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How To Save on Last Mile Delivery Costs

December 14, 2017 Courier

last mile delivery costs
last mile delivery costs

Did you know that last mile delivery costs can make up over a quarter (28%) of any a given product’s overall total delivery cost? But it doesn’t have to be that way. Online sales are expected to grow at a rate three times faster than the retail industry.

This is going to put a lot more pressure on companies to really dial in their delivery logistics. And it will make keeping your last mile delivery costs under control more important than ever. But how do you do that, without sacrificing speed, the efficiency of delivery, or customers service? It is possible. Here’s how.

Properly Trained Your Pickup and Delivery Team

You would be amazed at how much time and money can be wasted on the actual delivery itself. Like anything, training is key. The shipping team needs to know customer service at this level. That means getting in front of someone who can sign for the delivery, yet being as polite and professional (personable even) as quickly as possible. You don’t have time for frontline team members to be fumbling with technology. That wastes time, it annoys the customer, and it makes you look unprofessional.

The staff needs to recognize if the wireless equipment isn’t going to work very well in a large office or residential building and be prepared for that. A serious delay or poorly handled delivery transaction raises the cost of this delivery, while potentially raising the cost of every delivery for the rest of the day, or even week.

An Example of Bad Service Driving Costs Up

Let’s say a delivery person has five deliveries to make and various points in the city. Someone can be a very skilled driver with dialed in routes and perfect weather. But they’re not properly trained in customer service or the technology they’re using, that’s just going to add time to each individual stop.

That driver who had to make five stops is maybe adding an extra 10 minutes to the first four stops, which is 40 minutes of wasted time. And maybe that means they can’t make their last delivery of the day because the final stop is an office that closes at 4:30. This pushes it to the following day, which can be disastrous for the recipient, who was promised delivery that day, and now faces their own missed deadlines and costs associated with that.

This also creates a breach of trust and a soured relationship between the delivery company and the recipient, as well as the recipient and any other parties who may have been counting on this timely delivery.

Work with a Company That Has Embraced New Technology Options

As in any industry, when you’re trying to lower last mile delivery costs, properly leveraging today’s technology can make a huge difference on the bottom line. The companies that make full use of all of the options available will be the ones to prosper. And the ones who are stuck doing things the way they were done in 2010 will wonder why they’re hemorrhaging money.

Your logistics and strategy need to utilize all of the technological and cloud-based options available for planning, executing, and reporting. This needs to be married with pristine route optimization, route tracking, delivery, and transaction tools on mobile devices. This can take a lot of the guesswork and seemingly mysterious wasted time that a lot of companies can’t account for. And if you can’t account for it, you can’t manage it or fix it.

Spot Inefficiencies and Fuel/ Time Wasters

Details tracking and reporting can help you identify one of the following money-wasters:

  • For every mile per hour above 55 miles an hour your truck drives, fuel economy drops by 0.1 miles per gallon.
  • Contrary to what you think, slightly worn tires can give you up to 7% better fuel economy versus brand new tires.
  • For every 10 psi that your truck’s tires are underinflated, you will lose 1% of your fuel economy.
  • For every hour a long haul truck is idling, it will kill your fuel efficiency by 1%
  • Tires are the biggest factor and fuel economy below 50 miles an hour, but the truck’s aerodynamics is the most important factor when driving over 50 miles an hour
  • Overall, more efficient drivers will get 30% better fuel economy compared to inefficient drivers

More importantly, proper logistics and analysis of every piece of data available to you can help you optimize your route. It’s entirely possible for your actual mileage to be as much as 18% (or higher) than your billed mileage, thanks to off-route mileage.

Never Assume That The Big Guys are the Only Ones Who Can Handle Big Jobs

You can also cut back on last mile delivery costs by exploring some of your options outside the big-name companies. First of all, you can develop an ongoing relationship with a smaller provider. You can build a more personal relationship, and they can quickly become experts in your needs and challenges.

They can be the ones who are in charge of keeping your last mail delivery cost low and finding any new opportunities for you to save money. A lot of the times, larger companies will outsource deliveries to smaller companies, because the smaller company is in a better position to be more nimble and make a crunch time delivery.

Let’s Talk About Your Last Mile Delivery Costs

We can help you reduce your last mile delivery costs and any other shipping expenses, whether sending simple envelops or massive shipping crates and everything in between.

Need It Now Delivers is a family of companies throughout the US that has a combined total of more than 1,000 years of experience in the field of courier and logistics.

How can we help you? Click here to get a free quote right now!