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Friday, April 19, 2024

How to Reduce Last-Mile Delivery Costs for Your Business

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In today’s e-commerce led retail environment, delivery is a new normal for the average consumer. As e-commerce continues to outpace physical retail, logistics and distribution become all the more central to the emerging retail business.

The most expensive step in any supply chain is the last mile. Before the last mile, items are transported in bulk – whether as raw materials or components. The last mile sees finished products delivered individually, an endeavour that requires millions of cogs in order to work effectively. The costs arise from staff, fuel, overheads, maintenance and even returns. But how can these costs be reduced?

Flexible Delivery Options

To the untrained eye, this can seem like a counterintuitive strategy when it comes to reducing shipping costs. But bottlenecking your last-mile delivery into one specific timescale, third party or strategy can be costly in a number of ways. For one, customers may be put off by the inability to customise their delivery experience, with some finding the option you offer unsuitable for their needs.

By offering a number of different delivery options, you widen the spread and remove the bottleneck. Customers can choose a delivery timescale that suits them, whether they want their items expeditiously delivered on the same day or are happy to wait a little longer for cheaper – or even free – delivery. By offering this choice, you minimise the stress you place on any one delivery system, and maximise customer satisfaction in the process.

Route Optimisation

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Cost savings are not just made through engaging with the various modes and timescales for delivery. Engaging directly with the routes themselves can also create more value for you as a business, particularly with regard to man-hours and fuel costs.

With a rigorous approach to route planning and assignment, you can ensure your last-mile fleet are operating at maximum efficiency. In nailing routes and regions of responsibility down, you ensure you aren’t wasting manpower on unnecessary miles of travel – while delivering to your customers all the quicker.

Your route optimisation efforts could also coincide with fleet tracking technology. GPS tracking enables you to follow delivery movements at any time, and to also convey that information to waiting customers.

Fuel Alternatives

Speaking of fuel, petrol and diesel will be the biggest consumable overheads for your logistics arm – past the cost of energy for the warehouse or distribution centre itself. Conventional fuels have experienced significant rises in cost in the last year, and threaten to increase yet further as the push to green alternatives grows ever stronger.

While the up-front cost of electrifying your fleet is somewhat steep, the long-term savings are considerable. Investing in electric vans and cars can halve your fuel costs annually in certain scenarios, while also minimising the cost of repairs and replacements; electric vehicles have fewer moving parts than vehicles with internal combustion engines, making them more reliable and easier to fix.

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