3 ways to reduce last mile delivery costs
Did you know that last-mile deliveries account for more than 41% of the supply chain costs? This data was revealed through a report by Capgemini. Thus, it has become crucial for companies to identify last-mile deliveries and work on cost reduction.
In today’s era, customer expectations are set on a high bar. Such expectations include quick delivery, free shipping charges, and much more. Thus, companies have to spend more to fulfill these expectations. One of the critical challenges includes increasing last-mile carrier delivery costs.
The companies cannot shift their cost burdens on the consumers. Doing so will lead to unhappy customers along with vast chaos. Companies should improve delivery services without compromising customer satisfaction and profit margins.
What do last-mile delivery costs constitute?
To analyze this issue better, let’s look at last-mile delivery costs.
Last mile delivery is concerned with the movements of goods from the source hub to the final delivery destination. Thus, every expense incurred in this pathway is referred to as a last-mile delivery cost.
Some of the components include,
- Fuel costs
- Reverse logistics costs
- Maintenance costs
- Storage costs
- Environmental and congestion costs
- Labor costs
- Ingestion costs
It will severely impact your business if you are currently avoiding any of the delivery mechanisms. The market is competitive; customers can easily replace you with any better option. Thus, the focus should be on improving your service rather than compromising on any of them. Let’s discuss three ways to reduce last-mile delivery costs.
Planned routing and mapping
What occurs when the products are out of the warehouse? The primary issue is the routing that happens on the road. If the routes are not pre-planned, it can lead to over-expenditure on fuel and incomplete deliveries. Companies tend to be stuck in this vicious cycle where they lose more cash daily.
Routing allows you to define a target for your delivery drivers and choose efficient routes. Thus, the time between multiple stops gets reduced automatically.
By partnering with a last-mile delivery provider like Zypp, you add value from professionals about expedition planning, routing, and other technical processes. The issues concerning mapping are solved through such planning.
One of the significant contributors to last-mile delivery costs is fuel prices. The problem accentuates as petrol and diesel costs are at a sky-high level. However, electric vehicles come at a rescue for such issues.
The usage of electric vehicles leads to a lower cost of operation. For instance, the price of petrol is around Rs 100 a liter whereas the domestic electricity is Rs 10 per unit. A fully charged electric vehicle can provide you 150 km range. Thus, the difference between the operations of an electric scooter and a non-electric scooter is vast.
Furthermore, electric vehicles have much lower maintenance costs than fuel vehicles. Such fuel vehicles have internal combustion engine-powered counterparts, which add to the cost of ownership and maintenance. The parts incorporated in an electric scooter are often simple and do not require regular replacements or repairs.
In summary, using electric vehicles can be a boon for last-mile deliveries. Zypp electric vehicles are equipped to facilitate last-mile deliveries. The riders associated with Zypp are thoroughly trained to provide efficient deliveries. Moreover, riders can charge Zypp electric scooters with the home charger or at EV hubs. This facility saves retailers’ costs and adds more earnings to the rider’s pocket. Zypp has worked with prominent companies like Amazon, Swiggy, Flipkart, Myntra, Blinkit, Zomato, etc.
Organized Tracking and Updates
By giving customers real-time updates regarding their packages, you can elevate the customer experience. Customers desire information in the modern world. Particularly when it comes to the deliveries, they want to know everything.
The admin can give clients automatic status updates using last-mile delivery and logistics technologies. When a delivery has been packaged or dispatched, customers might receive notifications. Additionally, they learn the anticipated time of delivery for their package. Additionally, consumers can see the location of their delivery person in real-time.
It can aid in lowering your last mile delivery expenses and improving customer experience and transparency. As the customer is aware of the package beforehand, they will likely be present for receiving the package. Such practice will lead to a reduction in the number of failed deliveries.
Another way to track last-mile deliveries is by using weekly, monthly, and yearly data. The companies can analyze route patterns and drivers’ practices for further improvement.
The supply chain and logistics industry’s last mile phase is the most expensive. Any company that can control it will undoubtedly be successful. We covered all the elements that affect last-mile delivery costs in one article. We also spoke about several strategies for overcoming them.
If you own a logistics or supply chain company, you must invest in a cutting-edge, reliable last-mile delivery solution that significantly reduces expenses and boost your bottom line.