E-commerce makes everything about shopping more convenient for shoppers. But to deliver on the promise of convenience for shoppers, companies have to tackle a very inconvenient problem: how to organize last-mile delivery.
What is “last-mile delivery”?
Last-mile delivery is the final part of the shipping process, in which an order is delivered to its final destination, often at the customer’s door.
The last mile is the most challenging part of the e-commerce process for sellers. Moving products from a manufacturer to a warehouse or store is relatively easy and affordable because you can manage logistics for many products at once, all going to the same location (or a short list of locations). But when it comes to the “last mile,” each order has to go to a separate address.
These addresses are often far from each other. Some are in rural areas that are hard to get to, while others are in crowded cities where drivers have to overcome traffic delays. This makes last-mile delivery an expensive and intractable problem. Poor routing, failed delivery attempts and extreme weather conditions can further exacerbate the problem.
How Amazon is solving the last-mile delivery problem
Amazon has long been associated with fast and affordable delivery. To achieve this, it has had to develop several elaborate strategies to manage the last mile. To consistently deliver exceptional last mile delivery quality, Amazon has introduced several key innovations:
AWS Dynamic Delivery Planner (DDP)
Amazon’s DDP is last-mile routing software that uses machine learning to calculate the optimal route and delivery time for more efficient last-mile delivery. For humans, trying to determine the optimal way to deliver thousands of packages to different addresses in the fastest and most affordable way is a daunting task. But this is exactly the kind of task that modern technology is good at.
DDP doesn’t just calculate optimal routes for the next day. It can also calculate route changes in real time, taking into account unpredictable factors such as traffic and weather conditions. This adaptability comes in handy when you have a high volume of deliveries and high customer demands. In addition to using DDP for its own deliveries, Amazon also offers it as a product for AWS (Amazon Web Services) customers.
Amazon delivery vans
While many e-commerce companies rely on traditional carriers such as USPS, FedEx, and UPS, Amazon has invested in building its own fleet of vans and drivers to deliver most of its goods at the last mile. This gives the company better control over the delivery process for Amazon customers and also helps it meet its climate goals. The company has more than 13,000 electric vehicles in the U.S. that are equipped with technology and features that make the delivery process easier for drivers and more efficient for the company.
Amazon Hub delivery
The Amazon Hub Delivery program is a relatively recent innovation, and it involves partnering with local businesses to make it easier to deliver to their communities. For Amazon, shipping to a few local businesses is less logistically complex than shipping orders to hundreds of consumer addresses. For smaller local businesses, this program is an opportunity to generate additional revenue. During slack periods, they can use their employees and vehicles to deliver Amazon orders, increasing their profits.
Amazon’s future innovations in last-mile delivery
In addition to the strategies already in use, Amazon is investing in more advanced technologies that may be coming soon:
Prime Air
Amazon is experimenting with drone delivery to speed up the delivery process by reducing the need for human drivers. While the technology is not yet widespread, Amazon has already launched Prime Air in some locations and recently announced that it has received FAA approval to expand its operations.
Amazon Scout
In addition to drones, Amazon is also working on a robotic delivery method that is lower to the ground. In 2019, Amazon launched Amazon Scout, an unmanned electric delivery robot. While the company reduced its investment in Scout in 2022, it hasn’t completely stopped investing in it. Robotic delivery could yet be part of an overall solution to the last-mile delivery problem.
What Amazon’s last-mile delivery means for sellers
For Amazon sellers, Amazon’s investment in last-mile delivery solutions is paying off. If you participate in Amazon’s FBA (Fulfilled by Amazon) program, you benefit from all of Amazon’s work to develop faster and more affordable shipping options. Amazon’s last mile delivery is data-driven and efficient, making it one of the most affordable ways to meet customer expectations.
You may not have the budget to explore innovative last-mile delivery technologies on your own, but you don’t need to. Sellers of all sizes on platforms can take advantage of Amazon’s enterprise-level investment in last-mile innovation. All you have to do is use Amazon to fulfill your orders.
