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Local Delivery Costs: 4 Simple Ways To Keep Them Under Control

Strategies for reducing local delivery costs while optimizing delivery schedules, dispatching, enhancing customer convenience, and efficient route planning.

Your all-in-one local delivery app for Shopify

Have you ever tried to calculate the cost of local delivery for your company? Local delivery is the most expensive part of the supply chain for many. It consumes a significant portion of profit, which could lead to a company’s early demise.

Do you want to see your company suffer because of local delivery costs? Are you aware of how to save money by maximizing local delivery?

If your business provides delivery services, you’ll need to implement a few key strategies to improve workflow management.

We’ve put together four options to help you keep your local delivery costs under control.

Table of Contents

  • What exactly is Local Delivery?
  • How much does local delivery cost?
  • Why is it important to regulate local delivery costs?
  • Reduce Local Delivery Costs with These Four Practical Strategies
  • Frequently Asked Questions about Local Delivery Costs
  • Reduce Local Delivery Costs with These Four Practical Strategies

What exactly is Local Delivery?

The transportation of a package from a distribution centre to a delivery location is known as local delivery or last-mile delivery. It is the supply chain’s final link. The last mile is what determines whether the package was delivered to the customer safely.

Local delivery should be avoided by businesses that require immediate delivery, such as food delivery services, enterprise supply chains, and one-day delivery services.

Local delivery has recently gained popularity, with global sales expected to surpass $200 billion by 2027, up from $108.1 billion in 2020.

How much does local delivery cost?

The costs of completing the last mile are known as local delivery costs. Local delivery costs are significant and play a significant role.

The cost of the last mile accounts for roughly 53% of the total cost of the entire process. Furthermore, due to the challenges associated with local delivery, it can be a costly endeavour.

As a result, it’s critical to take steps to reduce local delivery costs; otherwise, a company’s bottom line will suffer.

Why is it important to regulate local delivery costs?

The local delivery is the most expensive part of the supply chain. The stakes are high, and the risks are high, because local delivery is time-sensitive. The difficulties involved in achieving success are another indicator that local delivery is an expensive procedure.

Some of the challenges that come with local delivery are as follows:

Deliveries that must be made within a certain amount of time

When it comes to local delivery, time is of the essence. Food delivery, flower delivery, and grocery delivery are all examples of e-commerce businesses that are required to keep costs low and deliver on time.

Any delay can lead to a dissatisfied customer who may opt to use another service rather than yours. Service providers are now under increased pressure to provide faster delivery services.

The unpredictability of the real world

Making on-time deliveries while maintaining profit margins necessitates finding the most efficient route. But who can deal with the route’s unpredictability?

Local delivery delays are commonly caused by traffic jams, vehicle breakdowns, and rerouting due to roadblocks. Furthermore, these delays raise the cost of delivery and have the potential to disrupt the entire schedule.

Route planning must be done with extreme caution, taking into account all variables and monitoring real-time data. Failure in local delivery operations will become a common source of logistical loss if this does not change.

Wrongly delivered goods

For e-commerce logistics companies that handle local delivery, failed deliveries are a major setback. This increases the cost of delivery and forces you to reschedule your deliveries.

If the customer is not present at the time of delivery, this may occur. Your delivery drivers could also be to blame if they arrive late at their destination. As a result, every failed delivery increases overall delivery costs and necessitates time-consuming rescheduling.

Fuel prices

Fuel costs play a big role in whether or not you make money on delivery. Fuel costs rise as a result of increased traffic congestion, constant delays in arrival time, and the error of taking a long route.

Another issue is the fuel consumption capacity of the delivery vehicle. The cost of delivery rises in direct proportion to the amount of fuel consumed.

Fuel costs cannot be completely eliminated; they can only be reduced through the implementation of cost-cutting measures. As a result, dealing with this issue has become a little more difficult.

Consumer preferences are shifting

Customers are willing to pay higher prices for faster delivery without hesitation. Customers expect a better delivery experience; otherwise, they will shift their services from one company to another.

Customers also expect free shipping on their orders. However, as shipping costs rise, managing overall shipping costs and incurring additional costs becomes more difficult.

Furthermore, same-day shipping raises operational costs, making the entire process prohibitively expensive for the business.

Rising customer expectations, it can be concluded, are putting more pressure on local delivery companies to improve their services while maintaining profitability.

This necessitates the implementation of a strategic workflow management strategy.

Reduce Local Delivery Costs with These Four Practical Strategies

The process of making the best and most efficient use of a situation is known as optimization. As a result, by lowering local delivery costs, a local delivery service can be efficient.

To make this possible for any e-commerce delivery system, four main strategies have been listed below. Let’s take a look at what they’re all about:

1) Establish a delivery schedule

Understanding the significance of a delivery can aid in the creation of a better framework and the prioritization of important deliveries, making work management much easier.

For time-sensitive delivery businesses like food, flowers, and groceries, prioritize same-day delivery.

These e-commerce logistics packages must be delivered within a certain time frame, or the customer will lose interest.

Then you can look into the packages that need to be delivered that day. These packages are also time-bound for delivery, but same-day delivery takes a little longer than those that need to be delivered right away.

Delivery operations must be carefully managed in order to obtain the best customer feedback.

This simply means that the quality of service will never be compromised, whether traditional or instantaneous delivery is used.

2) Increase the efficiency of dispatching and routing

This is the most crucial step in maximizing the efficiency of local delivery. To relieve delivery drivers’ workload and ensure faster delivery, loading and dispatching processes can be improved.

To do so, you’ll need to do the following:

  • Make an ascending list of the orders based on their location and urgency.
  • In the order that the orders appear on the list, download them into the delivery vehicle.
  • Allow deliveries to be made to locations near the front door.

Then give the delivery driver the same list so that the correct parcels can be delivered to the correct locations.

This will help to avoid the chaos that can occur if the parcels are not properly organized.

Following the loading, you must focus on figuring out the most efficient route to the delivery locations.

The most cost-effective option for making multiple deliveries is to take a multi-stop route. A route planning and optimization app, such as Roundtrip’s EasyRoutes for Shopify, is required.

The route planning and optimization tool from EasyRoutes is designed to make quick deliveries on Shopify affordable and simple. You can now collect delivery proof, dispatch routes, and much more.

3) Make it easier for customers to do business with you

You won’t be able to stay in business for long if your customers aren’t happy, no matter what business you’re in.
Customers will appreciate it if you make things easier for them.

Two major factors must be improved in order to achieve better results: business efficiency and customer satisfaction.

Increasing customer convenience improves their experience while also increasing their trust in your brand.

With a tracking link and order tracking page, you can provide real-time package updates to your customers as soon as they place an order.

Allowing customers to track their package while it is out for delivery is another game-changer that can reduce the chances of a failed delivery. Because once a customer receives notification that a package is on its way, they are required to remain at the delivery location until it arrives.

A failed delivery could result from any delivery delays, as well as the customers’ unavailability.

Customers can be given a simple order tracking page where they can track their package and estimate when it will arrive, saving money on failed deliveries. This will save them a lot of time while also increasing your brand’s value and gaining customer trust.

4) Use technology to plan and optimize driver routes

With proper local delivery process optimization, cost breakdown of local delivery is possible. Many local delivery logistics have begun to use software to optimize workflow in order to keep up with the size of the local delivery market.
Technology can be used to plan and optimize driver routes.

A delivery optimization software can help you simplify management by assisting you with a variety of parameters. Some of the most significant advantages of local delivery software are as follows:

  • Manage your local delivery costs
  • Dynamically planned routes
  • Routes that include multiple stops
  • Customer’s delivery experience is better
  • Management of the delivery fleet
  • Improved delivery efficiency
  • Assisting with high-density delivery
  • Route scheduling
  • route dispatching

Overall, using a local delivery optimization software can help reduce costs while also improving customer satisfaction.

Frequently Asked Questions about Local Delivery Costs

What does the term “local delivery” mean?

The transportation of a package from a distribution centre to a delivery location is known as local delivery. It’s the last step in the supply chain, and it determines whether the package made it to the customer safely.

How can you improve the efficiency of your delivery operations?

Follow these steps to improve delivery operations:

  • Create a workflow plan
  • Maintain main records for deliveries
  • Optimize route planning
  • Prioritize the customer’s experience
  • Invest in optimizing software to automate your business

What factors influence a delivery service’s efficiency?

The strategies used by a delivery service to generate profits and avoid incurring additional costs determine its efficiency. Prioritizing important orders in order to increase revenue and reduce the impact of failed deliveries can help to ensure the efficiency of the delivery service.

What is the last-mile in the supply chain?

Local delivery refers to the delivery of a package from a distribution hub or warehouse to a delivery location, which could be residential, commercial, or an e-commerce lock-box.

How much does local delivery cost?

The costs of completing the last mile are known as local delivery costs. Local delivery costs are significant and play a significant role.

What are the challenges associated with local delivery?

The following issues confront a local delivery service:

  • Deliveries that must be made within a certain amount of time
  • Local delivery costs like fuel, insurance, salaries, etc.
  • Real-world issues that arise (bad weather, traffic, accidents, etc).
  • Missed deliveries and having to reschedule them.

What role does EasyRoutes for Shopify play in lowering delivery costs at the last mile?

EasyRoutes is a feature-rich route planning and optimization app. Delivery companies on Shopify should use this delivery management solution to plan and optimize their delivery routes because it makes the whole process easy.

EasyRoutes can help you in several ways. It can automatically optimize routes based on a variety of options you select, such as the number of routes you want, the time spent at each stop, and toll avoidance.

With EasyRoutes, businesses can concentrate on their core business operations while the algorithm handles the rest.

Get EasyRoutes on the Shopify App Store

About Roundtrip

Roundtrip's mission is to equip every business with the software tools they need to deliver products to their customers in a delightful way. Thousands of Shopify merchants worldwide choose EasyRoutes to power their local deliveries across dozens of product categories, from meal kits and groceries to coffee, cupcakes, kibble, and so much more. Our easy-to-use route planning and delivery optimization app is certified Built for Shopify, a two-time Shopify staff pick, and the top rated local delivery app on the Shopify App Store.

"I needed a routing app to save me hours of route planning for my drivers. This app came to the rescue and did the routing automatically for me, giving me back hours."
Lit Canteen
Vietnamese food delivery in Australia 🇦🇺
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