As eCommerce continues to surge, the stakes for last-mile delivery excellence have never been higher. Customers demand seamless experiences, with 76% expecting businesses to adapt to their delivery preferences and 83% wanting proactive updates. The challenge is clear: businesses must ensure operational efficiency, cost control, and customer satisfaction while navigating the complexities of the last mile.
The solution lies in tracking and optimizing specific metrics that directly impact delivery performance and customer experience. Here are the top 10 metrics you need to monitor to master last-mile delivery operations.
1. Allocation Efficiency Among 3PLs
Ensuring optimal allocation of orders to third-party logistics providers (3PLs) is critical for cost control and on-time deliveries. Businesses must balance the load among multiple 3PLs, leveraging their unique strengths and past performance.
How to Improve:
Automate allocation processes using smart platforms that evaluate rule-based selection, 3PL prioritization, and shipment characteristics. This reduces manual effort and boosts efficiency.
2. On-Time Delivery Rate
Late deliveries lead to customer dissatisfaction and lost loyalty, with 52% of customers abandoning businesses after a delayed delivery. Tracking the percentage of on-time deliveries is a straightforward but essential KPI.
Why It Matters:
Regularly monitoring this metric helps identify bottlenecks and enables data-driven decisions to improve delivery timeliness.
3. Delivery Re-Attempts per Order
Re-delivery attempts inflate costs, waste resources, and disrupt customer satisfaction. By tracking re-attempt rates, businesses can pinpoint inefficiencies in their process.
Actionable Insight:
Implement measures like predictive ETAs, automated customer notifications, and flexible delivery options to reduce failed delivery attempts.
4. Non-Delivery Reasons (NDRs) by Region
Frequent non-delivery reasons, such as incorrect addresses or customer unavailability, can vary by geography. Identifying these patterns allows businesses to tailor their operations to address location-specific issues.
Optimization Tip:
Use analytics to evaluate NDR data at the regional level. Address recurring issues with targeted interventions, such as better address verification systems or enhanced communication.
5. RTO Percentage and NDRs by Hub/3PL
Return to Origin (RTO) rates are a significant cost driver, with each return eating into margins. Tracking RTO percentages and NDRs at the hub or carrier level can highlight operational inefficiencies.
How to Reduce RTO:
Analyze hub-level data to identify weak links and collaborate with underperforming 3PLs to improve service levels.
6. Order Dispatch Time
The time taken to process and dispatch orders significantly impacts delivery speed. Longer dispatch times delay the delivery chain, leading to missed ETAs.
Solution:
Use automation to streamline pre-shipping tasks, such as label generation and carrier allocation. Businesses can reduce dispatch times by up to 28% with the right technology.
7. Fuel Consumption and Mileage Metrics
Tracking fuel consumption and total mileage helps businesses manage delivery costs and environmental impact. A high variance between planned and actual mileage often indicates inefficiencies.
Actionable Insight:
Adopt dynamic routing and real-time tracking to minimize unnecessary mileage and reduce fuel costs.
8. Capacity Utilization
Underutilized vehicles mean wasted resources. Tracking vehicle capacity utilization ensures maximum efficiency in asset deployment.
How to Optimize:
Leverage AI-powered tools to plan vehicle loads effectively, ensuring fewer trips and higher sustainability.
9. Average Service Time (AST)
AST measures the time taken to complete a single delivery, encompassing pick-ups, transit, and final drop-offs. High ASTs can signal inefficiencies in routing or delays in pre-shipping.
Improvement Strategy:
Streamline pick-up and transit processes with automation and dynamic route adjustments to lower AST.
10. Pickups Completed Within 24 Hours
Timely pick-ups are a strong indicator of overall last-mile efficiency. A high percentage of 24-hour pickups reflects well-coordinated operations.
Pro Tip:
Identify and address delays in pre-shipping processes to improve first-mile performance, positively impacting last-mile outcomes.
How Technology Drives Metric Optimization
Tracking and improving these metrics manually is both challenging and error-prone. This is where intelligent last-mile automation platforms like Lastmily step in, offering:
- Automated KPI Tracking: Configure and monitor delivery performance metrics in real-time.
- Smart Routing and Allocation: Minimize mileage and fuel consumption while ensuring timely deliveries.
- Proactive NDR Management: Address delivery failures with predictive insights and automated customer communication.
- Advanced Analytics: Gain actionable insights into trends, inefficiencies, and opportunities for optimization.
Conclusion
Mastering last-mile delivery requires constant monitoring and refinement of performance metrics. By focusing on these 10 key KPIs, businesses can reduce costs, improve delivery success rates, and enhance customer satisfaction.Platforms like Lastmily provide the tools needed to achieve these goals, enabling businesses to optimize their last-mile delivery operations while staying ahead in a competitive landscape.
