How Accurate & Precise Geofencing Optimizes Last-Mile Delivery

Logistics, transportation, and shipping providers are consistently looking for new tactics and strategies to optimize their last-mile delivery, which is often one of the most critical customer-facing delivery legs in a supply chain.

Last-mile delivery refers to the final movement of goods from a transportation hub to their final delivery destination, such as a residence or commercial building. Businesses that use third-party logistics providers (3PLs) rely on fast last-mile delivery to ensure customer satisfaction, especially in a world where e-commerce giants like Amazon casually offer same-day, one-day, and two-day shipping times.

We’re going to explore how implementing accurate and precise geofencing into your logistics or delivery business can allow you to level up and optimize your last-mile delivery significantly. When last-mile delivery speeds improve, customer satisfaction rises, and repeat purchases become much more likely with loyal buyers.

Although it may not seem like it at first glance, last-mile delivery optimization can have a ripple effect on a company’s bottom line, potentially giving them the boost they need to stay a step ahead of the competition.

The Importance of Data Visibility in Last-Mile Delivery

Data visibility and last-mile tracking are vital components of any optimized delivery strategy and can often make or break a delivery operation. As customers demand more and more from modern businesses, offering full transparency into the last mile is a unique brand differentiator.

When customers can track their package as it makes its way directly to their door, they have peace of mind, the ability to pull up a geographical location of their package on demand, and a greater feeling of control over their delivery. Furthermore, when customers track their deliveries closely, they can see if their last-mile delivery driver is dropping off their package at the correct location. They can immediately notify the last-mile operator of the error if it’s not.

In contrast, the alternative is leaving your customers blind on the final day of delivery and not providing accurate updates or tracking. If a delivery issue or unexpected problem occurs, your business will likely experience increased issues and receive more customer complaints over time.

Last-mile delivery tracking and analytics enable all delivery stakeholders to keep up to date on the following:

• Where a particular order is in its last-mile journey
• When a journey began, or a leg of a journey ended
• Estimated time of arrival (ETA) of the package
• An approximate promised time window for delivery and whether or not the driver is currently on track to meet this delivery time

Implementing a last-mile delivery tracking strategy with maximum visibility into the last mile requires your business to incorporate GPS tools, order management systems, inventory management systems, third-party logistics (3PL) software, and warehouse management systems.

Fortunately, geofences can be an excellent way to get last-mile visibility and last-mile delivery route optimization without investing in expensive software, or an extensive number of additional tracking tools.

How Geofences work in Last-Mile Delivery

Geofences are digital boundaries created around a desired location or geographic area allowing logistics providers and shippers to receive alerts and see when an asset crosses that geolocation boundary or how long they spent within that same boundary.

Geofences can significantly improve the last-mile delivery processes both on order pickup and order drop-off, increasing the likelihood of precisely accurate delivery and leaving customers satisfied.

Last-mile delivery optimization is one of the primary benefits resulting from geofencing technology. When last-mile delivery drivers are en route to pick up an order, instead of having to scan a QR code or push a specific button once they cross the geofence boundary around the pickup location, the geofence can automatically record the arrival. This alerts everyone they are ready for pickup and requires no manual input from the driver.

When dropping off an order at a customer’s location, prior to the drop off. a geofence can be placed around a customer’s location, allowing the delivery driver to drop off their package and mark it as delivered only when they’ve entered a specific geographic zone. This reduces inaccurate deliveries and ensures customers receive more orders on time.

What are the Different Types of Geofences?

Several types of geofences can be used around specific geolocations, including circular, manual polygon, and automated polygon geofences. We will describe the differences between each type and how they compare and contrast.

Circular Geofences

Circular geofences are the simplest and least accurate due to the need for more definition in their boundaries. This type of geofence boundary is drawn by taking a desired geographic location, placing a point, and then creating a geofence boundary of a specific diameter.

Manual Polygon Geofences

Manual polygon geofences are more precise and accurate than circular ones since they encompass a more complex geographic area due to their polygon shape. The problem with manual polygon geofencing is that trained employees and personnel must be available to draw and adjust them on demand, making them time-intensive and cost-intensive.

Automated Polygon Geofences

As their name suggests, automated polygon geofences are automatic geofence boundaries drawn and curated on demand through intelligent algorithms and software systems. These are the most cost-effective and time-saving methods for drawing geofences and are preferred over the circular and manual polygon methods mentioned previously.

The Challenges with Geofences in Last-Mile Delivery

While route optimization has many benefits in the last mile, geofencing solutions aren’t always perfect and can run into several challenges during last-mile delivery.

When a logistics or delivery organization attempts to implement its own custom geofencing technology as a “quick-fix” or “quick-implementation,” some of the problems that can arise include the increased cost of labor for managing geofencing technology, inadequate information from poor-quality data, increased trucking costs, and lost or stolen assets or shipments.

When implementing geofencing technology, especially for visibility and tracking in the last mile, it’s important to utilize proven and tested platforms like Kestrel Insights that can help you avoid common problems and avoid spending significant time troubleshooting your own custom solutions.

How Geofences Improve Last-Mile Visibility

Geofencing can significantly improve last-mile visibility by offering more efficient driver management, accurate delivery times, improved driver safety, better data analytics and delivery insights, and real-time updates on drivers.

When you know each driver’s precise location, and when they enter a specific pick-up or drop-off location, you can more effectively manage your drivers and ensure they’re on the right track. Furthermore, driver tracking can significantly improve driver safety, especially if delivering in unsafe areas.

For customers, geofencing allows them to receive real-time updates on when their delivery is close by and track their packages through the last mile. The data collected from these delivery insights can be used in optimization models and to make business decisions about further adjustments that can be made to grow and increase profitability.

Who Uses Geofences?

Many types of organizations use geofences: logistics providers, shipping companies, and even third-party logistics (3PL) providers.

Freight brokers frequently use geofencing technology to track movements across their supply chains and know when and if an issue occurs in near real time, allowing them to react much quicker than any alternative methods.

Software vendors that produce transportation and logistics software utilize geofencing technology to implement near-real-time alerts, tracking, and increased visibility into the supply chain and delivery networks.

Some Benefits of Using Geofences

Geofencing technology brings a number of benefits to companies and logistics providers that use them consistently.

With properly curated geofences for logistics and shipping applications, some of the direct benefits and improvements include the following:

• Increased data accuracy, tracking, and delivery details.
• Frequency and volume data that allow for analysis and optimization.
• Better business decisions are based on facts and data rather than conjecture.
• Increased shipping speeds and supply chain processing times.
• More satisfied customers with visibility into the last mile.

Best Use Cases for Automated Polygon Geofencing in Last-Mile delivery?

When automated polygon geofencing is used in last-mile delivery, several use cases have benefited most from geofencing technology.

Some excellent use cases for this technology in the last mile include:

• Quickly adapt to unforeseen weather changes, accidents, or traffic.
• Implementing dynamic routing for drivers that enter geofenced areas and recalibrating trips in the last mile for optimal delivery times.
• Notifying drivers and customers of probable delays with adjustable, accurate ETAs.

Optimize Last-Mile Deliveries with Precision Geofencing

Is your organization ready to begin leveling up your last-mile delivery and implementing automated polygon geofencing into your operations? Kestrel Insights has developed precise and automated geofencing solutions that are robust and can significantly amplify your bottom line.

If you’d like to learn more about geofencing and last-mile delivery, or request a demo from Kestrel Insights, reach out to our team today. We’ll be happy to show you what geofencing can do for your business.