Construction industry supply chains are strengthening their last mile delivery capabilities in response to customers who are more and more demanding. Customers expect work to be performed more quickly, accurately, and with higher quality than ever before. As a result, construction businesses are constantly searching for ways to streamline processes and add efficiency to their operations. [Guest post: Greg Harris]
One important means of accomplishing this is by solving the last mile delivery problem. As job sites increase their dependence on just-in-time material delivery, the demand for getting construction materials from the distribution center to the construction site is greater than ever. However, with a last mile delivery industry set to swell to $51 billion by 2022, few delivery services have the infrastructure in place to satisfy client needs.
This article looks at the unique challenges last mile delivery presents to the construction industry. and shows how specialized third party logistics (3PL) providers can help construction companies maximize profits.
Increased Cost of Materials
Construction businesses must do everything they can to keep their project within the budget. However, the last mile problem has the potential to throw a wrench in this, as statistics indicate that the last leg of a material’s journey can account for up to 53% of the total shipping cost.
To help mitigate these costs, some project managers elect to send team members to warehouses or distribution centers to pick up materials. While this method is not without direct costs itself, its major drawback is that it removes skilled workers from the construction site by turning them into supply “gophers” — a suboptimal use of their talents and pay grade.
How 3PL Can Help: Specialized third party logistics companies are skilled at handling a diverse array of order sizes and material types, adding efficiency to last mile delivery that can result in cost savings.
Slow Service that Causes Construction Delays
In addition to the generally high price tag associated with transporting construction materials along the last leg of their journey, there is also the ever-present threat that the project could get delayed while waiting on construction supply delivery.
Statistics show that up to 63% of time spent on mega-construction projects is spent on activities other than construction, with waiting on materials and supplies to reach their final destination one of the key drivers behind this inefficiency. Obviously, this downtime has the potential to cause construction delays, which are a major threat to cut into company profits. Some of the costs associated with construction delays include:
- Dissatisfied clients that may want to negotiate refunds for their time spent waiting
- An inability to start subsequent projects
- Construction blockers that may require the rescheduling of contractors on short notice, likely at an elevated pay rate
- Paying team members to wait as opposed to paying them for their skilled craftsmanship
How 3PL Can Help: Specialized 3PL companies integrate their software to mesh with the changing needs of the construction site, allowing for the streamlined, on-demand delivery of construction materials to ensure that projects are never left waiting.
Incorrect and Missed Deliveries
Last mile delivery can be slow and costly even when there are no major issues along the supply chain. However, these challenges are compounded when an actual problem arises, causing the delivery to be late, in the wrong location, in the wrong quantity, or to not arrive at all.
In fact, it is common to hear concerns from construction industry professionals who rank incorrect or missed deliveries as the greatest challenge in the realm of last mile delivery. This is because a host of issues need to be addressed to meet this challenge. Some critical last mile logistics issues that can botch the entire delivery include:
- Not having a transportation fleet able to deliver in the correct quantities
- Using Google Maps or other general navigation app that is not able to locate the address of new construction sites
- Dropping off shipments at the wrong location in a construction site and communication breakdowns, leaving project managers unaware that their materials have been sitting on-site for an extended period but not used
- Working with inexperienced couriers who do not have the necessary clearances to pass into secure construction areas
How 3PL Can Help: Modern 3PL firms use auto-dispatch technology to connect with project managers, and optimize delivery times and routes for hard-to-reach areas of construction sites.
Trouble Tracking Shipments
Even for delivery services that have apps and in-app tracking, it can be frustrating for users to see the “Out for Delivery” status that lingers indefinitely. This can cause project managers to believe that delivery is more imminent than it actually is, causing them to move around daily priorities in expectation of receiving materials that are actually hours away.
How 3PL Can Help: By giving clients an honest estimate of the delivery time frame and providing automatic, app-based updates along the way, 3PL can help construction businesses remain firmly on track with their construction schedules.
How 3PL Can Help Construction Businesses Handle Last Mile Delivery
Last mile delivery is a booming industry in the United States, with few firms capable of handling the delivery needs of clients. Specifically within the construction industry, last mile issues can lead to increased cost of materials, slow service that leads to construction delays, incorrect and missed deliveries, and trouble tracking shipments. By choosing to partner with a leader in 3PL, construction businesses can avoid these perilous last mile pitfalls and maximize profits.
Author Bio:
Greg Harris (gregharrislogistics@gmail.com) is a freelance logistics and B2B writer. He specializes in writing about topics related to logistics & supply chain management, last mile delivery, and third party courier services.