If there’s one expense as a business, you can’t avoid its shipping costs. Shipping plays a vital role in guaranteeing that your customer receives their package and you earn their repeat business. Unfortunately, last mile delivery can be the most expensive part of the shipping process. Understanding how last mile delivery works, why it can become costly, and how you can save money can help ensure shipping success for your company.
What to Expect with How Last Mile Delivery Works?
How last mile delivery works is that it’s the final step in the shipping process, ensuring the customer receives their package. Last mile delivery aims to keep costs as low as possible while providing quick and efficient transportation. However, there are some challenges to overcome when using last mile delivery, including finding affordable services.
Once you find the last mile delivery carrier, you’ll need a way to manage the shipping process to guarantee:
- Packages are being shipped
- Someone can accurately track the packages
- Handle any order returns
- Manage logistics if packages are delayed or lost
The two most common options are to either manage your own shipping department or work with a third-party logistics (3PL) provider. Managing a shipping department involves additional resources, staff training, storage space, and building an actual shipping department if your current location doesn’t have one.
Working with a 3PL allows many companies to have their own shipping department without the added work of hiring and managing staff. The right 3PL will work alongside you to help meet your business goals and quickly adapt to your changing needs.
Last Mile Delivery Costs & Tips to Reducing It
While last mile delivery is an essential part of the shipping process for the customer, the costs can add up. Here are the top three areas that contribute to last mile delivery costs.
1. Fuel Costs
Fuel prices often change; putting a schedule in place can help you purchase fuel when the cost is low. Additionally, the more you begin to ship, the more fuel you will use, which increases the cost.
Helpful Tip: As your shipping increases, make sure deliveries are made along the route to the destination to ensure the best fuel mileage.
Working with a 3PL: An experienced 3PL handles the fuel costs for the transportation to provide you with optimized routes and the most cost-effective last mile costs available.
2. Technology Costs
Technology plays a vital role in shipping success, from accurate tracking to workflow management. However, technology costs can add up quickly, and an unsuitable investment in software that doesn’t meet your needs can cause additional problems.
Helpful Tip: Make sure to evaluate any software you want to purchase thoroughly. Look for cloud storage options, regular system updates, and access to mobile apps that would all be beneficial for you.
Working with a 3PL: An advanced logistics company will already have access to the most current technology available, giving you access to its benefits without the upfront cost.
3. Labor Costs
Finding and retaining reliable, skilled delivery drivers contributes to a large portion of the last mile delivery costs since they are essential to the transportation network. In addition, delivery driver’s rates can increase based on the type of delivery.
Helpful Tip: Work with delivery companies to see who can provide you with the most competitive rate for different delivery types (truck, local, and express deliveries).
Working with a 3PL: Finding a 3PL with access to delivery drivers across the country allows them to find the most inexpensive option available for you.
Learn How to Reduce Your Last Mile Delivery Costs
Beitler Logistics Services, Inc. (BLS) is a superior 3PL provider with 100+ years of experience. We have access to a broad network of delivery carriers to help you save time and offer faster shipping at a competitive price! Contact the BLS team to learn how to reduce your delivery costs!