Why more ecommerce companies are using last mile delivery services

More ecommerce companies are using last mile delivery services because they help deliver items to clients quickly and reliably, without needing to manage it in-house.

For ecommerce businesses, making a sale is a big achievement. The thing is, the sale doesn't really end at checkout. It ends when the order arrives on time and in good condition to exactly where it needs to be.

The problem is, reliable transport can be hard to come by. Traffic, drivers and complicated delivery networks can be incredibly stressful to manage in-house. Which is exactly why so many online businesses are investing in last-mile delivery support.

At SFI, we see this first-hand. Brands can have a brilliant website, strong products and a great marketing strategy, but if delivery falls short, that is often the part the customer remembers. For many ecommerce companies, working with an experienced commercial logistics partner is no longer a nice extra. It is becoming an important part of keeping customers happy.

If you're an ecommerce business looking for last-mile delivery support, get in touch with SFI today. We have over 30 years of experience delivering products to customers for ecommerce brands. Speak to the team to see how we can help!

What is last-mile delivery?

Last mile delivery is the final stage of the product journey, where an order moves from a warehouse or distribution hub to the customer’s door.

It's literally the 'last mile' where the product is transferred from the business to the customer.

And whilst it might sound like the shortest part of the journey, it is often the most important. After all, this is the moment where the customer experiences your brand in real life. If products arrive late or broken, it can have a huge impact on your company's reputation.

That is why more ecommerce businesses are starting to look at last-mile delivery as a core part of their business, rather than something to think about at the very end.

What does last-mile delivery actually entail?

Last mile delivery involves a lot of logistics. It includes route planning, delivery scheduling, driver coordination, real-time tracking, customer communication and problem-solving when things don't go to plan.

It also means being on hand to deal with elements like traffic, missed deliveries or homes that are slightly more difficult to access.

But for many ecommerce businesses, last-mile delivery isn't a separate part of their logistics operation. First, they need to pick products from warehouses, pack them and send them out to the right address. If there is a delay or error in any part of this process, it often has a real knock-on effect on delivery.

For some companies, last-mile delivery can also be a more complicated operation than just handing over a parcel. Some furniture companies for example might also include furniture transport and installation as part of their delivery service, which adds an extra layer of logistics. When this is the case, last-mile delivery becomes an even more important part of customer service.

This is why many businesses choose to work with a company like SFI that has years of experience bringing all of these moving parts together into one joined-up system.

Why is last-mile delivery becoming more important for ecommerce brands?

Whether ecommerce brands like it or not, fast delivery is now expected by customers ordering items online. But it's not just speed that they're after.

Customers want clear communication, accurate delivery windows and the ability to track their order in real time. If that experience feels glitchy, it can break down trust straight away.

At the same time, ecommerce has become a lot more competitive. There are now thousands of businesses selling online, and when customers have options, a smooth delivery experience can be the deciding factor.

There is also a long-term impact. Studies have shown that 85% of online shoppers would avoid ordering from a retailer again after a negative delivery experience. (ipsos) That means last-mile delivery is not just about getting parcels out the door, it directly affects retention and brand reputation.

This is why more businesses are investing in stronger e-commerce fulfilment and delivery partners that can keep up with these expectations.

What is the main problem with last-mile logistics?

The biggest issue with last-mile logistics is that it is both expensive and unpredictable.

Despite being the shortest part of the journey, it can account for over 50% of total shipping costs. That is because each delivery involves individual drops, time, fuel and labour, often with variables that are hard to control.

Drivers are dealing with traffic, tight delivery windows, customers being present to accept deliveries and access issues. Failed deliveries, delays and reattempts all add to the cost.

For ecommerce businesses trying to manage this in-house, it can quickly become incredibly resource-heavy. Especially as a company scales, what starts as a manageable process with a few deliveries can quickly turn into a constant operational challenge.

This is why many brands choose to outsource their last-mile logistics, allowing them to focus on growth while a specialist company handles the final mile.

The pros and cons of managing last-mile delivery in-house

Managing last-mile delivery in-house can work for some businesses, but only in specific situations.

Some of the pros include:

It gives you full control. You can manage your own drivers, be fully in control of the delivery experience and build processes that align closely with your brand.
You get full visibility over the process throughout, so you can manage customer communications quickly.

Some of the cons include:

You need significant investment. Vehicles, drivers, routing systems, insurance and teams to manage operations all add up. It also becomes harder to scale, especially during peak periods when demand spikes.
Lack of flexibility. When you outsource logistics, you can scale delivery up or down as much as you need, without carrying the cost during low seasons. You also get access to expert systems, routes and logistics teams who have a lot of experience doing what you need.

At SFI, we often work with businesses that have reached the point where in-house delivery no longer works for them. By combining ecommerce fulfilment, warehouse management and last mile delivery, we help make your operations simple.

Get in touch with the team today to see how we can help.

Is last-mile delivery expensive?

Yes, and often more than businesses expect.

The last mile is normally the least efficient part of the supply chain, which is why it carries such a high cost per delivery. Every delivery needs a lot of time, coordination and resources, especially in urban areas where traffic and access can slow things down.

There are also hidden costs to consider. Failed deliveries, returns, customer service queries and delays can all impact margins.

This is why many ecommerce companies are not just looking to reduce delivery costs, but to manage them more effectively. Working with a specialist logistics company can help spread those costs across a more efficient network, helping you supply a great service whilst maintaining profitability.

If your delivery costs are starting to increase, SFI can help you build a more efficient approach to fulfilment and last mile delivery.

When should ecommerce businesses outsource last-mile delivery?

For many businesses, it is time to outsource last-mile delivery when order volumes increase and internal teams start to struggle. Deliveries start to take longer, customer complaints rise, and teams spend more time reacting to problems than focusing on growth.

It can also become an issue during peak periods. Seasonal spikes, promotions or quick growth can quickly expose gaps that need to be fixed.

Expanding into new regions is another trigger that we regularly see. Delivering consistently across big regions requires a lot of planning that is difficult to build quickly in-house.

Outsourcing at the right time means businesses can stay ahead of these challenges, rather than constantly trying to play catch-up.

How SFI supports ecommerce last-mile delivery

At SFI, we support ecommerce businesses with all elements of logistics, not just last-mile delivery.

That means handling everything from storage and inventory through to pick, pack and dispatch and final last mile delivery. By being on-hand for every stage of the process, we help create a smoother experience for your customers.

If you are looking for a commercial logistics partner that can support both fulfilment and delivery, speak to SFI about how we can help.