Who Will Win the Race to Transform the B2B Last Mile?
B2B buyers who are used to the immediacy and convenience they experience in their personal ecommerce shopping now want the same purchasing experience on the business side. B2B sellers are catching wind of this trend and moving more towards self-service, but the complexities of B2B logistics present some hurdles.
One of the biggest hurdles is the final leg of a shipment’s journey, known as the last mile. Carriers and shippers alike are still trying to figure out how to best service the last stop when it comes to smaller, local freight deliveries.
Delivering same or next day has become the expectation, but it’s making things very difficult for freight shippers servicing the last mile that are struggling to figure out the right strategies for this high-touch delivery process.
Here’s a look at three ways companies are trying to better service the B2B last mile.
Keeping it local
One trend in this space is to put the goods where the customers are. A growing number of retailers are using small warehouses in urban locations to improve local delivery efficiency. Smaller hubs can speed up delivery times, but the downside is the challenge of keeping warehouse and inventory management costs within acceptable limits.
Fortunately, B2B fulfillment processes are improving to enable smaller order sizes and faster delivery windows, rather than moving large amounts of freight between large distribution facilities.
Trucking companies are catching on, too. Schneider National, the second largest truckload carrier in the U.S., has been acquiring last-mile carriers to better serve B2B markets.
A number of startups are looking to meet this need as well, but their impact is yet to be seen. Many have strong venture capital backing, but little or no relevant freight experience.
Turning to tech
There are too many variables for technology to fully solve the challenges of B2B last mile delivery, but it can certainly make inroads.
When implemented well, logistics technologies can offer end-to-end solutions and create a delivery experience akin to B2C. In fact, B2B customers are already enjoying standard B2C conveniences like fast and easy ordering, delivery status info, and conducting transactions on any device. On the fulfillment side, order management tools are streamlining processes there too.
Although the complexity of B2B sales presents challenges, the B2B purchasing environment is steadily moving toward self-service. But the challenge of implementing last-mile distribution strategies that take into account the more complicated delivery process still remains. A start is being made with technological solutions that support planning and load optimization, resulting in fuller trucks and fewer trips, especially during times of high demand.
Experimenting with the sharing model
This discussion wouldn’t be complete without mentioning the sharing model popularized by rideshare company Uber.
B2B logistics is still largely traditional, but there are companies trying to make the sharing model work for B2B delivery. Carriers like uShip and Uber Freight utilize a sharing concept that can make deliveries of larger items like vehicles and furniture — or any delivery requiring specialized equipment or capabilities — more cost-effective.
One of the selling points of these types of crowdsourcing and sharing platforms is the elimination of the middleman via a dashboard that allows shippers and 3PLs to get a quote and build a load.
The B2B last mile represents a huge, untapped opportunity for shippers to provide better service to customers, as well as for carriers and 3PLs to develop in new markets. It will be interesting to look back in five years and see what has changed and which companies have seized the advantage in transforming the B2B purchasing and delivery experience.