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Originally published on July 17, 2024, updated July 17, 2024
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eCommerce makes everything about the shopping experience more convenient for customers. But to deliver on the promise of consumer convenience, businesses have to tackle a very inconvenient issue: how to handle last-mile delivery.
Last-mile delivery describes the final portion of the delivery process that gets an order to its ultimate destination, often a consumer’s front door.
The last mile is the most challenging part of the eCommerce process for vendors. Moving items from a manufacturer to a warehouse or storefront is comparatively easy and affordable since you can manage the logistics for many items at once, with all of them going to the same place (or a short list of places). But when it comes to the last mile, each order must get to a distinct address.
Those addresses are often distant from each other. Some are in rural areas that are hard to get to, and others are in crowded cities where drivers must navigate traffic delays. That makes last-mile delivery an expensive, difficult problem to solve. Poor routing, failed delivery attempts, and extreme weather can all further exacerbate the issue.
Amazon has long been associated with fast, affordable delivery experiences. To pull that off, it's had to develop some smart strategies for managing the last mile. To consistently achieve an exceptional Amazon last-mile delivery experience, it has implemented a few key innovations:
Amazon’s DDP is a last-mile routing software that uses machine learning to calculate the best possible route and delivery time window for more efficient last-mile deliveries. For humans, trying to determine the best way to get thousands of packages to different addresses in the fastest, most affordable way possible is a daunting task. But that’s precisely the kind of problem sophisticated modern technology is good at.
DDP doesn’t just calculate the best routes for the next day. It can also calculate real-time re-routing based on unpredictable factors like traffic and weather conditions. That adaptability comes in handy when you have a high volume of deliveries paired with high customer expectations. In addition to using DDP for its own deliveries, Amazon also offers it as a product to AWS (Amazon Web Services) customers.
While many eCommerce companies rely on traditional carriers like USPS, FedEx, and UPS, Amazon has invested in developing its own fleet of delivery vans and drivers to handle most last-mile deliveries. That gives it more control over the Amazon last-mile experience for customers, while also presenting an opportunity to work toward its climate goals. The company has over 13,000 electric vehicles in the United States that are enhanced with technology and features to make the delivery process easier for drivers and more efficient for the company.
A relatively recent innovation, Amazon’s Hub Delivery program involves partnering with local businesses to more easily get deliveries out into their community. For Amazon, making deliveries to a few local businesses is less logistically complicated than getting orders out to hundreds of consumer addresses. For small, local businesses, the program is an opportunity for additional income. During slow periods, they can put their existing employees and vehicles to use getting Amazon orders out, adding to their profits in the process.
In addition to the strategies already in common use, Amazon is also investing in more cutting-edge technologies that may come into play soon:
Amazon has been experimenting with drone delivery to make deliveries faster by cutting down on the need for human drivers. While the technology hasn’t yet reached the point of widespread use, Amazon has launched Prime Air in select locations and recently announced FAA approval to expand its operations.
In addition to drones, Amazon is also working on a robotic delivery method that’s lower to the ground. Amazon launched Amazon Scout, an unmanned electric delivery robot in 2019. While it scaled back the investment in Scout in 2022, it didn’t cut investment in the program entirely. Robotic delivery may yet become part of the overall solution to the last-mile delivery problem.
For Amazon sellers, Amazon’s investment in solving last-mile delivery challenges pays off. If you’re enrolled in Amazon FBA (Fulfilled by Amazon), then you’re benefiting from all of Amazon’s work to develop faster, more affordable delivery techniques. Amazon’s last-mile delivery is data-driven and efficient, which makes it one of the most affordable ways to meet customer’s expectations.
You may not have the budget to explore innovative last-mile technology on your own, but you don’t have to. Sellers of all sizes on the platforms can get the benefit of Amazon’s enterprise-level investment in last-mile innovations. All you have to do is use Amazon for fulfillment.
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