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According to Forbes, online sales in the USA reached $73.2 billion in June 2020, up seventy-six percent since 2019. Forbes states that experts in the field expect faster growth than in prior years even if the popularity of eCommerce slows post-COVID because consumers are now used to the speed and convenience of online shopping. By the end of next year, America could have 230.5 million eCommerce consumers.
This shift puts a great deal of pressure on logistic managers and supply chains, particularly the last-mile. While the last-mile is the final and shortest segment of the supply line, representing the final destination, it comprises forty to fifty percent of overall logistic costs, requiring the most time, effort, and coordination.
To keep up with the steady increase in demand many brands are permanently implementing new delivery solutions once thought temporary, including the use of local distribution hubs and outsourcing logistic carriers to streamline last-mile procedures.
But as faster delivery times and eCommerce quickly become the norm, the logistics industry is preparing for yet another change.
What comes after the last-mile? "Last-yard".
John Langley, a professor of supply chain management at The Center for Supply Chain Research at Penn State, coined the term "last-yard" in 2019. He asks, has the delivered item created value?
The “Amazon-effect" is in full swing with consumers expecting speedier service worldwide. In some cases, even twenty-four hours isn't fast enough: customers who order groceries online want their perishables to arrive within two hours. And, many logistic providers are striving to meet the call.
But to do so, they have to count on the availability and accessibility of their inventory. Amazon, for example, now depends less on massive warehouses (850,000 square feet and up) and more on regional distribution centers. They use these smaller stockrooms, placed strategically close to the consumer, as “sortation" sites.
With the move to local distribution, the last-mile is transforming into something called the “last-yard".
Supply Chain Dive writer, Deborah Abrams Kaplan, describes it well: “If the last mile is the final delivery leg of a shipment to a business or consumer, the last yard takes the item to where the end-user will use it. Not the porch or the shipping dock, but to the refrigerator, the sales floor, or a specific spot on the manufacturing plant line."
You might be wondering, what does last-yard delivery look like?
Here are two examples:
In a vehicle assembly line, production halts if the factory is missing a part. A logistic brand delivers the repair component, using expedited delivery, to the central receiving area. But there it sits. The last-mile operator did their job but still has the potential to face an unhappy client. What if the logistics provider brought the part directly to the workshop floor?
In the middle of the shop's busiest holiday hours, a delivery worker drops off a shipment of new products. The delivery was successful, but the shelves are not restocked because the sales personnel are busy. The carrier has the potential to add value to the supply line and the goods by restocking the shelves upon delivery.
The second example is commonplace in grocery stores where food distributors not only bring items to the supermarket but also unpack them. John Langley, a professor of supply chain management at Penn State who coined the term “last-yard", told Supply Chain Dive that Frito Lay has been doing this for years "They want to make sure their product is on the shelf where it should be, it's attractively set up... and the out-of-date products are removed..."
Some retailers prefer last-yard, or Direct Store Delivery because it can save them 25% on labor costs.
Would last-yard delivery benefit your office? Imagine if your groceries were not only delivered within the hour but placed within the refrigerator as well.
Given that the last-mile is the most arduous and costly component of the supply chain (shippers stuck in traffic, routing for multi-stop schedules, and the potential for repeat trips when the receiver isn't available) the last-yard brings an even greater level of complication and expense.
Not to worry though, location-based solutions like HERE Last Mile can help logistic managers deliver goods regardless of the distance or the difficulty.
With HERE Fleet Telematics carriers have access to streamlined routing while Mobile SDKs provide them with detailed maps to navigate with ease. More precise task plans help drivers meet ETAs and budget for tolls, travel time, and fuel costs while decreasing overall operational expenses. HERE Last Mile is location-enabled meaning the end-users will have access to real-time tracking making receiving goods even more efficient.
If customers are willing to pay more for things they can actually see happening, like a trackable delivery, imagine the opportunities behind last-yard services.
Start building your last-yard strategy with HERE Last Mile