion and help meet environmental and sustainability goals, such as reducing emissions. This may include utilizing bicycles, drones, or crowdsourced delivery services for certain deliveries.

Lockers and pickup points also help companies avoid traffic congestion issues and reduce last-mile delivery costs while also giving customers more control over when and where they receive their packages.

Collaborate with Third-Party Providers

Collaborating with third-party logistics providers can help you expand your delivery network and reach customers in remote or hard-to-reach areas. This is especially helpful for overcoming issues like remote delivery locations and complex delivery routes, as local drivers are more familiar with the area. By outsourcing some of your delivery operations to these providers, you can streamline your delivery process and ensure timely deliveries to your customers.

Prioritize Fleet Management

Companies should prioritize fleet management to mitigate the impact of vehicle issues in last-mile delivery. That includes regular maintenance and inspections of their delivery vehicles, route planning, tracking, and dispatching, as well as driver performance and safety management.

Monitoring driver behavior, such as speeding, idling, and route deviations, is vital for promoting safe driving practices and reducing fuel consumption. Preventive maintenance programs can help identify and address potential issues before they escalate into major problems. Together, these measures help to ensure optimal performance from both your delivery fleet and your workforce.

Improve Driver Training & Workforce Management

Investing in driver training ensures that drivers are equipped to respond to emergencies and perform basic maintenance tasks on the road. Regulations make driver training mandatory, but regulatory compliance is just one of several reasons to implement a comprehensive training program.

Well-trained drivers are more likely to be efficient, effective, and customer-focused, leading to better outcomes for both the business and the end customer. Comprehensive driver training can also help businesses improve the overall quality of their workforce and reduce the likelihood of errors or delays in the delivery process.

Training is just one piece of the workforce management puzzle. Offering competitive wages, training programs, and incentives for drivers will be crucial in ensuring the continued success of last-mile delivery services in the digital age.

Focus on Customer Communication

Clear and timely communication with your customers can help you manage their expectations and prevent last-mile delivery issues. Providing customers with tracking information, delivery updates, and estimated delivery times can help alleviate concerns and reduce the likelihood of missed deliveries.

Additionally, establishing clear communication channels for customers to reach out with questions or concerns can help you address any issues that may arise during the delivery process.

Invest in the Right Technology

One of the most effective ways to overcome last-mile delivery issues, such as traffic congestion, remote delivery locations, complex delivery routes, frequent stops, and long distances between stops, is to invest in the right technologies that offer a proven and rapid return on investment.

Inefficient route planning in last-mile delivery can have a ripple effect on the entire delivery process, impacting costs, customer satisfaction, and environmental sustainability. Route optimization technology is essential to streamline last-mile delivery operations and overcome these challenges. This software considers factors such as traffic patterns, road closures, and weather conditions to create the most efficient delivery routes.

GPS tracking systems can also provide real-time visibility into the location of delivery vehicles, helping you monitor delivery progress and make adjustments as needed. These systems also allow you to provide customers with up-to-date tracking information. By embracing digital transformation and adopting innovative technologies, companies can optimize their last-mile delivery operations and stay competitive in the rapidly evolving market.

Solving Last-Mile Challenges with Wise Systems

Autonomous routing and dispatching is not only necessary, but is the future for many last-mile operations. Learn where your last-mile operations are today and make your AD&R plan. https://t.co/s5fAP9Ms4M pic.twitter.com/DK5fLF2Juq

— Wise Systems (@goWiseSystems) April 24, 2023

The good news is that there are some investments that can help you overcome multiple last-mile delivery challenges. The Wise Systems delivery automation platform is a suite of innovative solutions to address common last-mile issues at every stage of the delivery process, from routing and dispatch to customer communication, performance management, and more.

Ready to discover how Wise Systems can help you streamline your delivery operations and overcome last-mile delivery issues? Book a demo today to learn more.

Frequently Asked Questions

What is the process flow for last-mile delivery?

The process flow for last-mile delivery begins with goods being picked up from a central warehouse or distribution center. These items are then sorted and allocated to specific delivery routes, often using advanced route optimization software to ensure efficiency.

Delivery drivers load the packages into their vehicles and follow the optimized routes to deliver the items to customers. Throughout the delivery process, real-time tracking systems provide updates to both the company and the customers, ensuring transparency and communication.

Upon arrival, the driver completes the delivery, which may include obtaining a signature, taking a photo, or following specific customer instructions for contactless delivery. Finally, any failed delivery attempts are recorded, and plans for redelivery or alternative drop-off points are made.

What is the main problem with last-mile delivery?

The main problem with last-mile delivery is its high cost, which is compounded by the complexity of ensuring timely and accurate deliveries in urban areas. Factors such as traffic congestion, inefficient routing, and the high frequency of failed delivery attempts due to recipients not being available significantly increase expenses.

These challenges are further amplified by customers’ rising expectations for fast, flexible, and often free delivery services, putting additional pressure on businesses to optimize their last-mile logistics without compromising service quality.

What are the key success factors for last-mile delivery?

Key success factors for last-mile delivery include efficient route optimization, real-time tracking, and effective communication with customers. Implementing advanced technologies like AI and machine learning for dynamic route planning can significantly reduce delivery times and costs.

Real-time tracking systems not only enhance transparency but also improve customer satisfaction by providing accurate delivery updates. Additionally, clear and proactive communication with customers regarding delivery times and any potential issues helps manage expectations and reduce failed delivery attempts.

Employing skilled and reliable delivery personnel, along with maintaining a flexible and scalable logistics infrastructure, are also crucial for success.

How can I make my last-mile delivery more efficient?

To make last-mile delivery more efficient, start by investing in route optimization software that uses real-time data to plan the most efficient delivery routes. Implement real-time tracking systems to monitor deliveries and provide customers with accurate updates.

Encourage proactive communication with customers to ensure they are available to receive their packages, thus reducing the number of failed delivery attempts. Consider using a mix of delivery options, such as locker systems or scheduled delivery windows, to provide flexibility and convenience.

Additionally, leveraging data analytics can help identify patterns and areas for improvement, while adopting environmentally friendly practices can also contribute to overall efficiency and sustainability.