2024 Last mile challenges: reducing costs

1. Invest in new technologies to improve efficiency  

With spiralling fuel costs every mile matters, therefore the number one technology investment has to be in route optimisation and planning to streamline route efficiency and complete more deliveries per day based on your specified parameters. Being able to optimise for the shortest possible routes between delivery stops can, for example, save you an average of 10% of miles driven, which equates to a 10% saving in fuel costs and CO2 emissions per route. A win for cost savings and a win for the environment.  

2. Minimising failed deliveries through better customer communication  

A failed delivery doubles costs in the last mile, so being able to reduce the chance that a customer is not in to receive the delivery through customer notifications will greatly reduce costs by improving first attempt delivery rates. This doesn’t just include communicating scheduled deliveries, but also sending notification in real time to all impacted parties when the unpredictable happens - bad weather, road closures, traffic and breakdowns - to potentially re-schedule or re-route deliveries.  

It’s worth noting that in addition to cost, failed deliveries can harm your brand’s reputation if not communicated promptly, ultimately resulting in lost customers. Giving customers dynamically generated options for rescheduling their delivery also helps customers find a new time slot that works for them while also taking into consideration existing capacity limitations. 

3. Effective management of returns  

Having to make additional trips to pick up returns significantly adds to last mile costs, therefore being able to incorporate returns into a planned delivery route will ensure no additional journey is required. The ability to capture the reason for the return is a crucial part of return management - is the item damaged or faulty, or just unwanted? - as this is likely to determine where the item is returned to and needs to be considered when scheduling routes. 

4. Visibility, visibility, visibility 

Inherent in all the above points is the need for visibility - it is arguably the most important element for communicating with customers, optimising routes, reacting in real time, etc. Real visibility in this sense means that the information you need is at your fingertips when you need it. This includes proof of delivery, order information, statuses of customer order confirmations, billing information, delivery audit trails and much more.   

Without true end-to-end visibility, you’ll wind up delivering packages to unavailable customers, receiving more calls inquiring about delivery statuses, and being clueless about whether any given order has been fulfilled. In short, last mile visibility gives you the opportunity to avoid disruptions and ultimately boost efficiency across your delivery logistics, saving time, resources and money.  

Getting rising delivery costs under control is paramount for last mile success - but that can’t come at the expense of great customer service. That’s why confronting last-mile delivery cost challenges proactively requires the right technology, complete visibility and smooth communications between the delivery team and your customers.  

Published On: 29/02/2024 14:00:00

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