5 Approaches to Optimizing Last-Mile Costs

Fast delivery is something that is considered to be a priority for most customers as it has become a norm for them. Though customers enjoy receiving speedy delivery, it can be difficult and costly for businesses to do so. To reduce some of the costs involved in Last-Mile Delivery, companies can follow the approaches listed in this article.

Last-Mile Delivery simply refers to the final step of the delivery process where a package is moved from the transportation hub until it reaches its intended destination, usually a retail store or the customer’s doorstep. It is also the most critical step of the delivery process as the business needs to ensure that it occurs in the fastest and most efficient time.


Last-Mile Delivery Benefits


1. Improves Shipment Visibility

Last-Mile Delivery can offer insight into where shipments are located, which assists logistics and supply chain executives to gain better control over their fleet. Having greater visibility into shipments also ensures that the chances of theft and spoilage of products are reduced.


2. Increased Customer Engagement

When customers receive visibility regarding their packages from the time they place their orders, it will ensure that there is increased transparency for the customer, which positively impacts the customer and their trust in your brand.


3. Increased Transparency

Last-Mile Delivery allows supply chain owners to know when customers placed orders, who will deliver the order to the customer and when they can expect the delivery to be completed.



Last-Mile Delivery Costs


Last-Mile Delivery is known to involve high costs, and several factors contribute to these costs. Firstly, whenever drivers are delivering packages in the city, there is more idling that is involved. Idling occurs because the city has more vehicles on the road, traffic lights, and much more winding streets that are nearly impossible to avoid.

Another factor that leads to high Last-Mile Delivery costs is the fuel that is used during deliveries. Whenever drivers have to deliver multiple packages in different locations, they have to use the local roads. If they are stuck in traffic, then fuel is wasted when decelerating, stopping and accelerating at rapid intervals.

The last factor that contributes to Last-Mile Delivery is failed deliveries. When delivering products to customers, there is a 5% chance that they will not receive their packages the first time.



How to Reduce Last-Mile Delivery Costs


Most of the factors that contribute to high Last-Mile Delivery costs are some inefficient processes; therefore, to reduce these inefficiencies, businesses can follow the strategies offered below.

1. Offer more delivery options

Fast delivery might be something that most customers require; however, at certain times it might not be the best option. For example, if you offer your customers same-day delivery, but they are at work when you deliver their package, it will lead to a failed delivery. Therefore, it is crucial to offer customers several delivery options. Customers will choose the delivery option that suits their schedule, and when they know they will be around to pick it up. By offering customers many delivery options, you will be guaranteed that you reduce the number of repeat deliveries that you make.


2. Use real-time data

The best method that you can use to ensure that you discover inefficiencies within your delivery process is by analyzing the data. The data contains information such as the number of tasks completed, the time it takes to complete the tasks, the distance per task and the difference between successful and failed tasks. You can also use the data to analyze the performance of each driver. By analyzing the data, you will be able to improve efficiencies and reduce Last-Mile Delivery costs.


3. Optimize delivery routes

The distance between two drop points determines the cost of delivery. The greater the difference is, the higher the costs will be. The key to ensuring that delivery costs are as low as possible is by optimizing delivery routes. Optimizing delivery routes involves analyzing several data points such as time, distance, traffic and driver capacity. Whenever there are new deliveries, they can be re-assigned by changing the delivery routes simply by notifying the drivers in real-time regarding those changes.


4. Verify deliveries

The technology used for Last-Mile Delivery, like proof of delivery, can help obtain a record of when drivers delivered packages, who signed for the package and where the delivery staff dropped them. Through the mobile application, drivers can collect important information during the delivery, including the barcodes, signatures, images, and notes in a few seconds. Businesses can use the information collected during the delivery to generate insights that assist in verifying deliveries and can be used to identify challenges and streamline processes.


5. Update customers about deliveries

Information is vital to us all in this time as we all like to know what is going on, the same also applies to customers when it comes to deliveries. By using the right software, you can provide customers with real-time information about their packages which can significantly improve their delivery experience. Communication to customers should begin from the time that their purchase is packaged or shipped. You should give customers information regarding when they can expect their delivery to arrive. If possible, they should have the option to view the person’s real-time location delivering their package. Customer updates are one of the most effective methods to ensure that customers receive their packages as they know when they will arrive.





The strategies offered above will be able to reduce the costs that are involved in Last-Mile Delivery significantly. By gaining insights about delivery and being more transparent with customers about deliveries, you will reduce some factors contributing to the high costs.




Speaking of reducing costs, here are 6 Top Strategies for Reducing Freight Costs.