How to Reduce Last-Mile Delivery Costs Without Compromising Service Quality

How to Reduce Last-Mile Delivery Costs

In the present fast-growing business world, last-mile delivery is one of the vital links of logistics. It concerns the last stage in the distribution process – delivery of goods from a warehouse or depot to the customer. As customers are becoming more demanding and expecting faster and reliable deliveries, organizations have been forced to deliver on these expectations without necessarily having to increase the price of their products. Yet, last-mile delivery might be one of the most costly stages of supply chain operations. The issue here is how to lower such costs without compromising the quality of service.

In this blog, you will learn about ways to decrease last-mile delivery expenses while maintaining the best service quality.

Optimize Delivery Routes

Adopting route optimization software can dramatically change last-mile delivery. These tools take into account various parameters like, traffic conditions, road status, delivery time and window period- and come up with best and quickest route. It also reduces journey time and therefore fuel usage resulting to reduced operational expenses.

Additionally, fewer miles traveled reduces vehicle wear and tear, decreasing maintenance expenses. As a result, companies can make more deliveries in less time, improving overall productivity and customer satisfaction.

Make Use of Local Storage

Logically, to minimize the distance between the warehouse and the final delivery point the firms establish small warehouses at or near the customer locations. It helps to minimize delivery time and cost of transportation to a very large extent.

Another advantage that localized warehousing fosters is the ability to incorporate and provide faster delivery solutions like same day delivery that is demanded by consumers currently. Also, goods are closer to the customer which means that the movement of stocks can be done efficiently and there is little or no time the stocks will run out of stock.

Invest in Technology

Investing in technology like real-time tracking systems, automated notifications, warehouse automation and advanced fleet management software can drastically enhance last-mile delivery operations. Real-time tracking by both business and the customers ensures that there is a better way through which the shipment is followed and this ensures that there are less incidences of delivery problems. Customers are informed about their packages through automated notification which increases satisfaction.

A good fleet management software can be able to schedule and allocate delivery effectively, cutting on time when the vehicle is not occupied. Altogether, this using of technology contributes to increasing communication, increasing the accuracy of delivery services, and decreasing operational costs.

Use Electric Vehicles (EVs)

Converting delivery vehicles to electric is not a short-term fix as it is instead a long game that can save lots of money. Though EVs are relatively costly than traditional vehicles in terms of acquisition, their fuelling and service requirements are relatively cheaper. EVs do not require fuel at all and have less mechanical complexity, there by minimizing the chances of a mechanical failure.

Apart from costs, integrating EVs with your company supports sustainability goals since customers consider your company eco-friendly. Customers today are more aware of sustainability, and integrating EVs into your organization’s fleet may place you ahead of the competition while saving the environment.

You May Also Like to Read: How Electric Trucks Are Going To Impact Transportation Cost?

Partner with 3PL Providers

Outsourcing last mile delivery to 3PL is a feasible option because it allows for lower costs to be incurred for last mile services since the 3PL providers who specialize in last mile delivery will likely have the infrastructure, skills, and technologies necessary to execute last mile delivery efficiently and effectively than in-house transportation fleets.

They can arrange efficient routes for delivery, control the storage facilities and attend to customers with deliveries and this can effectively cut down costs. In addition, by outsourcing with 3PLs, companies can free up their time and energy to concentrate on the sale of their products while leaving the delivery of their final product to the specialists.

Improve Delivery Management

Implement delivery confirmations using QR codes, photographs, or digital signatures to reduce disputes and return costs. It ensures that the correct shipment reaches the right consumer, reducing errors in last-mile delivery. Efficient reverse logistics increases customer satisfaction and reduces return costs.

By simplifying the returns process, you can ensure that things are returned swiftly and efficiently, lowering last-mile shipping costs.

You May Also Like to Read: What Is EPOD (Electronic Proof Of Delivery)?

Automate Your Dispatching

Employing manual efforts in dispatching and assigning delivery orders may result into a lot of time and efforts from the logistics department. It also creates some problems of inefficiency since the use of humans can mean that wrong driver is assigned or resources misused during rush business hours.

This process is made easy by auto-dispatching technology for new orders to be linked with a proper driver depending on factors such as proximity the driver’s current route or load factor. This eliminates delays in delivery, increases the chances of accurate delivery and also reduces on the amount of labor required.

Demand Forecasting

Demand management and specifically demand forecasting is an important factor in avoiding high costs of last mile delivery and increasing overall efficiency. With the help of historical statistics and analysis of tendencies in the market, it is possible to foresee the customer’s need and make more adequate decision in the issues concerning the number of fleets, the number of employees and the stock.

It means that through accurate forecasting the company does not face such problems as overstaffing, when labour and general expenses are much higher, or understaffing, when the delivery time is longer and many other deadlines are missed. When your resources follow the expected demand, you are able to deliver in good time and avoid unnecessary expenses which are costly to your customers.