Last-Mile Express Delivery: What is it and how can it increase warehouse productivity?

What is Last-Mile Express Delivery?

Last-mile delivery is part of a logistics ecosystem that takes place in three stages:

• The first mile – the distribution process between the manufacturer and the retailer;
• The second mile (middle mile) – depending on the distance between the manufacturer and the trader, this step involves all the necessary logistics process, such as customs clearance, loading and storage in ports, as well as the actual inland transport. If both locations are national, this step is not necessary;
• Last-mile – the process by which the goods leave the merchant’s warehouse or a logistics center directly to the final customer.

Why is Last-Mile Express Delivery Important?

E-commerce sales growth continues. The latest figures from the United States Census Bureau showed how online shopping grew by 7.6% in Q3 2023 compared to the previous year, accounting for 15.6% of all sales. As a result, the demand for last-mile express delivery – the movement of an order from the warehouse to the recipient – is increasing.

Projections from Allied Market Research predicts that the last-mile express delivery market will reach $288.9 billion by 2031. With over 50% of total shipping costs attributed to last-mile delivery, minimizing costs and increasing efficiency is crucial. Therefore, when a logistics center equips itself to support last-mile express delivery, how the shelves are organized can contribute to success in achieving these goals.

With the rise of e-commerce, companies that previously received and shipped goods exclusively on pallets had to evolve. Last-mile express delivery could mean handling small parcels, refrigerated/perishable food, but also larger items such as refrigerators, sofas, etc.

This transition from handling pallets to handling boxes or individual items of all sizes requires a different approach to racking. Many companies do not have the possibility to open other warehouses to adapt to the new requirements, but they can carry out operations to modify the existing shelves in the current warehouses.

How to use shelving to increase storage density

Regardless of the type of transport, all landmarks must be loaded into the truck in a manner adapted to the driver’s route. This requires a separate cargo staging area located between the shipping ramp and the picking areas/packing stations.

A traditional docking area is unlikely to have sufficient square footage for the sorting and sequencing of rapid last-mile deliveries. This means that a logistics center must allocate space to create this staging area. One way to do this is to compress existing storage areas by increasing their density.

There are a variety of solutions available with high density racks that reduce the number of racks required compared to standard racking for picking. Certain types of shelving are better suited than others for different inventory items.

Options include:

• Drive-In and Drive-Through Racks
• Push Back Racks
• Pallet Flow or Carton Flow Gravity Racks

Another option could be to build a mezzanine or fixed industrial work platform on top of the existing shelving, making use of the unused space. This creates a second level in the building. Installing additional shelving in this upper level can also create usable storage spaces where none existed before.

Creation of picking areas

In addition to altering shelf arrangements to enable the preparation of rapid last-mile deliveries, analyzing inventory to ensure optimized storage can help improve the efficiency and capacity of operations.

Performing an inventory analysis will help determine the products with faster stock movements in a warehouse. Slower moving stock items should be stored on the shelves furthest from the shipping area, while fast moving stock items should be located closer to that area for quick and easy access.

This can optimize the picking activity, being a high-intensity process, also representing a high operational cost (approximately 35% of the total costs). By compressing picking activities into a smaller area, you reduce the walking distance of pickers, reducing energy expenditure as well as the injury rate.

Existing picking racks can store inventory to constantly refresh available goods. The product with the fastest stock movements – especially box or part – can be selected directly from the Carton Flow systems. Consisting of roller beds, this system is mounted directly on the existing pallet rack columns. They separate small, hand-loaded inventory into dedicated areas for optimal organization and increased storage density, while improving picker ergonomics and accuracy.

Conclusion

Finally, there are lots of different ways to arrange shelves in a last-mile express delivery operation. The EUROFIT team consists of specialists with extensive experience in helping companies successfully transition from exclusively handling pallets to handling individual goods. Do not hesitate to contact us for specialized advice, perspectives and recommendations for the development of your business.