Reducing Last-mile Delivery Costs to Improve Business Processes

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E-commerce isn’t something new. It has grown exponentially in the last decade. Still, last year’s coronavirus pandemic blew it way out of proportion to the point that US consumers spent a massive $861.12 billion in 2020 alone. That’s expected to reach $1 trillion in the next years. But this does not mean that the industry isn’t facing a gigantic challenge in terms of delivery. The uptick of consumerism led to an explosion of logistics and supply chain problems that include, most especially, the challenges of last-mile delivery.

Referred to as the final link in the forward supply chain, the last-mile delivery is the transfer of goods from the distribution hub to the final destination such as the consumer’s residence. Companies that want to improve their processes and expenses need to search for practical solutions to their last-mile delivery challenges. Among many things, this means partnering with a logistics company that can provide affordable, quick, efficient, and streamlined solutions to the transportation and logistics aspects of the business.

Optimizing Delivery Routes

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The cost of delivery is proportionate to the distance between the two points. In the last-mile delivery, the two points are the distribution hub and the final delivery address, which is the consumer’s home. To reduce the cost of the delivery, your business must optimize the multi-drop-off points, which means making multiple stops along the route as the delivery reaches its final destination.

But for that to be possible, businesses must rent at least a 14-footer lorry that can carry all parcels regardless of the size and weight. It is essential to find a logistics company that will schedule the drop-offs at a predetermined time to ensure that everything will be delivered at the time expected by the customers. Many logistics companies use a route optimization feature to establish the routes considering several factors such as time, location, driver capacity, distance, and traffic.

More Efficient Vehicles

While optimizing the delivery routes is the most cost-efficient way to deliver the goods, many companies also choose fuel-efficient delivery vehicles. When your delivery trucks aren’t consuming gallons of fuel per route, then you’ll have a better chance at reducing the cost of your last-mile deliveries. Some innovations in terms of delivery vehicles are electric motors and cars, drones, and other autonomous solutions. The less fuel the vehicle needs, the more money you can save. On top of that, you’ll be protecting the environment, too.

Offer Incentives for Longer Delivery Time

Most customers want same- or next-day delivery. Do you know that you can incentivize customers who choose a longer delivery time? If they allow you to consolidate the deliveries to the same area, wouldn’t that save you enough money to give them bonuses and rewards? Since customers love the idea of freebies and discounts, this can be the selling point of you not delivering their orders the next day.

The right marketing campaign will get your customers to say yes. It’s a win-win situation. Unless they need the items the next day for whatever emergency, there should be no reason why they couldn’t wait for a couple of more days before getting their hands on the items.

Convenient Delivery Time

The fastest is not always the best. Do you know that customers will choose convenient delivery time over being the fastest? Instead of offering to deliver the goods the next day, they would rather you tell them when and what time you’re going to have it on their doorstep.

This is important not only for cash-for-delivery options but also for purchasing luxury and expensive items that they want to receive themselves. This way, they can schedule their errands, so they’ll be home at a specific time.

Another thing you can offer is the convenience of letting them choose the exact day and time when you want the items to arrive. If it is completely out of schedule and out of the way, you will need to charge them more for it. However, if it can be consolidated with other orders, it’s a win-win situation. You will reduce the cost of the last-mile delivery while also satisfying your customers’ demands.

As always, technology will greatly help reduce your business expenses, especially the cost it takes to deliver the goods to your customers. In as much as delivery is the most important aspect of any business today, that doesn’t mean you need to spend more than 25% of the total cost of the transaction on it. Every business must aim to reduce the transportation and delivery costs of the goods.

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