Middle Mile Delivery: Trends, Challenges, & Costs Explained

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.

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.

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.

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.

It seems as though automation and artificial intelligence (AI) have touched most industries, and middle mile delivery is no exception. More and more businesses are leveraging the power of data analytics and AI to predict customer demand, optimize routing, and streamline operations.

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.

Another key tool in middle mile delivery is route optimization software, which uses algorithms to calculate the shortest and most efficient delivery routes, thereby saving on labor time and fuel costs.

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.

An all-electric middle mile delivery fleet requires less maintenance because electric vehicles (EVs) have fewer fluids to replace and contain fewer moving parts than gas-powered engines. Additionally, EVs are a more environmentally friendly solution, as their frequent stopping and starting do not produce greenhouse gas emissions.

Incorporating electric vehicles in middle mile delivery is one of the quickest, easiest, and most effective ways for companies and organizations to help reduce their carbon footprint. Benefits include reduced tailpipe emissions, supporting clean energy initiatives, assisting in federal mandates, and improving overall community health with reduced air and noise pollution.

Optimizing transportation routes, investing in renewable energy, and educating employees on sustainable practices are all ways you can help lower greenhouse gas emissions.

Regulatory compliance is a critical component of middle mile delivery operations, which is why fleet managers must be aware of the latest emissions regulations and environmental standards.

• The Advanced Clean Trucks regulation was implemented by the California Air Resources Board (CARB) in order to reduce greenhouse gas emissions and improve air quality. In April 2023 CARB approved regulations that end the sale of trucks with traditional internal combustion engines by 2036. This mandate aligns with the state’s initiative to achieve net-zero carbon pollution by 2045.
• The U.S. Environmental Protection Agency’s Clean Trucks Plan targets reducing emissions that create smog and soot; these regulations will apply to heavy-duty vehicles beginning in the model year 2027.
• New York City aims to cut greenhouse gas emissions in half by 2025 and will transition all light- and medium-duty on-road fleet vehicles to electric vehicles by 2025.
• The U.S. Department of Transportation has been working on guidelines for autonomous vehicle operations.

If you’re ready to elevate your middle mile delivery game, consider the following:

• Route Optimization: Finding the shortest and most efficient routes can save time, increase efficiency, decrease fuel costs, and reduce environmental impact.
• Load Optimization: This refers to packing goods or items in a way that maximizes space and minimizes waste.
• Using GPS and Telematics: The data from your connected vehicles can provide insight into fuel usage, trip data, driver behavior, and much more.
• Implementing Sustainable Practices: Eco-friendly vehicles, such as EVs and hybrids, and optimized routes for fuel efficiency are two of the best ways to introduce sustainability into your fleet.
• Adhering to Regulations and Regulatory Compliance: Fleet regulations are complex and often change, which is why it’s important to stay on top of the latest requirements from the U.S. Department of Transportation, Federal Motor Carrier Safety Administration, and Financial Accounting Standards Board.
• Implementing Driver Training Programs: The best way to save on insurance? Reduce the number of accidents in your fleet. Find a driver safety and training program that can be customized to fit your budget and needs.

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.