Last mile of delivery

One question often asked is why Industrial and Business Parks are becoming so popular in New Zealand's provincial towns. 

Industrial and Business Parks are popping up in large and small towns throughout the country, including Wiri, Cambridge, Tauranga, Te Puke, Longburn, Rolleston, Ashburton and Timaru, to name a few. So, why have Industrial Parks all of a sudden become so popular? Kerry Harford, our Hastings Senior Commercial Property Manager, weighs in. 

One reason could be the "last mile of delivery" phenomenon. In supply chain management and transportation planning, the last leg of a journey compromising the movement of goods from a transportation hub to a final destination is called the last mile of delivery. 

Last-mile delivery describes the problematic last part of transporting people or packages from hubs to the final destination. Transporting goods via freight rail networks or container ships is often the most efficient and cost-effective manner of shipping.

However, goods arriving at a high-capacity freight station or port must be transported to their final destination. This last leg of the supply chain is often less efficient, comprising up to 53% of the total cost to move goods.

The last mile of delivery is often considered the supply chain's most crucial and challenging part. It can involve navigating through densely populated urban areas, dealing with traffic congestion, and making individual deliveries to various locations. The last mile can be particularly complex for e-commerce companies and online retailers who must deliver parcels directly to customers' homes or offices.

Due to the rise of e-commerce and the increasing demand for faster delivery times, the last mile has become a focal point for many businesses. Companies are constantly exploring innovative strategies to optimise last-mile delivery, such as using local delivery partners, implementing route optimisation algorithms, utilising drones or autonomous vehicles, establishing pick-up points, or leveraging crowd-shipping, where individuals can sign up to deliver packages along their routes.

Efficient and cost-effective last-mile delivery is crucial for customer satisfaction, as it directly impacts the overall delivery experience and influences customer loyalty.

Harford believes e-commerce is almost a thing of the past, and Kiwis like to touch, feel, try products on, return them, and hold companies and products to account, which is often hard to do when purchasing products online from overseas suppliers. Harford also believes Kiwis like the convenience of buying a product immediately and engaging with others and that it is part of the “buying experience”. He also believes that social engagement and service, whether in-store or online is critical to the retail experience and that New Zealanders are not yet ready to engage fully in online shopping.

It plays a significant role in the success of e-commerce companies. It has led to ongoing efforts to enhance delivery speed, convenience, and reliability in this final stage of the supply chain.

"Last mile" was initially used in the telecommunications industry to describe the difficulty of connecting end users' homes and businesses to the main telecommunication network. The last "mile" of cable or wire is only used by one customer. Therefore the cost of installing and maintaining this infrastructure can only be amortised over one subscriber, compared to many customers in the main trunks of the network.

New Zealand's two major ports, Auckland and Tauranga, have looked to address this issue by establishing inland ports at such locations as Wiri in South Auckland, Northgate in Waikato, Ruakura Super Hub in Hamilton, Longburn in Palmerston North, Rolleston and Timaru.

With the growth of e-commerce and online shopping, distribution hubs, transport and logistics centres, and courier bases are becoming increasingly common as freight and parcel distribution for that "last mile" is becoming a huge business.

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