Is your business a victim of the hidden costs of last-mile delivery? Last-mile delivery is the final step in the shipping process, the point where goods are transported from a distribution centre to your final customer.
At this point, customer satisfaction is key, but it can also be the most expensive and challenging segment of your logistics chain.
We’re uncovering the hidden costs in last-mile delivery, giving you actionable strategies to reduce them. Here’s what you can do…
1. Understanding the Hidden Costs of Last-Mile Delivery
The hidden costs of last-mile delivery can occur where you might least expect them. This is because as your business grows and your transportation operation expands, the final stage of delivery can be overlooked.
But that’s exactly where the costs rack up…
Fuel Costs
Fluctuating fuel prices can impact your delivery costs, especially in areas where fuel prices may already be inflated.
Failed Deliveries
Redelivery attempts due to customer absence or incorrect addresses can mean extra costs for you.
Inefficient Routes
Poorly optimised delivery routes can equal higher mileage, time and fuel consumption.
Technology and Equipment
Your upfront investment in delivery management software, tracking devices, as well as fleet maintenance, can add up.
Customer Expectations:
The pressure to offer free or same-day delivery can eat into your profit margins.
2. Streamline Route Optimisation
One of the best ways to overcome these costs is to understand them, and tackling the hidden costs of last-mile delivery can start with one aspect – optimising delivery routes.
At Millennium Cargo, we use advanced technology to make our services more efficient, and you can too. Using route-planning software can help calculate the best paths for your deliveries. This software can automatically take into account factors like delivery time windows, real-time and historic traffic and weather conditions.
Choosing the best routes means:
Lower fuel costs…
By taking the most efficient or direct route, you can save on fuel costs.
Faster deliveries…
With an optimised route, your drivers can hit their stops in less time by avoiding peak traffic, for example.
Fewer missed deliveries…
With fewer delays because of great routes, you’ll experience fewer failed deliveries to the end customer.
3. Consolidate Deliveries
If you’re looking to reduce the hidden costs of last-mile delivery without impacting your end recipient, then delivery consolidation is a great method. Combine multiple deliveries into fewer trips where possible, similar to the Amazon Day Delivery, where the customer chooses to receive all packages in one go rather than across several trips when the goods first become available to ship.
Other ways to consolidate deliveries include:
Micro-fulfilment centres
Using regional hubs to store and distribute goods closer to their ultimate destination.
Group deliveries
You can group your deliveries by geographic location, minimising their transit distance and maximising your last-mile efficiency.
Using these tactics you can reduce fuel consumption, achieve faster average delivery times and decrease your operational costs overall.
4. Use Technology to Improve Efficiency
You can address the hidden costs of last-mile delivery by investing in the best tools for the job. These can transform the way your last-mile logistics work.
Consider using:
Predictive Analytics
You can utilise historic data to get insights into demand, letting you allocate resources and optimise schedules more effectively.
Delivery Tracking Systems
Get real-time updates, reducing the chance of delivery errors and giving your business a valuable edge of transparency.
Putting these useful technologies in place can mean significant savings and happier customers.
Still Paying The Hidden Costs Of Last-Mile Delivery?
Minimising the hidden costs of last-mile delivery means streamlining routes, adopting technology, consolidating deliveries, and balancing customer demands. If you can do this, you can reduce your last-mile expenses and ultimately improve your operational efficiency.
Want to gain control over your last-mile delivery process? Get in touch with our experienced freight specialists at Millennium Cargo, and find out how we can help you uncover opportunities for savings.