What are last mile delivery costs, and why can they be so expensive? This service is the final part of a product’s trip to your customers, and it can get pretty pricey. Shelling out for this crucial service can make a sizable dent in your budget. Planning for it requires the right partner and strategies.
According to the Council of Supply Chain Management Professionals (CSCMP), last mile delivery costs are expensive for shippers because of factors such as fuel costs, vehicle maintenance, driver labor, and the complexity of navigating residential areas. High return rates among certain industries, especially in eCommerce, add to the expense.
Take the time to look at the costs and plan a last mile budget for your customers that is efficient and won’t eat through your profits.
Last mile budget planning is a must when managing an e-commerce business. Proper budgeting ensures you have enough stock available to fulfill deliveries promptly, meet customer expectations, and maintain a healthy bottom line.
One of the main challenges of last mile are the associated costs. Fast, accurate delivery of multiple packages is costly for the companies that handle it, so shippers should expect to pay accordingly.
Planning a budget means tracking specific details about your business to improve efficiency:
It can be difficult to plan for some of these changes, especially fuel and labor costs. In recent years, these factors have driven costs up for logistics companies everywhere.
To stay ahead of the changes, develop and update your plan according to industry changes. When you do so, you can then set expectations for your customers in a way that keeps them happy.
Many businesses find themselves grappling with this complex task because there are so many moving parts to consider. One day, you're dealing with fluctuating fuel costs, the next, you're trying to predict labor expenses.
Another challenge lies in balancing cost-effectiveness with customer satisfaction. It's one thing to cut costs, but if it results in late deliveries or damaged goods, your customer experience takes a hit. And in today's competitive market, a poor customer experience is disastrous to your business.
To set yourself up for success, follow these steps:
By incorporating these steps into your budget development process, you can create an efficient and cost-effective shipping process and keep customers happy.
The last mile delivery cost breakdown can vary by each transportation carrier. Like other shipping services, prices go up or down based on things such as size, weight, and final destination.
It also depends on what services are being provided at the time of the delivery.
If you plan on offering these things to customers, there will be a higher price involved. Naturally, a heavy package that needs to be delivered to a third floor walk up apartment is going to cost more than a small item on the first floor.
|White glove delivery||$50 – $200|
|Room of Choice||$30 – $100|
|Setup and Install||$75 – $250|
These fees would be on top of the standard fees charged for delivery. Working with a last mile 3PL provider can help you with these last mile delivery costs. They have the experience and technology necessary to plan efficient rules and the equipment to make even large packages simple to handle.
Working with a specific final mile carrier, whether locally based or as part of a national franchise, helps with price control through outsourcing. How you reduce costs depends on what you notice your company spending more on.
High-cost problems impacting a shipper’s profits include:
If you’ve been handling the last mile on your own and have these issues, it might be time to look at outsourcing to a 3PL that can provide you with better tracking and experienced personnel.
If you’re already outsourcing your shipping, it could be you’re not using the right company for the job. Perhaps you signed on because the starting price was right or fast delivery was promised. Unfortunately, you end up spending more in the long run because of mistakes that customers expect you to fix.
This is why looking and paying for quality services actually saves you money down the line. Lowering your expenses as a shipper means paying for quality services from the start, so mistakes don’t cost you later.
Look for a last mile carrier that can provide the following:
Dependable final mile services help you build brand loyalty with customers when they offer quality services. Surveys from marketing companies have revealed that up to 84% of customers say they won’t order again from a company with poor last mile experience.
With numbers like that, you can’t afford to not have quality services where customers are concerned.
The boom of eCommerce orders has created a strain on the delivery chain nationwide. Major online retailers have also set the bar for delivery standards higher than ever before.
In short, customers simply expect more. For smaller eCommerce businesses or local manufacturers, things like overnight shipping and free delivery might not be possible financially.
We’ll review cost along with other delivery problems often associated with final mile services and rising last mile delivery costs.
Efficient systems help cut down on costs for the carrier and reduce mistakes that end up costing you as the shipper.
Off a highway, trucks and delivery vans get significantly fewer miles per gallon, which increases fuel costs. Lowering last mile logistics costs by optimizing delivery routes and giving clear address directions help off-set some of this.
The desire for faster deliveries is huge right now as customers demand their eCommerce packages as soon as possible. Make sure speed doesn’t cost you accuracy.
Clear directions reduce the likelihood of failed deliveries, which can cost a shipper between $17 to $20 per mistake. Multiply that across about five percent of your shipping and you get the national average.
Delivery mistakes also lead to unhappy customers, ultimately affecting your ability to retain customers and build any kind of brand loyalty. Don’t offer same-day delivery if the cost will eat away at profits or if you don’t have the logistics experience needed to organize it.
The final mile might be the only direct point of contact that clients have with an eCommerce business. Being a responsive company does carry weight, and you should be actively communicating with your clients.
However, the physical aspect of receiving a delivery usually overshadows digital communications. Offering additional services such as white glove delivery or room of choice makes your company look good to clients. It’s another benefit you gain from working with experienced logistics providers.
See how you can set up Final Mile Full Truckload Services for all your B2B deliveries across the country.
While it's true that final mile logistics carry hefty costs, it's also an opportunity for substantial profit. This is where adding white glove service can make a difference. Characterized by superior care and attention to detail, this service can significantly enhance customer satisfaction and bring in revenue.
Contracting a carrier that offers white glove services helps your profits through:
This is a great way to ensure your freight is delivered on time and in great shape. Look for freight partners that offer white glove delivery service in your most popular service areas to target your best clients. Once the good reviews start coming in, you can expand white glove services along with your customer base.
The individualized service you are provided with white glove delivery ensures your last mile delivery is seamless and you have access to your shipment from Point A to Point B.
Find out more about how B2B white glove delivery helps you.
Customer expectations are important, and that’s why you’ll experience the difference with USA Truckload Shipping. We offer individualized services that include real-time visibility at fulfillment centers, truckload freight options, and 3PL logistics services that ensure your goods come the most cost-effective way with supply chain management that matters.
With our extensive experience and commitment to customer satisfaction, we make last mile delivery costs seamless and hassle-free.
Ready to take your last mile delivery to the next level? Call us today at (866) 353-7178 for a risk-free quote, or complete our RFP form. Let USA Truckload Shipping help you turn the final mile into the final smile for your customers. Your success is our mission.
R+L Global Logistics
315 NE 14th St., Ocala, FL 34470
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