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Last Mile Challenge #1: Dealing with Increasing Operational Expenses

Last-mile delivery is the most important and expensive part of supply chain and logistics. As much as 28% of shipping expenses can be attributed to last-mile delivery operations alone. Although it’s extremely important to invest in last-mile operations as it directly impacts customer experience, there is always a need to optimize costs, especially at a time when it’s becoming imperative to ensure free of cost and same-day deliveries.

The question is how? 

Advanced last-mile delivery software is of immense help when it comes to reducing operational costs. It makes deliveries profitable by reducing fuel consumption, increases first attempt delivery success rates, eliminating expensive manual dependencies and mitigating risks. Let’s quickly delve deeper into each of these factors. 

Reducing Fuel Consumption
Reducing the miles that a vehicle needs to travel while moving freight from different locations significantly reduces fuel consumption. Advanced last-mile delivery software, leverage machine learning to determine the most fuel-efficient route to travel from point A to B to C. By optimizing delivery routes, businesses can make deliveries profitable by reducing miles per delivery. 

Vehicle idling is another major reason behind increasing delivery costs and excess fuel consumption. According to a Sustainable America report, the average American driver spends more than 16 minutes a day idling their vehicle. In the US Idling burns through 3.8 million gallons of gas every single day, resulting in a daily waste of $7,980,000. 

With advanced GPS and IoT capabilities, advanced last-mile delivery software sends real-time alerts to delivery stakeholders in case a driver leaves the engine running when idle for more than a stipulated period of time. These alerts can be quickly escalated to senior stakeholders to ensure a faster resolution and eliminate unnecessary fuel consumption. 

Eliminating Dependency on Manual Intervention
Traditional means of executing last-mile delivery operations include heavy dependence on manual labor, and it cannot be denied that manual work is expensive and prone to errors. Advanced last-mile delivery software can drastically reduce the need to keep human resources to execute logistics operations. It automates tasks like route planning, task allocation, managing KPIs, in-pant operations and more. Automation also reduces investments made on paper consumption. 

Poor First-Attempt Delivery Success Rates
According to a Post and Parcel report, in the US failed deliveries cost the country $216,171 a year. It is extremely important, especially for post and parcel companies to ensure high volumes of first attempt delivery success to keep a check on last-mile delivery expenses. Inaccurate address is one of the main culprits behind rising first attempt failures.

Advanced last-mile delivery software powered by machine learning algorithms (ML) has the ability to self-learn the ‘correct’ address just from delivery addresses, successes, and failures in the past. In other words, it converts lexical addresses into geographic coordinates (geocoding) as simple as latitudes and longitudes, which are used to mark positions on a map. Once delivery is done successfully on any address, next time, the system can fetch the address internally, so that the last mile connectivity will be faster and more accurate. Geocoding capabilities increase address accuracy and boost first-attempt success rates.

Mitigating Transportation Risks
Supply chain theft is estimated at $35-40 billion per year in the US. To address this problem businesses need to have granular-level visibility of logistics operations. Advanced last-mile delivery software can scan through historical data of previously traveled routes and generate critical insights on incidents of theft and pilferage. Such software has helped global businesses reduce incidents of theft and pilferage by more than 50%.

All these factors add up and empower businesses to significantly reduce delivery expenses and shrink the total cost of ownership.FarEye has been empowering global enterprises to reduce and optimize last-mile delivery costs. Signup for a quick demo here to know how we can help you achieve the same.