Common eCommerce Challenges: What is Last-Mile Delivery?

The pandemic forced many Mexicans to stay at home and, as a consequence, eCommerce in the country has skyrocketed. Mexico is now the second-largest Latin American country active in online retail sales, with $21 billion in market revenue in 2021. However, the rising popularity of eCommerce is both a blessing and a challenge: Brands like Jüsto and Mercado Libre are embracing new technologies to make retail more accessible and faster – putting the pressure on other retailers to keep up.  One of the biggest challenges for digital retailers is last-mile delivery. Delays due to traffic, missing items, and returns have been part of everyday eCommerce, together inhibiting cost efficiency and customer satisfaction. So, what can businesses do to meet modern customers’ demands and stay in the black? Let’s dive into what last-mile delivery is and what new customer demands mean for the logistics of smaller companies.


The term last mile encompasses all the processes that an ordered product goes through from the warehouse shelf, via the route, to the customer’s front door.  Usually, when a customer requests a product online, the vendor will send the order to their warehouse or store, where the staff checks the products’ location and availability. After confirming product stock, the last-mile delivery begins. Shipping personnel will pick up the order from the warehouse, load it into the determined vehicle (moto, van, truck), and start their delivery route until the customers indicated addresses.  Every company will go through different logistical processes. For example, a furniture store may send deliveries individually, while a shoe shipping company will bundle several orders from various shoppers before sending the truck driver out. Many companies with smaller order volumes also tend to outsource transport to third-party providers, who usually deliver parcels for several companies simultaneously. 


For eCommerce businesses, delivery holds the key to customer satisfaction. Next to the online storefront, it is the most visible part of the shopping process for the customer. The faster and more reliable last-mile services are, the more likely a customer will live a positive shopping experience – and come back for a second purchase.   That’s why larger companies invest in new solutions to meet customer demand for fast and reliable delivery. One example is Mercado libre’s recent investment in planes to allow shipping packages to customers within a single day. But a maneuver like this is far from possible for many businesses. With or without a corporate jet, the hardest part is forecasting the last mile. For instance, in urban areas like Mexico City, deliverers might face volatile customer demand, traffic congestion, blocked routes, labor shortages, trucks at capacity, and rising fuel costs. Many elements play a role in the delivery ecosystem, and the quality of execution depends on accurately predicting demand and potential disruptions.  The current trend for same-day delivery is the most expensive and time-consuming component of the shipping process. According to several statistics, fast deliveries account for approximately 53% of shipping costs of US companies. Resource-intensive processes like 24h delivery are an enormous challenge for smaller companies. But if they can’t live up to their customer’s expectations, they might alienate them once and for all.


To meet modern customers’ demands for fast delivery, companies need to acquire or borrow new technologies and work on improving their entire delivery infrastructure. Each part of the supply chain will affect efficiency and require particular attention when planning logistics.  Logistics companies are currently dedicated to developing new technologies, including artificial intelligence, and experimenting with various delivery models to increase package volumes, speed up delivery, and delight customers. Let’s take a look at some examples of the use of artificial intelligence in logistics to help with optimization.


To optimize deliveries already at the warehouse and their locations, companies can utilize fulfillment technologies. Companies offering fulfillment optimization use artificial intelligence to analyze where stores’ demands are highest and where strategic asset locations can lower pressure on delivery. An intelligent network of urban warehouses to harbor and manage their products helps shorten wages, saving time and transportation costs. 

Last-mile delivery software

The right last-mile software can streamline the supply process, improve visibility into the final supply chain and make it more efficient. A suitable software solution should offer the following features: It uses route and delivery resource optimization, automates vehicle dispatch, tracks package delivery, sends notifications to customers, and can send proof of delivery. Transparency and visibility are essential for the last mile, both for the company and the customer. Having a sophisticated tracking system, the company always records where its goods are. This knowledge can then be passed on to the customer to let them know about their delivery status in real-time.

Click and collect

Click-and-collect is an alternative delivery method where customers select a store near them and a specific time to pick up their purchases free of charge. This method shifts some of the work to customers, reduces the distance traveled and the complexity of the delivery route, and streamlines activities to cut down costs. If the collecting stations are on the way to a customer’s route to their work, this can enhance customer convenience and scale down item returns due to order delays. There are as many needs for optimization as there are proposed ways to solve pain points. That’s why, before deployment, it’s essential to take a step back. What are your eCommerce businesses’ bottlenecks? What are the preferences of your customer base when it comes to delivery? Only those who put their business model to the test and understand their business to the core can draw the most suitable solution from the existing software pool. Are you ready to optimize your delivery system? Cargamos will help you find the best software solution for your business needs. Learn more here.