Middle Mile Delivery: Trends, Challenges, & Costs Explained

Written By: Rick Bell, Vice President, Strategic Accounts

The middle mile of the delivery process provides a significant opportunity for cost savings and increased productivity, among other benefits. Many retailers have started bringing middle mile logistics in-house to give them better control over their own supply chain. Additionally, retailers are working with fleet management companies (FMCs) to optimize and better track their vehicle logistics and delivery process. Part of adapting middle mile infrastructure includes owning the warehouse and retail facility that the goods are being transported to and from.

Large corporations, such as Walmart, are shifting toward the long-term use of autonomous vehicles to optimize routes. So, what is the middle mile transportation segment, and why does it matter? Keep reading to learn more about middle mile logistics, benefits, costs, and trends.

 

What Is Middle Mile Delivery?

Middle mile delivery is the process of transporting goods from a warehouse or fulfillment center to a retail facility. As the name suggests, middle mile delivery is the center part of the delivery process. It may involve international transportation, going through customs and port storage, or more depending on the route.

The other delivery sections are first mile (transport from the manufacturer to the warehouse) and last mile (transport from the local warehouse to the customer). The last mile is typically the most focused on part of the process because it’s the part of the shipping process that comes right to their front porch. However, all stages are vital to the process, and the middle mile should not be overlooked.

Why Focus on Middle Mile Delivery Logistics?

Many companies are focusing their efforts on optimizing last mile deliveries, and while this is important, the middle mile should not be ignored. If the middle mile becomes bottlenecked, the entire delivery process may suffer.

For example, if a warehouse shipment isn’t ready on time, the truck can’t deliver to the warehouse, and the last mile step is delayed. As eCommerce becomes the preferred method, companies must make adjustments to their supply chain to stay competitive.

Middle Mile vs. Last Mile Delivery

Both the last mile and middle mile transportation stages have their own unique purposes, challenges, and opportunities. However, both can benefit from an FMC to help optimize the delivery process.

Advantages of Middle Mile Delivery

There are major advantages to optimizing the middle mile, which typically starts with bringing this part of the delivery process in-house and consulting with an FMC. In doing so, a business has more control over their shipments and can actively monitor the logistics.

Own the supply chain process

When an organization takes their middle mile delivery process in-house,  they own their logistics end-to-end, including the warehouse, vehicle fleet, and retail facility. This reduces inefficiencies and can help boost productivity because it’s easy to adapt to changes with high-volume demands in the industry.

Reduce costs

Working with an FMC has multiple cost-saving services associated with it, including fleet assessments, telematics and GPS software, safety management tools, fuel-saving programs, and more. Additionally, when a company owns the full middle mile delivery route, relying on a third-party logistics company (and any potential delays) is eliminated, meaning operations can be streamlined, which can further reduce costs.

Gain competitive advantage

It can be difficult for smaller companies to offer similar order fulfillment programs like Walmart or Amazon. With middle mile management, smaller companies can control the whole process, speeding up delivery and allowing them to adapt as needed.

Middle Mile Logistics & Automation

Within the middle mile strategy, both automation and GPS tracking/telematics have become popular technologies to employ. Both of these tactics are innovations that can streamline middle mile logistics, help reduce route inefficiencies and driver behavior, and maximize productivity.

Most vehicles today are connected capable, meaning they have built-in GPS hardware and telematics from the factory, or can easily be equipped with a device. Telematics can track a variety of data points, such as fuel usage, driver behavior, trip data, and vehicle systems information. These data points can be viewed in a comprehensive dashboard and be analyzed for productivity and optimization. Telematics can help reduce route redundancies and driver burnout, save fuel, predict maintenance needs, and more.

Rather than loading and unloading trucks manually, many warehouses use automatic loading systems to complete this task. Depending on the product weight and type, automation can cut down unloading time from 30 to 10 minutes. Automation can create lower operating costs, allow for quicker transport of goods, reduce human error, and increase safety. Truck drivers may be the ones responsible for unloading and loading the trucks, which can be laborious — and potentially dangerous — especially after driving for a long period of time.

If a truck doesn’t have loading or unloading equipment, it may be possible to upfit the truck with this time-saving hardware. An FMC can work with you on your needs and help design and install equipment such as dock ramps, pallet jacks, conveyor belt systems, and more.

The Future of Middle Mile Delivery

The middle mile delivery segment has many exciting opportunities for growth, from route optimization to telematics and automation. More businesses are transitioning to  in-house delivery and working with an FMC to reduce costs, increase productivity, and meet demand. Contact the expert fleet consultants at Merchants to see if your company can benefit from the moving middle mile delivery in-house.