Beat the Last Mile Delivery Costs with Vehicle Tracking Technology Rastrac Team | Mar 2, 2017 10:13:00 AM

One of the things about transporting goods across long distances that many outside of the transportation/shipping industry don’t realize is just how much that last mile can cost. Between the extra fuel often wasted sitting idle in traffic, the lost productive time as trucks sit waiting in lots to unload cargo, hours of service (HOS) reset periods, and countless other issues that tend to crop up at the end of a long-distance drive, the costs of the last leg of a delivery chain can really stack up.

According to estimates by The Council of Supply Chain Management Professionals cited in a report by the Delaware Department of Transportation, “as much as 28 percent of all transportation costs occur in the last mile.”

That’s kind of an astounding number when you think of how a pallet of cargo could travel hundreds of miles, but you’d spend as much as 28% of your transportation costs on that last part of the delivery chain.

By beating these last mile delivery costs, transportation companies could save a significant amount on their overhead—but the question is “how?”

One strategy is to use GPS vehicle tracking technology to improve delivery operations by:

Optimizing Last Mile Route Planning

Dealing with traffic is rarely ideal for any delivery route, whether it’s the first mile or the last one. This is why a lot of companies handling long-distance deliveries rely on freight to cover the majority of the distance whenever possible.

However, sooner or later, individual trucks, vans, and other vehicles will have to be sent out to finish the last leg of the delivery process.

With GPS fleet tracking systems, fleet managers can optimize delivery routes and which roads drivers take to minimize the fuel wasted sitting idle in traffic or taking over-complicated routes.

This can be especially useful for getting around traffic jams, wherein one road along a route might be jammed, but other parallel routes might be mostly clear. Additionally, you could better plan out how to consolidate loads intended for different nearby destinations based on your improved route plans.

This not only reduces fuel burned sitting in idle, it can lead to more deliveries being completed per driver per day, reducing the overall last mile costs of each delivery.

This is as true for large semi-truck trailer loads as it is for delivery vans on the last leg of an e-commerce delivery chain.

Improving Delivery Schedule Adherence

Making sure that drivers on the last link of a critical supply chain use their time efficiently has long been a major challenge for fleet managers.

Using GPS tracking, fleet managers can see what routes drivers are taking, how well they’re adhering to their routes, how safely they’re driving, and whether or not they’re moving from point to point in a timely manner.

Armed with such detailed data, fleet managers have more power than ever to manage assets in the field and correct wasteful driving behaviors before they become habitual.

Reducing Failed Deliveries

This is a concern that mostly affects B2C deliveries rather than B2B deliveries: the driver shows up with the shipment and a “must-sign” instruction, but the recipient isn’t present to sign. As a result, the delivery isn’t completed, the customer doesn’t get what they wanted, and the driver’s time is wasted.

Such situations are rarer with B2B supply chains since the recipient typically has a stable set of operating hours during which shipments can be delivered. However, delivery failures and disputes can still happen in B2B chains.

Preventing failed deliveries and disputes with GPS systems is at least a two-step process.

First, if a package/shipment recipient has specific hours of the day where they can guarantee they’ll be available to accept delivery and other times where that won’t be the case, you need to know that. So, setting up a form field on orders specifying a desired delivery time window is a must.

Second, you have to set up a delivery route plan that will allow the driver carrying that particular shipment to arrive at the designated time. Using GPS route planning can allow you to dynamically change the route if a high-priority shipment is at risk of being missed.

If a dispute arises from the delivery later, you can check the GPS tracking data to see if the driver was present to make the delivery during the preapproved delivery time window.

By reducing failed deliveries, your drivers won’t have to make as many repeated trips, saving time and money. By tracking GPS data, it’s easier to resolve disputes and potentially avoid penalties for failing to meet delivery obligations.

These are just a few ideas for reducing the costs associated with the final leg of a delivery chain using GPS tracking systems.

Have a favorite strategy for reducing last mile delivery costs? Share it in the comments below!