Middle mile logistics: the critical enabler for supply chain resilience
In its latest article, supply chain technology company Zetes explores the logistics landscape and the trends and challenges impacting middle mile success.
Logistics, transport and retail leaders are highlighting the potential of the middle mile in achieving a first-class customer experience and flawless process execution throughout the supply chain. However, the middle mile has long been overlooked, with attention often focused on the last mile in the drive for faster, smarter and more efficient fulfilment operations.
In its latest article, Middle mile logistics: the critical enabler for supply chain resilience, supply chain technology company Zetes explores the logistics landscape and the trends and challenges impacting middle mile success. Explaining how technology and real-time data are key to overcoming pertinent middle mile pain points, it presents multiple opportunities that can be achieved even in uncertain economic times.
- The middle mile typically refers to operations involved in transporting goods from one facility to another, before being picked and dispatched to final delivery
- European ecommerce revenue is expected to have doubled by 2025, from total revenues of 492 billion euros in 2020 to 1.020 billion euros in 2025
- In less than a decade, the 3PL market has expanded by roughly 29% and is expected to follow an annual growth rate of 7% per year to 2027
- The retail technology market size is expected to expand by more than 100% by the year 2026 to create seamless customer experiences
Middle mile context and relevance
The middle mile is often where most logistics execution processes happen, encompassing inbound logistics, inventory management, picking and outbound logistics. The first mile relates to the initial operations (often in a warehouse), whereas the last mile relates to the final step of delivering physical goods to the customer or retail store.
Global trends include labour shortage, growth of 3PL (third party logistics to execute some middle mile activities) and omnichannel logistics, relentless customer demands and emerging tech-based solutions for the augmented workforce.
European ecommerce revenue is expected to have doubled by 2025, including B2B growth. Businesses are shipping smaller quantities of freight more frequently, creating more fragmented networks and driving an increasing number of local agile hubs. Software solutions are increasingly being deployed in retail and 3PL industries to enhance the customer experience, optimise transport operations and drive innovation.
Challenges encountered in the middle mile
Fast expansion of the 3PL industry is making the supply chain even more complex, with more stakeholders and SLAs to manage. The on-going labour shortage of warehouse operatives and lorry drivers, coupled with increased warehouse space and cost of fuel, causes delays and errors.
A key challenge is the ever-increasing need for fulfilment speed, accuracy, efficiency and visibility at a time when costs are rising. Customer expectations include real-time communications, omnichannel excellence and often free, fast delivery and returns. However, diluted transport visibility and control and lack of real-time intelligence in the first mile prevents optimisation further down the supply chain. Without effective process optimisation, the middle mile comprises sustainability targets too.
Middle mile opportunities
Technology and real-time data are critical in overcoming pertinent middle mile challenges and unlocking efficiency. All parties must be able to capture, unify and share data throughout the supply chain for agility and multiple stakeholder collaboration. Scalable technologies including IoT, sensors, AI and machine learning maximise workforce/transport capacity whilst improving performance. This enables end-to-end visibility, optimum labour and asset utilisation, order status updates, inventory intelligence, continuous innovation and much more.
