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The arrival of the 'bers signal a huge change in the strategies adopted by 3PL companies. Are you on the right side of that change?
On a cool October night, Maria and Dan have just finished their dinner. Suddenly Dan gets a call, and while Maria goes to bed with the kids, Dan puts on his bright coloured safety vest. A long and tiresome night has just begun for Dan, who works as a sortation supervisor at a Delivery Service Provider specializing in Final Mile Home Delivery. His company is sub-contracted by a large Third-Party Logistics (3PL) provider who is responsible for the supply chain management of multiple retail clients.
Often called The Lift, this peak period of activity sees one of the most hectic sessions in the logistics sector. For it is during this time that customers go into purchase overdrive – making the most of the offers and discounts aggressively promoted in-store and online to cash in on the holiday season.
It is not business as usual for logistics providers during this phase however, as they often commit to more than they can deliver, in a bid to cash in on a steady torrent of consumer purchase activity. More often than not, the hastiness that such a challenge brings, leads to customers complaining about quality, turnaround time, and a host of other aspects related to products being rushed through the critical Final Mile.
So how do companies make it through this phase? We asked a few industry insiders and here’s the scoop we received.
One of the most important aspects of The Lift is to ensure the reliability of all stakeholders involved in the process of packing, sending, sorting and delivering a product to the customer. A minor miss here and there would lead to catastrophic results including, but not limited to the company even closing operations. Principal among these stakeholders are the Delivery Service Providers and the drivers they employ. If they’re not on the same page, a troublesome experience awaits the customer (and likewise for the logistics company as well).
The Driver and Delivery Service Provider (DSP) – those who handle the Final Mile Home Delivery of items, need to be well educated on the vagaries of this important component of delivery. The two should be in unison about their delivery processes to ensure a satisfying customer experience. Drivers need to be given the relevant training to understand the behavioral patterns of customers and how to communicate effectively during each stage of delivery. While choosing a partner, it is necessary to check that they have all the equipment and procedures in place that they claim to have, before signing on the dotted line. Being battle-hardened in the zone can help ensure the overall effectiveness and accountability of the partner.
With the availability of modern systems and hand-held devices, the work done by logistics providers has become easier, while at the same time increasing in its complexity. The latter takes precedence, since without proper knowledge and implementation expertise covering a number of software and systems, personnel will not be able to cope with the heightened demand associated with The Lift. This can ultimately result in chaos at the worst possible time for retailers and manufacturers entrusting the 3PL to handle this critical component.
Source: EFT - Eye for Transport – Last Mile Retail Study, 2018
With the integration of advanced technologies, customers require greater visibility of their orders. This includes information on the status of their order and possible causes on delay (if any). With customer expectations ballooning as select providers offer same-day and next-day delivery services at a nominal fee, they now expect their orders faster. Combining this with the increased volumes associated with The Lift, the delivery risk component increases. The responsibility to maintain high-order volumes with error-free sortation creates the perfect storm around the heads and minds of Final Mile Home Delivery providers. Catastrophe for some, opportunity for others.
During The Lift, it is essential and mandatory that 3PL providers stick to their standard operating procedures and within the guidelines prescribed therein. This is critical to avoid delivery failure or the dreaded Return to Station (RTS) that accompanies a failed delivery. A heavy volume of purchase activity should not equate to a dip in the delivery experience. It is precisely at this moment customers lean on delivery guarantees promised by their retailer. This responsibility falls back on the 3PL provider, tasked with sourcing the right Final Mile Delivery Services Provider, one that is stress-tested with a track record of peak season integration success. For this very reason, at times 3PL providers hire extra hands-on-deck to ensure the customer experience is consistent with more manageable slower volume periods.
However, getting the extra contingent of Delivery Service Providers to meet the growing demands of customers often leads to a drop off in service quality as contingent staff struggle to internalize standard operating procedures. This in turn has a ripple effect on the home delivery quality experience of a customer. 3PL providers need to ensure that new staff brought in, meet the same delivery quality criteria and procedural adherence, as indicated in their standard operating procedures. It would be pertinent to note here that more often than not, 3PL providers often forget about delivery experiences during the Final Mile segment in an effort to expand volume during The Lift.
The importance of proper measurement of performance such as Net Promoter Scores (NPS), cannot be overstated as it pertains to providing the ideal Final Mile Home Delivery experience to a customer. Tracking performance consistently with a standard measure evaluates Delivery Service Providers on a series of factors which in turn determines their outlook and market performance. It is a known fact that during peak seasons customers do get excited and anxious about products they’ve ordered. This can stem from various factors – from gifting, to taking advantage of time-limited seasonal offers. During appliance deliveries, generally a purchase that is not made frequently, the customer looks forward to the delivery associate explaining the installation procedure and more importantly, following any delivery instructions provided. Adherence and understanding of these guidelines when a customer has a degree of stress about the process, helps ensure a higher satisfaction level and in turn higher NPS (and related) ratings.
In summary, The Lift can be both welcomed and satisfying for the Third-Party Logistics (3PL) provider if planned correctly with strict adherence to repeatable processes that cover each of: Reliability, Technology Integration and Visibility, Standard Operating Procedures, and Measurement considerations.
The onus is therefore completely on the 3PL provider to ensure that while delegating Final Mile delivery to the right Delivery Service Provider, the customer receives a satisfying delivery experience, one that is consistent with the retailer or manufacturer they purchased from. Furthermore, a prompt for feedback directly incorporated into the standard operating procedures is critical to gauging performance.
During the Lift, more often than not, it is through neglect, or omission of any mix of these aspects of Final Mile Home Delivery, that some 3PL providers suffer from decreased shelf-life with their client.