Getting any product to the end of the supply chain is difficult with any item but when that product is perishable food, it makes a challenging situation even more complex. This is exactly the issue with tackling the last mile in the transportation of food items.
What is the last mile? Last mile refers to the end portion of supply-chain movements, whether it is from a distribution centre (DC) to an customer’s home or to a restaurant or retail store. This part of the supply chain can be 25-50 per cent of the overall cost of transporting the item! Named last mile, it can be just that but typically can be up to 100 miles depending on location of the DC and end users.
Why is this a hot topic right now? Well, with more and more suppliers skipping wholesalers or retail all together, there is a higher demand for smaller amounts of products to be delivered directly to restaurants and customers’ homes. Now companies are trying to apply traditional transportation to an old challenge that has new technologies driving it. Now tech companies are looking to tackle this and change how we approach the last mile.
Are there specific challenges to look at? Definitely there are three main challenges: speed, cost and food safety. Speed is always a challenge with transport. Everyone wants everything yesterday and working with end consumers is no different -- possibly even more demanding. Also, working with perishable products means that speed is important to shelf life.
Everyone wants to ensure they are paying something fair. However, for the attention that last mile requires, “fair” may come with some sticker shock. Of course when you start adding spots in the supply chain where the cold chain is broken, there will be a food safety concern. However, with new technologies and advancements should come updated science and policies. The amount of food waste due to inaccurate policies is quite concerning but that’s another topic altogether.
Are there new technologies to help? Yes, but adoption can be slow and there are of course still issues that come up. A lot of the technologies think outside the box and encourage consumers to pick up product. Apps such as Ritual people can order lunch or dinner and pick up from restaurants and are rewarded with no line-ups and points to be redeemed on the app. Amazon Fresh, Walmart, and Loblaw have online ordering and people then pick up their groceries curbside or even at a transit station on their way home. Finally, there are apps such as Flashfood that give deep discounts on items that will expire soon, tackling both the last mile challenge and potential food waste.
There are a few companies that are using technology or clever routing and schedules to get food to where it needs to be. Mama Earth’s Organics, for example, is a food box subscription model that delivers to certain neighbourhoods in the Greater Toronto Area on specific days. This ensures they can maximize the number of orders on the trucks in the area. FreshSpoke makes local food more accessible by providing wholesale buyers with the ability to source directly from local food suppliers and delivering to the door using the excess capacity that already exists in the commercial delivery system via an app that connects all the parties.
Marcia Woods, CEO of FreshSpoke says, "Retailers and restaurants are eager to provide their customers with more local food options but conventional distribution doesn't work for local food because it's not designed for the size of these orders which is by the case, not the skid.”
Companies such as Mama Earth’s and FreshSpoke have looked at an old problem with new perspective and it has been successful as they are both seeing growth in the marketplace. New ideas and fresh perspectives will be the only way that the last mile challenge is addressed in a sustainable and economical way. How does your company tackle this part of the supply chain?