In the transportation, logistics and retail industries, maximizing operational efficiency is key to staying competitive. The middle mile is an integral, yet often overlooked, part of this process. It has the potential to be a major source of savings and improved efficiency – if you have the right partner.
By better understanding how to optimize the middle mile, transportation, logistics, supply chain, and retail decision-makers can take advantage of significant opportunities for cost savings and increased efficiency.
Bill Thayer, CEO of Fillogic, recently sat down with Andy Whiting, CEO of Better Trucks, and Denise McCann, founder of Renegade Logistics, to discuss the importance of focusing on the middle mile. Here’s a clip from that chat and a little more information on why companies need to optimize their middle mile.
More and more companies are looking for ways to cut costs and increase operational efficiency. Many of those companies often look at the last mile, but the middle mile should not be ignored as it has more cost-saving opportunities, especially for retailers.
In order to optimize the middle mile and save on cost while creating efficiencies, there are several strategies to implement:
“US retail networks have been built around the parcel networks, the big players, but realistically, retailers all live, they operate, their stores are in the final mile,” Thayer said. “And being able to have a consolidation or deconsolidation point that you can aggregate [near those malls], that's what wins. So … aggregation is what makes this efficient for everyone [and why we chose to focus there].”
“Historically, last mile, point to point delivery, is a stinker,” said Thayer. “One package, one driver – that’s not going to make anybody any money. If you look at the growth over the last few years, it's all been these big solutions about getting demand, but realistically, that point to point, it's just a loser. However, through aggregation in the middle mile, being able to zone skip into a region or do deconsolidations and use local market delivery partners, harnessing that technology to make that happen, that’s what wins.”
“For a retailer to build an integration with all of these carriers that are out there, [it is costly in price and time],” Thayer noted. “But if you can build an integration with a middle mile provider, which is part of what we do, it allows them to tap into our network. So, in other words, we onboard capacity, we onboard demand, we manage the relationship, and we work with our carrier partners and say, ‘Hey, how can we basically pass our demand through you?’ And it takes this collaborative approach where we're able to grow together and create what we're calling an alternative network.”
Optimizing operations in the middle mile can have a significant impact on a retailer’s bottom line by helping reduce costs while still ensuring timely delivery of goods to their final destination. By taking advantage of consolidation/deconsolidation techniques, aggregation strategies, and utilizing technology for process automation and carrier network and capacity access, retailers can maximize operational efficiency during this key stage of the supply chain management process. With these strategies in place, retailers will position themselves ahead of the competition while improving their overall profitability at the same time.