Aaron Rodriguez explains the importance of the "last mile" in eCommerce

The so-called “last mile” is becoming increasingly important within the supply chain, due to the momentum of eCommerce during the last two years of the pandemic. Aaron Rodriguez, an eCommerce expert, has been focused on the sector for some time now. That knowledge has led him to explain why the last mile is of utmost importance for its continued development.

Data from the close of 2020 shows that Panama alone accounted for approximately 18% of total new eCommerce sales in Central America during the first year of the confinement. eCommerce in Panama grew by approximately 40% last year.

Panama was the eCommerce market with the highest proportion of retail sales in the Latin American region, with 8% of the total, according to the América Retail website based on data from Statista Digital Market Outlook. These data added that the eCommerce market in Central American countries reached US$ 3.7 billion last year.

“In logistics, the last mile is part of the stage that goods go through from the warehouse to final delivery,” Rodriguez explains. “It is the last leg of the supply chain that ensures products are shipped directly to the customer, and it concentrates a significant fraction of the costs.”

According to Rodriguez, more and more people prefer shipping to their homes rather than shopping in physical stores. And under this scenario, the time offered to the customer for the delivery of their order and the fee charged for shipping are two critical factors for the online purchase decision. This is why online retailers must be increasingly effective and efficient in the last mile.

Additionally, last-mile delivery has become very competitive, with very low margins, so any error or interference could make the business unprofitable. Currently, there are three main aspects that differentiate last-mile logistics: routing intelligence, systems integration (customer-logistics operator), and service experience for the end customer.

Advanced companies not only work on innovating with new technologies and analyzing data that allow them to understand the problems that arise in the operation, make diagnoses and propose improvements, as well as anticipating future events or sudden changes in demand to deliver a good service to customers.

They are also giving increasing importance to last-mile solutions and improvements. For example, major retail players already have a large part of their processes and data in cloud services such as Amazon Web Service (AWS) or Google Cloud Platform (GCP), advancing in digitization. Other companies are contributing with logistics planning tools, improving the efficiency of the routes to be taken by vehicles.

Rodriguez affirms that a memorable shopping experience not only means that the site or app from where the consumer buys looks beautiful and optimized and is fast and easy to use, but also that the promise of each brand, regarding price, availability, and delivery times, are fulfilled. “To achieve this, it is key to connect front-office experiences with back-office logistics and billing support processes. It is worth noting that among the main reasons for dissatisfaction in the eCommerce channel are receiving the wrong order or in poor condition, late deliveries, or not knowing the status of their order,” he added.

Challenges facing eCommerce companies include improving warehousing capabilities, order picking and packaging, increasing visibility throughout the supply chain, incorporating performance indicators and increasing flexibility in delivery times and locations. Several firms around the world offer specialized services to efficiently support the logistics processes of online stores through courier services, cash on delivery (COD), fulfillment and motorized under-delivery services.

“Certainly, the proliferation of online businesses in all sectors is one of the biggest challenges in logistics management today,” Rodriguez asserts. “For this reason, the logistics sector has sought to adapt to new market trends, thus creating effective terms and development methods such as the last mile for eCommerce companies.”

To meet the needs of this process, realistic objectives must be set, as last-mile management is often one of the most costly and complex phases to achieve within the supply chain, along with eCommerce stock management. The ways of managing the last mile in an eCommerce vary depending on the needs present in the supply chain that the online business manages. This implies that the last mile logistics management of an eCommerce could cover different types of chains.

About Aaron Rodriguez

Aaron Rodriguez is an expert eCommerce consultant in Latin America. He helps businesses throughout the region optimize all of their eCommerce operations to increase sales and retain customers, and also has extensive experience in the development of strategic and external alliances to promote departmental and organizational objectives. He has traveled extensively throughout Latin America to assist a number of companies and, when he’s not traveling, he dedicates all of his available time to his wife and children.

Contact Information

Aaron Rodriguez

Latin America eCommerce Consultant

Aaron Rodriguez

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