Data shows a last mile that is moving past 2021’s supply chain chaos

The last mile is improving, but its on-time performance is still short of pre-pandemic performance. That is one of the key takeaways from project44’s State of Parcel report for April.

The monthly report also found that fulfillment, transit and click-to-deliver times have remained stable and are still below peak-season benchmarks, and that shippers are increasing the number of carriers in their networks as they seek to diversify.

“On-time performance has improved [year-over-year],” the report, authored by Josh Brazil, director of supply chain data insights for project44, noted. “It has not returned to pre-COVID levels, however we do continue to see improvements with a 2% increase in April compared to April 2021 and a 1% increase compared to March 2022.”

Carrier on-time performance trends up

Carrier performance has improved in three consecutive months, reaching 83.94% in April compared to 72.62% in February. In three of the past four months, on-time performance has been higher than the year-ago period.

In a separate webinar earlier this month on the State of the Last Mile, Jenny Bebout, global leader of last mile solutions at project44, said on-time performance was around 90% prior to the pandemic, “but we still haven’t recovered.”

The Southwest and Midwest have seen the biggest improvements in on-time performance, rising from below 70% in February to nearly equivalent to the other regions in April.

The on-time performance metric is important for retailers, explained Bart De Muynck, chief industry officer for project44.

“Retailers are focused on net promoter scores and customer satisfaction scores as those are direct [impacts on consumer satisfaction],” he said during the webinar, noting the challenges the last mile has faced recently.

“We have seen incredible growth in the last few years in the last-mile movement accelerated by the pandemic,” De Muynck added before pointing to the headwinds the industry is facing, specifically increasing rates and fuel surcharges.

Transit time drops

Transit time for packages has also remained steady since reaching 3.23 days in December. It dropped to 2.91 in the last days of 2021 and has steadily dropped on a weekly basis, save for a single-week climb in the middle of February, to the current 2.46 as of April 27. During the week of Feb. 9, transit times dropped to a low of 2.25 before jumping the following week to 2.59. They have remained between 2.43 and 2.53 since.

Of note to e-commerce customers is the click-to-deliver time, which measures the time that passes between when the customer hits the buy button and when the item is delivered and includes fulfillment. That has held steady since mid-January. After peaking at 4.92 days the week of Dec. 22, it has fallen slightly to 4.22 as of the week of April 27.

Bebout said that port congestion and worker shortages contributed to a fulfillment time negatively impacting transit times, but the data suggests those issues are starting to work themselves out.

Speedier fulfillment

Looking at just fulfillment time, the data shows a range of 1.69 days in early January to a peak of 1.95 at the end of February. Fulfillment time was 1.8 days as of April 24. It was 1.94 as of the week of Dec. 29.

The other data point of interest is the continuing diversification of carriers used by shippers. Compared to April 2019, there has been a 14% increase in carriers within network with an average of 4.96 carriers today, compared to 4.34 in 2019.

On the webinar, Bebout said project44 has seen growing interest from retailers looking to diversify their carrier base.

“It can take months to integrate a new carrier … so this data is typically lagging. I think there is more work to be done here,” she said.

 Click for more articles by Brian Straight.

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Source: freightwaves - Data shows a last mile that is moving past 2021’s supply chain chaos
Editor: Brian Straight