Unlocking Efficiency: The Ultimate Guide to Last-Mile Delivery Challenges & Solutions

What is Last Mile Delivery?


The term ‘last mile delivery’ describes the last mile or the last leg of the transportation process, which involves moving goods from a hub or distribution centre to their final destination, usually a customer’s doorstep. Last mile deliveries are the final and arguably the most critical link in the supply chain and are essential for making sure that goods are delivered to customers quickly, accurately and efficiently.

Typically, companies use courier companies, bigger 3PL (third party logistics) companies or their own riders to take the shipments from the collection hub to their respective destinations.

The Last Stretch: Why is Last Mile Logistics Important?

Last mile operations are more closely connected to your customers than you think. Here are 3 reasons why you must make your last mile delivery operations as a top priority:

Help Expand Addressable Market: Your products need to reach where your customers are –be it across your city or across the country. Efficient last-mile logistics will enable you to reach a much wider geographical area and tailor services for diverse urban and rural demographics.

First touchpoint with the consumers: The moment your consumers receive your product is their first physical interaction with your brand. In this entire chain, your products are only as good as your delivery. Which means, if the customer’s delivery experience is sub-par, they will consider your products sub-par too, because they are all tied together in the same experience.

Become a Competitive Advantage: In this digital age, when almost every consumer brand is available online, timely and intact delivery has become one of the biggest differentiators for consumers to choose one brand over another. Having streamlined last mile operations helps you ensure that your customers stay loyal to your brand.

Even though last mile logistics offer significant long term gains, getting it right is the tricky bit. Every business faces unique challenges regardless of the size, segment or stage of evolution.


Challenges in Last-Mile Delivery


Even though last mile logistics offer significant long term gains, getting it right is the tricky bit. Every business faces unique challenges regardless of the size, segment or stage of evolution.

Traffic and Congestion: Navigating through concrete jungles poses a constant challenge in last-mile delivery, particularly in local contexts such as rain-clogged areas during monsoon, diversions due to never-ending construction projects, traffic snarls etc. These factors cause delays, disrupt delivery schedules, annoy awaiting customers and escalate operational costs. This is a challenge that will unfortunately remain in some form or the other, so if you do not find a solution that navigates around these pain points, you will feel the brunt of angry customers quickly.

Unoptimized Routes: Planning routes manually every day is a big headache in last-mile operations. Physically mapping routes based on the orders you receive every day can result in longer travel times, increased fuel costs, and added wear and tear on vehicles. Manual allocation of orders to routes introduces the risk of errors, and as order volumes rise, determining optimal routes becomes challenging. Relying on familiar routes may no longer be the most efficient, potentially resulting in unnoticed fuel cost escalation. If this manual process consumes hours daily, scaling your business quickly and consistently will become a daunting task.

Lack of Real-Time Order Tracking: As soon as a customer places an order, s/he expects constant updates till the order is at the doorstep. However, a lot of businesses do not have the right technology or the right partners to offer real-time updates or live tracking to their customers. If you don’t communicate with the customer to keep them assured about their order status, it will dilute their entire experience with your brand and lower the likelihood of repeat business and word-of-mouth brand building.

Delivery Failures: Delivery failures are when orders fail to reach the end destination (usually a customer’s doorstep). In India delivery failures are a big problem in last-mile deliveries. A lot of orders are not delivered because either the customer isn’t available to receive or the delivery time is missed. It’s not just a hiccup in the process; it also makes customers unhappy and causes issues for the delivery team. Each unsuccessful first-delivery attempt brings about additional expenses; the need to reschedule the delivery, the loss of work hours, and the added distance travelled significantly inflate the overhead costs.

High Operational Costs: The rapid rise in eCommerce, and consequently the number of shipments being sent out daily has deeply impacted the cost of last mile operations. If there is an increase in the volume of orders or the number of serviceable pin codes, but you’re still using manual methods to define your routes, or manage order allocation or calculate rider pay-outs, don’t be surprised if your operations budget inflates alarmingly.



Tech Solutions to Address Last-Mile Logistics Issues


Inefficient management of last-mile execution can severely impact your bottom line, with last-mile delivery costs potentially accounting for as much as 41% of the total supply chain costs. Technology solutions, and specifically logistics technology, can be the game changer for not just managing last mile dispatch but also for increasing long-term efficiency and business scalability. Here are some ways that technology can help in mitigating last mile challenges:

Real-Time Tracking Systems: While many businesses rely on WhatsApp for shipment updates, only a handful provide the ‘live location’ because it is tedious to individually send it to each customer. Alternatively, some businesses send SMS or emails with tracking links, but these often only display the delivery stage without any real-time location information.

Imagine a customer placing an order for an anniversary cake to be delivered the next day, and all she receives is an intimation that the delivery will be done the next day before 8 pm. For a special occasion like an anniversary, timing is everything, because no one wants to receive a cake when the party is over!

People want to know where their orders are from anywhere, anytime, which can only be made possible through technology. From a simple GPS tracking software to RFID and IoT devices, knowing where the shipment is at any given time is a big deal for product categories like fragile items made of glass, temperature sensitive items like medicines, perishable or low shelf-life items like fresh greens, cakes with icing etc.

Real time tracking systems are slowly becoming a key differentiator for retaining customers. Businesses have started to deploy technology solutions that enable real time tracking for the operations team as well as the customers, so escalations and delivery delays are kept to the bare minimum and offer a positive experience to the end consumer.

Typically we have seen at least a 40-50% decrease in customer escalations and calls to customer support after deploying a last mile management solution.

Route Optimization Software: Imagine you have a frozen snacks business which delivers 30 orders a day today. In a month, maybe you will start delivering 70 orders a day. What took you maybe 45 minutes to physically map out the daily delivery routes, may start taking you 2 hours. What if the numbers got to 100 orders a day? How will you scale up your manual effort to keep pace with the surge in orders? Either you will have to hire a new resource to share the workload (which will increase your operational cost but still not be an error-proof option), or you will have to adopt smart technology to identify the best routes.

The Route Optimization module in logistics technology uses algorithms that specifically analyse the universe of destination points and create the most efficient routes, considering factors such as traffic patterns, road conditions, and delivery time windows. The biggest advantage of optimized routes is the huge cost savings that businesses can achieve from Day 1. It also helps manage customer expectations and reduces the likelihood of missed or delayed deliveries.

On average, businesses achieve at least a 30% decrease in operational costs after Route Optimization as compared to before. For many, this particular feature has become a game changer concerning operating a lean team and being able to manage 10x-15x orders with ease.

Data Analytics for Decision-Making: Every business generates a lot of data daily:

How many orders came in from which channel? How many riders are available? How many first attempt failures? How many calls on customer support? How many kilometres travelled? How much cash is collected on COD orders?

All of this data is like a goldmine for businesses. However, data is useful only when converted into actionable insights or tied to goals. Data analytics in last mile delivery can help businesses fine-tune their entire last mile strategy – from identifying gaps in rider productivity to personalizing the delivery experience for their customers, from identifying more efficient routes to enabling OTP-led cash collections, everything adds to efficiency. With such precise intelligence, businesses can tailor their services better, enhancing customer satisfaction and loyalty.

Integration with E-commerce Platforms: Today, almost all businesses have multiple sources of demand like websites, e-commerce platforms like Amazon, Flipkart, Meesho, Myntra etc and social media platforms like Facebook and Instagram. If you have orders coming in from diverse streams, would you want to manage them separately and repeat the order management process for every platform, or would you rather collate them in one place? A technology platform with easy integrations with all demand channels can ensure seamless aggregation of all orders in one place. Creating such a unified logistics ecosystem can help you to manage the entire logistics chain efficiently, from order placement to last-mile delivery.



Pidge’s Last-Mile Delivery Software


Pidge is a logistics SaaS platform that is changing the face of last mile logistics in India, not just for those who need delivery, but also for those who provide delivery. We empower small and medium businesses with technology solutions that help digitise, aggregate and deliver, all through one single platform.


The Pidge Advantage

increase (1) 1


Pidge Omni-channel integrations help you get a better assessment of your demand and hybrid, interoperable networks immediately boost delivery capacity to ensure Zero Unfulfilled Demand.

save-money 2


Pidge gives you AI-driven fleet optimization, real-time order clubbing and order tracking, and accurate COD reconciliation to drive a very tangible increase in productivity and a significant decrease in operational costs.



To increase consumer stickiness, Pidge White-Labelled communication makes your brand stand out for your customers. With real-time notifications and live tracking of order, your customers will rest assured and happy.


The 4 Reasons Why You Should Consider Pidge


Real-Time Tracking with Trace by Pidge: Fleet management is more than just logistics; it’s about staying in control, optimizing efficiency, and ensuring timely deliveries. That’s why Trace, our cutting-edge IOT surveillance module is designed to reimagine how you track your fleet.

With Trace, you can set up real-time alerts for speed violations, idling, and easily
monitor the location of your vehicles on a live map. A user friendly dashboard helps you keep data on key metrics like driven kilometres, hours, and idle time at your fingertips.

One of our customers, a national pharmacy chain used to have a rudimentary solution like sharing WhatsApp Live Location to keep track of where their vehicles were when they were out for making deliveries. A lot of times, the drivers would cite traffic congestion, unclear addresses and other such reasons for reaching their destinations late. Unfortunately, the company had no way to validate these claims nor did it have any control over vehicle movement. With Trace, they are now able to get a minute-by-minute update on where the vehicle is and get notifications if the vehicle is exceeding speed limits or is idling beyond a defined timeframe.

Using Trace also brought down traffic fines by more than 50%. Productivity went up by 45%, which consequently increased the overall delivery experience of the end consumer.

Route Optimization with Pidge: Multiple optimization route recommendation engine (MORRE) powers the Pidge Route Optimization feature. It continually monitors real-time traffic and road conditions, adjusting routes dynamically to account for things like traffic jams, rains, road construction or other such unexpected obstacles or changes. MORRE is designed to handle multi-stop routes, and deliveries with multiple drop-offs while still ensuring route optimization.

A high-end bakery brand had 3 riders who would deliver about 24-30 orders in Gurgaon every day. Within a few months, business grew to 60-75 orders a day. As the last mile operations had become more complex, they switched to Pidge to enable AI-powered routes and crunch down their planning time from 2 hours to only 45 minutes. Now, they have the flexibility to use their own routes, create new routes or use the AI-suggested routes to efficiently manage every single order.

Delivery and Rider Analytics with Pidge: Efficiency and accuracy are the two essential elements of last mile delivery. The Pidge platform analyses historical data patterns of rider/partner productivity, route performance, delivery timelines, and more to derive actionable insights, so businesses can amplify last-mile efficiency and accuracy in delivering packages.

Last year, a home-style meals subscription-box business charted a 15x growth during the festive season and needed 1 extra rider to supplement their delivery capability. Analytics from their logistics tech platform showed that business was already growing at 15x in the weeks leading up to the Diwali season, so they will need to add more than 1 rider and create new routes to fulfil all demand. Using this intelligence, they identified the pin code concentration patterns, devised new routes, channeled more riders to those areas, used 3PL partner networks to bolster their captive delivery capacity and ensured timely deliveries despite the festive rush.

On the Pidge platform, you can access reports on 10+ KPIs including Daily, Week-to-Week, and Month-to-Month analysis, you can gain razor-sharp insights on growing your business.

Secure Collections on COD orders: Pidge’s Cash Management Module is a comprehensive solution designed to simplify and secure the cash collection process for businesses. Whether you have your trusted riders or you rely on 3PL partners for deliveries, our module ensures efficiency, security, and transparency in all cash-related transactions. With Pidge, businesses can confidently manage cash collection, providing a seamless experience for both themselves and their customers.

One of our customers faced big revenue leaks because of a high amount of ‘floating cash’ or unreconciled cash. Riders would collect the money from the end customer, but the reconciliation process with the Ops team was done a few days later. As there were no proper records for how much money was still ‘uncollected’ in the market or which rider had how much cash pending with him, the brand suffered a big loss in revenue.

Pidge Cash Management Module Seamlessly integrates with digital payment platforms, offers dedicated QR codes for digital payments, and gives OTP-led cash collections to ensure transparent and accurate attribution.



Success Stories, Realizing Last-Mile Excellence with Pidge




Empower Your Last-Mile Delivery with Pidge


As they say, “Your product is as good as your delivery”.

Pidge logistics technology helps you elevate your last-mile deliveries and become a catalyst for unparalleled efficiency. With future-ready technology, optimized routes, and customer-centric features to level up your logistics game, Pidge ensures swift, reliable, and customer-friendly deliveries – and a rapidly growing business.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>