As retail has expanded beyond traditional brick-and-mortar storefronts into direct-to-consumer deliveries, so too has the challenge for retailers who relied on the traditional three-part supply chain model. As defined by DC Velocity, this includes:
First Mile: Transportation of the product from the manufacturer to the middle mile, where it is then further distributed downstream.
Middle Mile: Products received from multiple upstream partners are sorted for transportation to the last mile.
Last Mile: The last leg in the product’s journey to its final destination, which is the customer.
The middle mile can involve multiple modes of transportation (rail, ocean, air, truck) to deliver products from the source to distribution centers and/or fulfillment operations for packaging and sortation of parcels prior to arrival at a carrier for last mile delivery. Due to this, retailers often hand off middle mile supply chain operations to third-party logistics (3PL) service providers. Although outsourcing the transportation piece to a 3PL might deliver both cost and time savings, using a 3PL for parcel sortation may not.
That’s because, depending on the 3PL and the number of customers it is serving from any given location, sortation may not be handled as expediently as possible. Particularly with the significant uptick in e-commerce, which eMarketer predicts will reach $933.30 billion in the U.S. in 2021 – up 17.9% year over year – and representing 15.3% of total retail sales.
With more retailers outsourcing their middle mile activities to 3PLs, they also sacrifice control over the rate at which their customers’ parcels are sorted. This increases the chance of packages arriving at a carrier’s warehouse for last mile delivery to the customer later than the agreed upon service level agreement (SLA). And a delayed delivery can result in an unhappy customer.
An alternative is for retailers to consider establishing one or more designated sorting facilities, separate from their warehousing and distribution centers. Dedicated solely to sorting packages prior to routing to last mile carriers, these facilities can be built specifically to handle both the most common package dimensions and weights at the optimal throughput rates.
With a retailer gaining complete internal control over both source and destination facilities, greater efficiencies can be obtained. That’s because maintaining ownership over package sortation in the middle mile ensures that orders are routed to the last mile carrier faster, while cutting overall customer delivery times.
Let DCS help you expedite your last mile deliveries with middle mile sortation solutions. Connect with us.
Satyen Pathak, Account Executive, firstname.lastname@example.org
As an SME in material handling, Satyen has an extensive background in creating solutions for the retail/e-comm, Parcel, Post, and baggage handling market verticals. He has worn several hats including Product Management, Applications Engineer, Technical support and most recently as an Account Executive with DCS. Satyen has conducted numerous educational speaking engagements and has sat on committees for MHI.