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Shippers are paying more for "last mile" deliveries

An exclusive LM survey finds that although it's costing them more, readers are generally satisfied with residential services.

By James Cooke -- Logistics Management, 9/1/2004

Shippers may be paying more in extra fees this year for so-called "last-mile" deliveries, but they're generally pleased with the level of service that parcel and express carriers are providing. That was just one of the findings of an exclusive survey of Logistics Management readers who are using express carriers for residential deliveries.

As online retailing has grown in recent years, carriers have been expanding their services for delivering packages to consumers' doorsteps. Despite the challenges associated with covering that last mile—including frequent stops, traffic congestion, and costly return trips when residents aren't home to receive a shipment—virtually all of the 275 respondents said they were satisfied with parcel carriers' performance.

Fifty-eight percent of the respondents said they were "very satisfied" with home-delivery services, while 48 percent described themselves as "somewhat satisfied." Only 1 percent said they were not satisfied.

Those are impressive numbers considering that respondents also said they like to spread that business around. The majority of shippers in the survey—59 percent—said they relied on two or three carriers for last-mile deliveries; 15 percent used four or five; and 18 percent used more than five carriers. Only 8 percent said they gave their business to one carrier.

Given the steady rise in fuel prices, it was no surprise that most respondents reported higher rates for last-mile deliveries. A full 90 percent, in fact, said their rates had increased due to higher fuel costs this past year. Respondents also said that they're paying more to reach household consignees. Some 58 percent of respondents reported that their express carriers had imposed additional fees this year for home deliveries.

The survey data substantiated that last-mile services are being used primarily to serve consumers. Eighty-five percent of the respondents noted that they are making more deliveries to residential homes than to businesses this year. Despite this increase in household shipments, only 19 percent of the survey takers said they've encountered more problems with residential deliveries than they have with business deliveries.

Finally, Logistics Management readers noted that the last-mile market has become more of a priority for carriers. One-fourth of the respondents reported that service levels had increased compared to last year. Another 60 percent said service levels had remained the same, while 15 percent reported a decline.

The survey was conducted by Reed Research Group and was co-sponsored by DHL. For a copy of the full results, go to www.logisticsmgmt.com/dhl.

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