Why Should You Develop a Middle-Mile Shipping Strategy?

Aug. 12, 2022
People often talk about the last mile in logistics, but the middle-mile stage is just as important for ensuring goods get to their destinations on time. Here’s a closer look at why logistics leaders should create middle-mile strategies.

In logistics, the middle mile encompasses what happens when parcels move from warehouses to distribution centers. There have recently been many discussions about how to get goods to customers as quickly as possible. Sometimes, that means establishing and managing microdistribution centers comparatively closer to where customers live. It might also involve using drones or other speedy forms of transportation. Those things are important but mostly center on last-mile delivery, the final phase.

In contrast, middle-mile strategies relate to transporting goods from warehouses to distribution centers. Many logistics leaders now realize how focusing on this part of the delivery chain gives them meaningful results.

Middle-Mile Delivery Has Automation Potential

Many decision-makers are particularly interested in how automation might help them reduce their dependence on manual tasks and error-prone processes. Some have found compelling ways to rely on automation during middle-mile deliveries.

In one case, Walmart launched a trial leaders believed could cut middle-mile delivery costs in half. It involved using self-driving trucks to bring goods closer—but not all the way—to the consumers who purchased them. At the time, Walmart used a hub-and-spoke delivery system. The CEO of the company providing the automation technology said the middle-mile segment is the most expensive part of the supply chain.

However, cost-cutting opportunities are plentiful. In this case, Walmart’s autonomous trucks repeatedly drove fixed routes. Most of them were already used by human drivers, eliminating the need to create new infrastructure. Plus, since the trucks went along the same travel paths over and over, the chance of mistakes happening was minimal.

In another instance, FedEx Express hopes to start making autonomous middle-mile flights in 2023 using vertical takeoff and landing (VTOL) planes. The system can reportedly pick up 300-500 lb of cargo without human intervention, then deliver it anywhere within a 300-mile network. It’s also notable that, as with the trucks mentioned above, these planes don’t require new infrastructure (e.g., airports or charging points) to operate.

Leaders at FedEx believe this autonomous middle-mile option could be especially valuable in rural areas. In such situations, there may not be enough cargo to justify sending a small conventional plane or a truck. However, the drone-like vehicles used here could be perfect for filling the gap.

A Strong Middle-Mile Strategy Can Boost Efficiency and Cost-Effectiveness

Many people who order things online expect to receive them in a few days or even less. Amazon, one of the world’s largest e-commerce companies, has streamlined every step of its process, getting customers their orders as quickly as possible. It’s a pack-to-order company. Once someone confirms an order, employees pick and pack the respective items. Many of the associated steps are automated.

Amazon has also made tremendous investments in its middle-mile strategy. Much of its attention goes toward creating algorithms that reduce wasted time. Tim Jacobs, the director of Middle Mile Research Science and Optimization at Amazon, said the company’s trucking network alone provides 10 octovigintillion possible routing solutions, which is a number surpassing the amount of visible atoms in the universe.

Parcels move from fulfillment to sortation centers in the most straightforward approach to middle-mile logistics Amazon uses. Then, workers group them by destination for faster processing. However, before the last-mile phase can begin, there’s a final middle mile stage where the packages move from sortation centers to delivery locations. This is where the outgoing parcels receive the final preparations before being put onto the trucks that go to customers’ homes and businesses.

The people working to improve Amazon’s middle-mile strategies often use algorithms and other types of internal technologies to manage the company’s medium and small carriers. Some algorithms repeatedly checked possible transportation routes, weeding out particular options until they found the most cost-effective one. That approach helped the company save on surface transportation needs.

The sheer volume of Amazon’s operations necessitates having a middle-mile strategy. The company offered more than 2 million global deals during its 2021 Prime Days event. Efficiency and trouble-free operations matter, whether during special sales or everyday transactions.

A Middle-Mile Strategy Can Improve Package-Handling Processes

Some companies are focusing on middle-mile logistics to enhance their processes for handling outbound packages. That can reduce errors and, ultimately, speed up last-mile processes. Target is carrying out a pilot that drastically reshapes digital order fulfillment from stores. The retailer’s previous store-to-hub model had workers continually processing digital orders from the back storeroom.

The trial still has store workers picking and packing those digital orders. However, once they leave the stores, those goods go to a new sortation center where they are automatically sorted according to destination. This approach has reportedly boosted Target’s capacity while reducing the touches each package needs before its last-mile journey and increasing efficiency. The company is using proprietary technology from Grand Junction and Deliv to achieve its goals.

This new method allows putting the packages into groups associated with individual local neighborhoods, which makes facilitating their trips to the right homes easier. Target executives reportedly want to couple these middle-mile efforts with last-mile ones. They plan to test how the company’s network of Shipt delivery partners might pick up batches of local orders to deliver them. The new sortation center already allows customers to get all their items at the same time, rather than through staggered deliveries.

Christoph Herzig, director of product management supply chain solutions for HERE Technologies, advocates for pursuing digitization in the middle-mile strategy, as Target has. Herzig explained: “For middle mile, you have similar challenges as we see in the last mile—there is a higher chance that something might go wrong. Stay on top of that and provide drivers with the best possible options for meeting their dock schedules.” He suggested tracking solutions for loading docks and distribution facilities.

The Middle-Mile Logistics Phase Matters

Last-mile delivery gets the goods to customers. However, as this overview shows, the middle-mile aspect of logistics impacts how quickly people receive their items, too. Everything could slow down if things become backed up or otherwise go wrong before the last-mile stage begins.

A company decision-maker need not be associated with a company as large as Walmart, Target or Amazon to get results with a middle-mile strategy. The first step is to determine where weaknesses exist in current operations. After that, leaders are in good positions to figure out the most appropriate ways to enact changes.

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About the Author

Emily Newton

Emily Newton has eight years of creating logistics and supply chain articles under her belt. She loves helping people stay informed about industry trends. Her work in Supply Chain Connect, Global Trade Magazine and Parcel, showcases her ability to identify newsworthy stories. When Emily isn't writing, she enjoys building lego sets with her husband.