The rapid growth of the retail and eCommerce industries has fueled a surge in the courier and delivery sector. According to a report by Allied Market Research, the global courier, express, and parcel market is projected to reach $749.0 billion by 2031. This rapid growth places significant pressure on delivery providers, who already face challenges like labor shortages, inefficient resource use, rising fuel costs, and thin profit margins.
While adding resources may seem like a straightforward solution to handle increasing parcel volumes, this approach significantly increases last-mile delivery costs, which already make up around 53% of total shipping expenses. A more sustainable and cost-effective alternative is to adopt advanced last-mile delivery management solutions. Here are four strategies businesses can leverage through smart, AI-powered last-mile systems to make their operations more cost-efficient.
1. Automating Dispatch to Reduce Manual Effort
Manual processes such as order dispatch and delivery monitoring can be time-consuming and error-prone. Automating these tasks minimizes manual intervention, enabling delivery service providers to streamline operations and gain granular insights into order movements.
A highly flexible and customizable last-mile solution, like the one offered by Lastmily, empowers businesses to automate dispatch, monitor deliveries in real time, and achieve seamless operational efficiency. This saves both time and money, making last-mile delivery more affordable and scalable.
2. Optimizing Routes to Cut Fuel Costs
Poorly planned routes lead to unnecessary miles, which drive up fuel consumption and costs. AI-driven last-mile solutions, like those from Lastmily, use intelligent route planning to factor in variables such as delivery locations, time windows, rider proximity, and order volumes.
This approach maximizes trip productivity and delivery speed while ensuring vehicles operate at full capacity. Businesses can see up to a 31% increase in vehicle utilization and a 14% boost in deliveries per rider—key metrics for cutting operational costs.
3. Providing Multiple Delivery Options to Minimize Failures
Failed deliveries—caused by issues like incorrect addresses, customer unavailability, or fraudulent entries—can significantly inflate costs. Return-to-Origin (RTO) shipments alone can cost up to 66% of the original item’s price.
With a smart last-mile platform, businesses can offer a variety of delivery options, including curbside pickup, home delivery, slotted delivery times, and PUDO (pick-up and drop-off points). By increasing delivery flexibility and accuracy, companies can reduce the likelihood of failed deliveries and their associated costs.
4. Smart Order Clubbing for Efficient Resource Use
Scaling operations during high-demand periods like holiday sales often requires additional fleet and manpower, which drives up expenses. Lastmily’s intelligent systems enable smart order clubbing, combining new orders with already scheduled deliveries based on constraints like location and delivery times.
This method ensures that vehicles are utilized to their fullest potential, reducing the need for extra resources. Additionally, return pickups can be integrated with existing delivery routes, eliminating the need to create separate reverse logistics journeys.
Unlock Cost-Efficient Deliveries with Lastmily
Modern last-mile solutions, such as those provided by Lastmily, harness the power of artificial intelligence and machine learning to give businesses complete visibility over their delivery processes. These tools offer actionable insights, enabling data-driven decisions to improve customer satisfaction, operational efficiency, and cost management.
Investing in smart automation allows companies to scale operations seamlessly, optimize resource usage, and enhance delivery productivity—all while keeping last-mile delivery costs in check. Embrace these strategies to make your deliveries smarter, more efficient, and cost-effective.
