Happy Wednesday, everyone!
You may have noticed my absence over the past few days as I was unwell. Now that I'm feeling somewhat better, I've decided to sit down and compose the weekly blog. In this edition, I aim to shed light on the terms "first mile, middle mile, and last mile" within the context of logistics. While these concepts may appear straightforward, understanding the fundamentals can be crucial. For small or medium-sized DTC brands, this knowledge will provide a foundational insight into the journey your inventory takes from the factory to the target market or to your own 3PL warehouse. Today's blog is concise yet informative. Let's delve into it.
What is the first mile, middle mile and last mile?
If you were to Google these three terminologies, I'm pretty sure you'd find hundreds of blogs and websites explaining them. I've read some of them, and they are pretty correct and straightforward, so I don't have any debate on this at all. However, from my perspective, if I put myself in your shoes (DTC brand's shoes), it might be a bit overwhelming because every blog or website has a unique definition.
Therefore, I don't want to go ahead and explain the same things for you guys, as it might not bring much value. Instead, I'd like to approach it in a way that aligns with my work and define it from a practical viewpoint.
I want to stand from the international trade perspective, where trading happens outside of one country. For example, as DTC brands, instead of sourcing suppliers in the US, you might be looking to source products from factories located in Asian countries such as China, the Philippines, Vietnam, or Cambodia. Let's take a look below at how the above three terminologies look from this international trade viewpoint.
Let me provide an example to visualize these definitions.
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Imagine you're running a webstore selling women's underwear in the US. Your main shipping method for orders is UPS within the country, and you don't offer internal delivery. To operate this business, you outsource a factory in Shenzhen to produce the underwear under your brand name. You have your own warehouse in Chicago, which is essentially your land, and you've built the warehouse there. Every quarter, you sell around 10,000 units of underwear, making a pretty good profit. This also means that every three months, you need to import a 40-foot container containing 15,000 units from the port in Shenzhen to the port in New York and then have it delivered to your warehouse.
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When the container arrives at your warehouse door, your team unloads it, takes the underwear out, and stores it inside the warehouse. When orders come in from your customers (end consumers) who place orders via your webstore or TikTok, Facebook, or other e-commerce platforms, your warehouse team starts picking and packing the orders based on the data from the online stores. They prepare the orders at the warehouse door.
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Every day, UPS stops by your warehouse and collects all the orders that have been picked. They take them to their sortation centers, and from there, they begin delivering the orders to your end consumers.
View 1: First Mile and Last Mile
Based on the view of simplifying the complex international movement, some folks prefer to split the entire journey into two parts: the first mile and last mile.
The first mile is the journey of the goods from the start (from the factory premise) until the goods are delivered to the warehouse, which could be either the DTC brand’s warehouse or a third-party logistics (3PL) warehouse.
The last mile is the journey of the parcels/orders from the warehouse (either the DTC brand’s warehouse or a 3PL’s warehouse) until the parcels/orders are delivered to the end consumer, who is the brand’s customer.
View 2: First Mile, Middle Mile and Last Mile
Everyone has their own view, and it's not the same for all; some folks would interpret the journey a bit differently. They have the split-up very clear for each journey, so there are three parts for the international movements.
The first mile is the journey of the goods from the factory premise to the port of loading, including all activities such as trucking from the factory to the port and customs clearance to ensure the shipments can be accepted and loaded on board by the shipping line, airline, or express services.
The middle mile refers to the international movements from port/warehouse or airport/warehouse, mainly related to air, sea, or, sometimes, you hear that the goods are on the water/air, intending to mention this middle mile.
The last mile is the journey of the parcels/orders from the warehouse (either the DTC brand’s warehouse or 3PL’s warehouse) up until the parcels/orders are delivered to the end consumer (the brand’s customers).
Final thoughts
Again, this blog is a bit shorter than usual, just a random share of what I found in my daily work recently. The first mile, middle mile, and last mile are not hard to interpret, and what this means to brands is mainly to provide you with the knowledge for your journey of dealing with operations. Not understanding this, I would say it is okay, but understanding this will give you a better idea of how the logistics world operates. That’s all!
See you in the next blogs! Enjoy the rest of your day, all!