It’s 1:30 pm. Syafiqah stands outside her storefront, waiting for someone to arrive. Shortly later, a man in blue emerges from a van and walks up to her with a trolley at hand. Relieved that he had arrived on time, Syafiqah goes back to do her remaining work once all of the orders are accounted for and loaded into the van. That van will then be headed to the customs office soon after picking up other deliveries along the way.
Thus begins the first leg of the journey from business to consumer: the first-mile delivery. But...
What does First Mile Delivery Actually Mean?
First mile delivery is the first stage of transportation in the business-to-consumer (B2C) logistics supply chain. This is where the parcel first leaves the merchant’s doorsteps. Merchants could either drop off their goods at specific points such as at the post office or the mailbox or request for logistics companies to pick up their goods from where they were stored. The goods will then be transported by couriers or postal services to the customs office at the airport or port.
Pick-ups and Drop-offs: What's the Difference?
To differentiate pick-ups and drop-offs, pick-ups are offered by logistics service providers (LSP) so that merchants can have their items picked up at their own warehouses or storefronts, which may save merchants’ time and extra effort for delivery. Depending on the logistics service provider, they may have fees for pick-ups, so it helps to look out for these additional fees, or find LSPs that include this service for free.
Drop-offs, on the other hand, are meant for merchants who are willing and able to transport their goods to collection points for LSPs to receive them. This is often the case for larger companies who have their own fleet of transportation vehicles, or for those who prefer not to pay for pick-ups.
Both pick-ups and drop-offs are common in the supply chain industry, and it is most important to choose a method that suits the level of need and viability for your eCommerce logistics supply chain.
Ensuring a smooth first mile delivery is crucial to any international eCommerce delivery, particularly because it sets a precedence for the steps that happen after. This means that the goods will stand a better chance of going through the next stages of the B2C supply chain in a quick and hassle-free manner.
Therefore, while the first mile delivery may not appear as important to customers as last mile delivery in the process of cross-border shipping, it is what determines the efficiency of the transportation of goods from merchants to consumers. Before discussing the best practices of first mile delivery, let’s look at the challenges that are commonly encountered in this step.
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What Makes First Mile Delivery so Difficult?
Like last mile deliveries, first mile deliveries in Southeast Asia also have a set of challenges that may result in a cascade of delays down the line if not handled properly.
In many instances, the largest problem lies in inaccurate or insufficient data for the process to be completed from merchant to consumer. To even begin the supply chain process, merchants have to provide basic details such as the name of the consumer, the end address, and the type of goods that are in the parcel.
When this information is not correctly filled up, the label that is printed for the parcel is incomplete or inaccurate, and could be stopped halfway in the delivery process due to an inability to clear customs. Even if the parcel with the incomplete or inaccurate label gets through customs, it may not reach the end consumer if your last mile partners don’t have accurate information to work with.
Another problem lies in improper packaging of goods. When merchants do not use sturdy materials in their packaging of shipments, they may get damaged along the way. This may result in merchants having to reship their goods, leading to increased costs and possibly dissatisfied customers - which could have been easily avoided with proper packaging.
Furthermore, if low-quality materials are used for labelling, the labels may fall off, get torn, or become too faded to read. As it is not legal for LSPs to open up the parcels to identify items without permission, it would pose a huge difficulty for both LSPs and merchants to track where exactly a missing parcel is in the supply chain.
Another challenge commonly faced in the first mile delivery process is that of overcoming traffic congestion.1 In the urban areas of Singapore and Bangkok,2 traffic congestion at peak hours could cause serious delays in parcel delivery to the airport or the port. For instance, there is an additional 18 minutes of extra travel time per 30 minutes on the road during the evening peak hours of Singapore.3
The possibility of bad traffic conditions have to be considered when scheduling first mile deliveries or it may cause goods to arrive at the customs office after operating hours, thereby leading to a wasted trip when the goods have to be stored at the warehouse until the customs office operates again.
Underdeveloped infrastructure is also a problem to bear in mind when shipping from countries such as Indonesia and Vietnam. It may be difficult to travel between the merchant’s doorsteps and the airport or port. For example, 80% of the district and city roads in Indonesia are in bad condition, while a large disparity exists between urban and rural infrastructure.4 This may result in additional delivery time needed for transportation of the goods in certain areas.
Now that we are aware of the challenges of first mile deliveries which may appear intimidating, what can be done to create a smooth first mile delivery experience?
First Mile Delivery Best Practices for New eCommerce Merchants
Fortunately, you can overcome first mile delivery challenges with the following suggestions in mind:
- Providing Accurate Data,
- Staying Organised, and
- Packaging Shipments Properly
While first mile deliveries may appear intimidating, a well-managed one would be a great start to your B2C supply chain and could reap spillover benefits to the next few stages of the process.
If you’re a new eCommerce merchant, it would simplify things to work with partners who can help you out with your deliveries, especially when it comes to cross-border shipping. To ensure that your shipping process remains smooth, it would be crucial to select the right set of shipping partners in Southeast Asia who can help in organisation and packaging. Here are our suggestions to make first mile deliveries a breeze.
Providing Accurate Shipping Data
If your LSP makes use of digital templates to key in the necessary information for the shipment to be made, it makes things easier for you to ensure that all details are correctly and completely filled up. This is especially so when filling up the name and address portions of the label because it determines where the parcel ends up. If the consumer’s name is wrong or incomplete, it becomes difficult for LSPs to continue with the delivery process.
In addition, be sure to key in the information with a recognisable language on your LSP’s system. For instance, special characters in some languages may not be able to be read. This is to prevent either an immediate rejection by the system, or a rejection after the delivery as already gone through several stages in the process. Phone numbers and zip codes are also valuable data in last mile deliveries, so it is crucial to make sure that they are keyed in correctly before the supply chain process begins.
If you are a merchant making use of your own data-collection system, it would be helpful to have someone dedicated to managing order fulfilment to ensure that the orders are sorted correctly if the process is not automated. This can be done by inputting the client’s shipment information into the shipping partner’s software in a systematic manner to minimise problems having to do with wrong destinations, goods or unrealistic estimated delivery dates that consumers see on their end.
If you have small order volumes, set aside some time in the day where you’re just doing fulfilment. Try to double-check the accuracy of the information you have provided and make changes before you send them in, as changes to the label after initial shipping are very difficult to amend.
If you are a merchant making use of a larger eCommerce marketplace to list your goods, it may be good to look through the type of data the marketplace collects from your consumers. As it is often an incentive for them to obtain as little information as possible from consumers to minimise the hassle consumers go through, they may not always collect adequate details to make the delivery smooth.
In such cases, it would be good to send in recommendations to the eCommerce marketplaces requesting for change in the data-collection system. This would ultimately benefit all parties involved when parcels reach consumers faster, leaving a better review for both merchants and the eCommerce marketplace.
A huge part of staying organised has to do with planning in advance. Your first mile partner's vans are likely to have several destinations and limited space, which means that their drivers need to plan and prioritise their shipments to optimise their routes and van space for each shipment to the airport or port. By having all your order information keyed into your LSP's system earlier in the day, it minimises the chances that your packages would get pushed back to the next pick up due to a late request and insufficient space.
Depending on the LSP, they may have a cut off time for scheduling pick-ups, such as by noon for the deliveries until evening time. Note when pick-ups are closed during the holiday season and plan accordingly to prevent unforeseen delays in shipment. If you have multiple locations, look out for LSPs with a flexible arrangement that can pick up at your warehouse or storefronts so that it makes things easier for you.
Proper Packaging of Shipments
Lastly, packaging your shipments in the right way such that it can survive the delivery journey is key in helping you save money. This is because proper packaging ensures that you don’t need to ship a replacement product if the original gets damaged. In the case your shipments are bouncing around or getting crushed during transit, selecting the correct outer packaging, filler and cushioning material, as well as a strong sealing tape definitely helps to keep it safe.
Additionally, it is also important to use high-quality materials when labelling shipments so that the labels will be able to stick and indicate clearly where they are headed to. This will allow your parcels to clear customs easily and be delivered to the right consumer.
If the paper is of low quality or gets torn along the journey, your LSP may have to reprint and paste the label - but that is only if they are able to identify what parcel it is. In the event they are unable to identify the parcel, the delivery will be discontinued due to its inability to clear customs or have an end address to reach.
Your business’s first mile delivery can be done with ease when working with the right shipping partners whom you can trust. To have a smooth delivery process, make sure to communicate with your partners to provide accurate and complete information, plan in advance, and properly package your shipments. While this list of suggestions is non-exhaustive, it should provide a useful guide for you to start cross-border shipping and expand your eCommerce business in Southeast Asia.
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Interested in B2C Shipping to Southeast Asia? Read more below:
- Industrial Distribution: How Traffic Congestion Affects Your Supply Chain
- The Straits Times: Thailand has world's most congested roads
- Tom Tom: Singapore traffic report
- Structural Policy Country Notes: Indonesia