Solving the challenges of last-mile deliveries with TomTom’s Premium Geocoding API

An address isn’t always enough to get goods, food orders and people to the right destination on time. In complex locations like apartments or office blocks, delivery people need more information to traverse the final steps and reach the correct delivery point. With TomTom’s Premium Geocoding API, this extra level of location detail is available for the first time in an easy-to-use API.

For anyone in the business of managing deliveries, ride hailing or other on-demand services, the final 100 meters is often the most challenging part of the last mile. Even when drivers and delivery people have the right address, reaching the right doorstep or specific drop-off point can be tricky. That’s especially true when the destination in question lies in a large apartment complex, university campus or mobile home park — or any other location where a primary address is subdivided into smaller apartment units or business suites.

In complex environments like these, most navigation systems will only get you as far as the curb or a building’s centroid (its center point). This information gap means that delivery people frequently waste precious time during the final steps of a delivery looking for a customer’s front door. The result is reduced productivity, higher costs and a less-than-stellar customer experience.

To successfully navigate the final 100m, delivery people need more information. That includes answers to questions like, where is the building entrance? Where is the best place to park nearby? And (of course) where exactly is the customer’s front door or drop-off point?

To overcome these hurdles, and ensure a smooth path through the last 100m, TomTom has launched its Premium Geocoding API, which offers a higher level of geocoding accuracy and data richness. It helps delivery people navigate from the curb to the customer’s front door in the quickest time – boosting delivery efficiency, success rates and customer satisfaction.

Before we dive into the details about how this all-new API works and the benefits it brings to last-mile delivery, let’s look at the basics of geocoding itself.

Geocoding is the process of transforming the description of a location — an address, a store name or even a keyword like “parking” — into specific geographic coordinates (latitude and longitude).

Geocoding makes it possible to rapidly find different kinds of locations, which is why it’s such an integral part of mapping and navigation applications.

Geocoding uses two primary components: a location dataset and the geocoding algorithm itself. Once a user enters an address or location description into the system, the geocoding algorithm searches through the dataset and returns the coordinates. Mapping software can then use those coordinates to pinpoint the location on a map.

While the process of geocoding may seem straightforward as a concept, it can get more complicated in practice. Due to many factors, standard geocoding services don’t always return the most precise coordinate points. For tasks where accuracy is essential, like last-mile delivery, this can pose a real problem.

Standard geocoding applications typically offer great coverage and precision at the primary address level. In other words, they can get you to a freestanding house or a building very reliably. But if you need to locate the precise location of a single apartment in a multi-story, multi-unit building, your average geocoding service might struggle to provide that level of detail.

As part of a 2023 study, exploring how the final 100m impacts different last-mile and on-demand providers, TomTom completed an in-depth analysis of its existing geocoding service, which revealed several shortfalls.

According to Roger Chan, Product Manager at TomTom: “After analyzing a sample of locations in the United States processed with our standard geocoding tool, we discovered that around 22% of the addresses returned were more than 50m [c. 160ft] away from their actual location, and 12% of addresses were more than 100m [c. 330ft] away. That’s a lot of extra distance for a delivery person to cover, especially when they aren’t familiar with an area.”

What’s more, this gap in geocoding precision increased average navigation time by nearly a minute.

“That might not seem like a big delay. But when you consider that the average delivery person in the U.S. makes hundreds of stops every day, the knock-on impact can be significant. Those lost minutes quickly add up to missed delivery slots, stressed drivers and dissatisfied customers,” Chan adds.

With more of us relying on mobility and on-demand services than ever, it’s piling pressure on last-mile providers. To reliably meet that demand, companies require location tech with a higher level of precision and detail than has previously been possible. TomTom’s Premium Geocoding API is a direct response to that need.

The TomTom Premium Geocoding API uses forward geocoding (the process of geocoding described above) to convert location text into geographic coordinates. The service returns highly accurate address coordinates, plus expanded address features required for last-mile delivery. Each apartment address is linked with rich attributes, including accurate unit locations, building entrances, on- and off-street parking points, as well as information on floor numbers, stairways and elevators.

Currently, Premium Geocoding is only available in the United States — although there are plans for the solution to be introduced to additional countries in the future. It offers incredibly high data coverage, mapping some 40 million locations and waypoints across the country. More than 99% of those locations — including individual apartment units, parking points and building entrances — are accurate to within 3 meters (10 feet). That’s a huge jump in accuracy, considering that standard geocoding solutions only tend to get you within a couple of hundred feet of an exact unit location at more complex addresses.

Have questions about TomTom’s Premium Geocoding API or want to get hands-on with a demo? Reach out to our sales team for more information.

Reaching this higher level of geocoding richness and accuracy wasn’t something that TomTom achieved overnight — or on its own. Premium Geocoding is the product of an ongoing collaboration between TomTom and last-mile specialists Beans.ai.

Founded in 2018 by entrepreneurs Nitin Gupta and Akash Agarwal, Beans.ai has quickly grown into a leading provider of last-mile optimization software. The company has built up a treasure trove of interior building maps and geospatial data to guide delivery people through the last mile. Its solutions now power more than one million daily deliveries across the United States.

“The challenges of the last 100m can’t be solved by one company alone,” notes Chan. “Our work with Beans.ai shows how collaboration has allowed us to get closer to the finish line than ever.”

To build the Premium Geocoding API, the joint development team used TomTom map data as its foundation, enhancing the company’s normalized map data with highly detailed unit-level map data from Beans.ai. The result is a solution that’s unique on the market, offering an as-yet unmatched combination of geocoding accuracy, completeness, coverage and detail.

“It’s been so rewarding to see how the breadth of TomTom data combines with the specific domain knowledge of Beans.ai to create a solution that’s going to be a game-changer for our customers,” says Chan.

Data from customers already making use of ultra-detailed geospatial data from Beans.ai offers a glimpse into the potential impact of a solution like Premium Geocoding. It’s been shown to reduce failed or late deliveries by up to 75% and boost delivery efficiency by 20%. This has saved millions in delivery and operational costs — both by streamlining the delivery process and reducing the number of claims from failed or late deliveries.

Higher efficiency also enables couriers to complete more deliveries in less time, all while making the task of finding each address easier. This reduces stress, allows drivers to earn more per route and enables delivery providers to keep up with growing business volumes.

Last-mile delivery and on-demand companies have also reported higher customer and courier satisfaction. One provider was able to cut customer churn by over 15% in a year thanks to improved delivery speed and efficiency. Others have noticed a lift in net promoter scores (NPS) and driver tips, showing that customers recognize and appreciate the improved last-mile performance.

Goetz Weber, TomTom’s VP of Commercial Innovation, states, "Just as we can quantify the benefits of using routing software (for example, by reducing the time taken to reach a given destination by selecting the most advantageous route) we can quantify the benefits of the Premium Geocoding API: deploying it leads to measurable, positive economic impact. It provides a very tangible and real value proposition in terms of delivery efficacy and customer satisfaction, giving the service significant differentiation in the market"

With demand for urban last-mile delivery predicted to grow by 78% by 2030, TomTom’s Premium Geocoding API has arrived at a critical juncture. Making the last mile more efficient isn’t just better for businesses’ bottom lines, it plays an important part in making our cities less congested and more enjoyable to live in – which is a future we all want to see delivered.