‍

In online grocery, last-mile delivery is the final step in the supply chain, where a customer's online orders are transported from their end location, such as a Customer Fulfilment Centre (CFC), dark store or retail store, to the chosen customer destination, whether that’s home, click and collect, or unattended delivery. 

For retailers, delivering large orders within narrow delivery slots, while managing traffic issues, fuel use and vehicle capacity (the amount of “stuff” a van can carry), is one of the most challenging parts of running a profitable online operation. Getting it wrong can directly impact customer satisfaction. Getting it right can help win customers and build loyalty.

For many years, Ocado has refined vehicle routing in its own online retail operations. Today, the tools and expertise we built help to power the Ocado Smart Platform (OSP) for grocery partners worldwide, enabling them to run more efficient and scalable delivery networks.

Understanding the last mile

Unlike traditional courier services, where parcels of standard, uniform shapes and sizes can be easily stacked, grocery comes with unique complexity. 

• Orders contain many items, and all of those are highly variable in shape, size, weight and fragility. 
• Delicate items cannot simply be piled on top of one another, or under heavy items.

Each van also has to carry frozen, chilled, and ambient (room-temperature) products. That means “capacity” isn’t only about physical space; it’s about balancing different temperatures and ensuring food quality, freshness, and short shelf lives are maintained throughout the journey. Retailers must coordinate all of these moving parts seamlessly, while still delivering within tight, narrow windows.

At the same time, shoppers expect total flexibility in how and when they receive orders. Today, “convenience” can mean anything from shorter lead-time orders in hours, same-day delivery, click and collect, or a planned next-day delivery. Meeting this demand, without increasing costs or disappointing customers, is one of the defining challenges of online grocery.

The Ocado Smart Platform (OSP) can seamlessly connect last mile and ecommerce. This enables retailers to make smart decisions about the most efficient delivery options and slots to show each customer, based on multiple factors like fulfilment location, van availability and route efficiency. This integration is key to delivering orders with maximum reliability to customers, and maximum efficiency for retailers. 

For example, Ocado Retail’s combination of a quality customer proposition and technology enables it to consistently deliver on its promise to customers by delivering on time and in full. Behind the scenes, OSP supports seamless resource and capacity planning by continuously linking real-time order demand with logistics constraints, dynamically balancing labour, fleet availability, and warehouse throughput. This ensures operations stay lean while maintaining top-tier execution. 

In FY25, the business further improved its already strong ‘perfect orders’ rate, with 99% of items delivered exactly as promised. 

Smarter routing to optimise the last mile

Optimising the last mile is far more complex than simply drawing the shortest line on a map. To ensure a fleet runs on time and that capacity is optimised as efficiently as possible, the system must balance a complex matrix of moving parts. 

Routes need to account dynamically for live traffic conditions, van storage limits, the precise balance of frozen, chilled, and ambient products, and the fact that customers can edit or add to their orders right up to the cut-off point. 

It would be impossible to handle this level of complexity efficiently at scale without the use of operational research. For example, a delivery network managing just 2,000 orders and 100 vans creates 10^3897 possible route permutations - a staggering figure (and for some context, a number that dwarfs the estimated10^82 atoms in the universe(!).

Behind the scenes, our solutions solve this mathematical challenge by continuously recalculating options, processing millions of potential combinations per second to balance absolute punctuality with logistics efficiency.

OSP in operation

Vehicle routing within OSP is put to task every day for our global partners. It’s the software that helps to make sure the fleet runs on time and with its van capacity optimised. 

Our OSP routing optimiser assigns any orders to routes –  it has to consider the time window, the volume in terms of the number of chilled, ambient, and freezer totes, and the weight of the order. It balances the punctuality to the slot time and adherence to physical capacity limits, against the number of vans used and miles driven to produce the most efficient delivery plan - even as customers continue to place and edit their orders.What’s more our algorithms take into account road speeds and driving conditions to create the most efficient delivery routes.

Flexibility for every retailer

Every market has its own definition of convenience in delivery. Some shoppers prefer same-day or short lead-time delivery, others choose next-day. Some prefer the doorstep, others want to collect orders themselves from stores or lockers - the click and collect model. 

The Ocado Smart Platform is designed to support any and all of these preferences. Home delivery, click & collect and unattended options are all options with OSP. This flexibility allows retailers to adapt their proposition to their own local market conditions.

This also applies to infrastructure. OSP can integrate deliveries from a hub-and-spoke network of Customer Fulfilment Centres (CFCs) and smaller spoke sites, as well as stores (or dark stores - a warehouse used only for picking online orders), to extend reach and serve a broader geography.

For retailers, this means the last mile can scale with their business: from a handful of vans in a small town to a network of big cities - or even a nationwide fleet.

Last words on the last mile

The last mile is one of the toughest challenges in online grocery. It demands punctuality, efficiency and flexibility, all while protecting margins.

With decades of hands-on experience, Ocado has proved in its own operations that vehicle routing can deliver on all three. Today, through the Ocado Smart Platform, those same capabilities are available to retailers worldwide, helping them run efficient, scalable delivery networks and meet rising customer expectations.