Reduce Last Mile Delivery Costs with Delivery Management Solutions

A speedy delivery is not considered a luxury, anymore. It is now a necessity that customers expect, and hence considered top priority by retailers. Therefore, with e-commerce expanding in every country around the world, last mile delivery makes all the difference in retail shopping. Last mile delivery is the transportation of goods to the final destination (homes or businesses), from the nearest distribution center.

Last mile delivery costs contribute to almost half of the supply chain costs, making it a costly proposition for retailers. Despite its high cost, last mile delivery is important as it is the final deciding factor when customers make a purchase. It’s only a matter of seconds before they decide to look elsewhere, if they feel that the delivery fulfillment is not efficient.

Since the stakes are high, brands need to look into ways to cut down last mile delivery costs, while not compromising on delivery fulfillment. The different costs involved are inventory costs, labor costs for delivery fulfilment, and failed delivery costs. Costs can also be incurred when customers do not pay for the delivery (due to an offer or discount). This situation is a double-edged sword because when delivery costs are high, the business loses customers; when delivery is offered for free or on discount, part of the cost has to be shouldered by retailers. Since the customer expectation is free delivery or same-day delivery, retailers cannot afford to make them pay for the last mile cost.

Ways to Cut Costs in Last Mile Delivery

Retailers who are new to the business, or do not have a sufficient budget to meet the last mile delivery costs, need to focus on their customer service to mitigate the costs. Simple and smart order routing can be followed to achieve timely deliveries.

Grouping orders based on the location of delivery ensures that the delivery batch is sent out in the same delivery truck, and managed by one driver. This brings down truck driver costs, and improves operational efficiency, as well.

Offering more delivery time slots, instead of catering to a narrow timeframe, can prevent failed deliveries and contribute to huge savings. This way, customers have the choice to pick a free shipping option a few days later, if they don’t need the product urgently. Alternatively, they can choose to go with the delivery period provided by the retailer. Additionally, offering more delivery time slots can reduce the burden on the truck drivers, as well.

Leveraging Digital Solutions for the Last Mile Delivery

An efficient digital delivery management solution with a good user interface can optimize last mile delivery in many ways, thereby helping cut costs. The solution which is typically multi-device friendly (laptops, tablets, mobiles and desktops) can offer customers the experience they expect, while ensuring the delivery is a success. An important benefit of using such apps is that they help streamline not only the last mile delivery, but improve the overall efficiency of the delivery operations.

  • Retailers can prevent failed deliveries because truck drivers can now communicate with warehouses. This means happy and repeat customers, leading to better revenue and eliminating the cost of failed deliveries and repeat delivery attempts.
  • Customers can use the order tracking feature to track their orders from the warehouse to the destination places. This ensures customer is at the receiving location, preventing re-runs for truck drivers, and helping cut fuel cost to a large extent.
  • Drivers can benefit from automated message sending and receiving options, be able to select the area and route they will deliver, and notify customers about updated delivery time, as well. Timely customer notification contributes to better customer satisfaction and repeat business.

All these features play a significant role in cutting the last mile delivery costs in many ways, while simultaneously contributing to better delivery fulfillment. Delivery management solutions also offer great features to capture rich electronic Proof of Delivery (PoD), electronic signatures, and timestamps and geo-tagging of all delivery touchpoints, that contributes to reducing the overall last mile delivery transport costs. This, in turn, helps brands to deliver the experience the customer expects, thereby leading to improved sales and greater revenue.

Do you want to optimize your delivery process to cut costs? IGotIt offers solutions for retail, trucking and logistics that can transform your business for greater speed and success with better control, scalability, responsiveness and visibility across each mile of delivery.  Instant electronic Proof of Delivery (PoD) expedites the invoicing and billing cycle, which is otherwise typically delayed by paperwork hassles. Interested in working with IGotIt? Drop us a line and we’ll be glad to set up a demo.

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