Last-Mile Logistics: Future of Technology, Automation & AI

The shape of last-mile logistics has been changed by the pandemic more than any other facet of the supply chain.

The COVID-19-sparked ecommerce boom has shown few signs of fading, and the omnichannel retail model is an increasingly important part of many businesses’ logistics solutions. With omnichannel, come new logistics challenges and opportunities. It has made logistics more complex, because the last mile now involves multiple sales channels, such as online platforms, physical stores, and mobile apps.

Logistics providers must handle diverse order types, fulfilment methods, and delivery options. Retailers need excellent inventory visibility across multiple channels, as well as flexible micro-fulfilment solutions to ensure goods can be delivered in good time, often on a postcode-by-postcode basis.

Adaptability and flexibility are the watchwords of last mile, because it’s about being as physically close to as many customers as humanly possible. It’s a challenging, dynamic landscape, and that’s before retailers have even factored in rising operational costs.

Advanced tech – such as AI, machine learning and IoT – plays a vital role here, helping to optimise delivery routes, manage real-time tracking and to enable efficient resource allocation.

“Automation, AI, and other leading technologies can make all the difference, and I am seeing the benefits with our clients,” says Capgemini Global Retail Lead Lindsey Mazza.

She adds that Industry 4.0 technologies in product and supply chain planning processes not only maximise the use of labour, and help companies meet sustainability objectives, but also help ensure that last-mile consumer fulfilment can support optimised costs.  

She adds: “For example, analytics can be used to reduce inventory, identify underperforming areas, and recommend solutions to increase efficiency.

“Using real-time data and intelligent integrated planning, consumer products companies and retailers can customise the right assortment mix, and have the right inventory for each store or channel.”

She also says that autonomous vehicle delivery, although early in development, “could transform the last-mile delivery cost model”. Much-needed urban warehouse capacity is in short supply, as is the labour needed to staff them – but automation is helping ease both issues, says Honeywell.

The ecommerce boom that began during the pandemic is now less a boom and more like the ‘new normal’ for logistics.

But cost inflation is just one of the ‘new normal’ challenges facing retailers and logistics companies. Another is the sky-high demand for warehousing and mico-fulfilment centres to store and ship goods.

This has led to an acute shortage of available warehouse space in urban areas.

To address this issue, companies are looking at storage options that include shared warehousing, or they are outsourcing logistics to third-party providers (3PLs).

There is also increasing pressure on governments to help businesses react to new consumption trends, by investing in infrastructure to support the growth of logistics and warehousing industries.

These are serious operational and infrastructure problems, but there is another, much more immediate and pressing, warehouse problem: labour shortages.

Keith Fisher is President of Warehouse Automation for Honeywell, the US multinational business that specialises in aerospace, building technologies, performance materials and technologies, as well as safety and productivity solutions

Fisher says the labour shortage is the most pressing challenge being faced by warehouse operators, especially across Europe: “Across the continent, the past 12 months have seen a decrease in workforce availability across all industries, with the warehousing and logistics sector being one of the most at-risk.”

In the UK alone, 86% of organisations are experiencing staff shortages in warehousing, according to The Chartered Institute of Logistics and Transport. Like Mazza, Fisher says a saving grace for warehouse operations has been automation: “Not only is automation meeting the growing demand for faster order fulfilment, driven by consumer expectations amid the rise of e-commerce, but it is also being used to gaps caused by labour shortfalls.”

Fisher cites “intelligent automated sortation equipment” as an example.

“This is enabling many companies to offset labour shortages,” he says. “Sortation technology boosts efficiency by combining items from multiple locations, to improve order processing time and accuracy.

He says it also “quickly directs products to proper staging and shipping lanes”. Fisher also says that autonomous mobile robots (AMRs) are emerging as another invaluable asset for warehouse operators.

He says: “AMRs can easily be integrated into existing operations to transport products efficiently through the warehouse on non-linear paths. This cuts reliance on staff to push loaded carts or drive or forklifts, freeing up capacity for other tasks.”

Fisher believes this collaborative approach to automation tech is the gold standard when it comes both to easing warehouse labour issues, and the pressing need for lightning quick last-mile logistics.

“It is the ideal way to use these emerging technologies. It reduces repetitive tasks that are not the most effective use of people’s time.”

So, although last-mile logistics is an increasingly testing area for companies, they can at least draw upon ever-improving technology to help them meet these challenges.