How to Reduce Last-Mile Delivery Costs

The writer of this article is a Marketing Executive at Locate2u

There are several challenges when it comes to last-mile delivery such as costs, efficiency, inefficient route planning and overall visibility. 

The changes in customer demand and the increased number of last mile deliveries has made it extremely difficult for businesses to keep up. Last-mile delivery is the most expensive part of the delivery process due to higher rates of failed deliveries and fuel and maintenance costs.

Unfortunately, this world isn’t getting cheaper which is why you should be looking for methods to cut down last mile costs so you can increase your delivery business’ profitability.

Last-mile delivery challenges


As mentioned above, the last-mile is the final and most important stage in the delivery process. This is a result of higher numbers of failed deliveries where a customer might not be home so the driver will have to return later on. It’s inconvenient as it is expensive.

Another reason is that drivers are likely to be stuck in traffic where they’ll experience more idle time, increasing the amount of fuel being used and wear and tear on the vehicle. More time spent on the road increases the need for maintenance.


The last mile is such a time-sensitive part of any delivery and can be hard for businesses to keep up with. Failed deliveries and lengthy delays can cause operational costs to skyrocket and profits to drop.

Customers can also lose trust in your business should their order not be delivered at the allocated time. This can lead to negative reviews published online for others to see, jeopardising your customer retention.

Inefficient route planning

Not having the most inefficient routes planned for your delivery drivers is another issue businesses face when dealing with the last mile.

There are so many things to consider when planning routes such as driver availability, the number and type of vehicles within your fleet, what is being delivered etc. This takes hours and is more susceptible to human error.

Customers can improve their last-mile delivery and reduce operational costs by planning deliveries with a reliable route optimisation solution.

Ways to reduce last-mile delivery costs

Route optimisation

Dispatching and assigning deliveries to your drivers is extremely lengthy where a multitude of factors need to be considered, as mentioned above.

Route optimisation is a solution that builds the most efficient routes for your driver in minutes instead of hours so every booking can be completed productively. That way you can allocate time on other aspects of your business so you can boost your team’s performance and meet customer expectations.

This technology also ensures that drivers are spending less time stuck in traffic and reducing any excessive idling so you can minimise fuel expenses.

Receiving large time-windows with no access to real-time updates can put a bad taste in the customer’s mouth. If a driver attempts to deliver an item and the customer isn’t home, this incurs unnecessary costs for your business and a negative delivery experience.

Sending customers a live tracking link of their order gives them full visibility of the delivery status so they can be made part of the delivery process. There’s nothing better than knowing when your order will arrive.

Proof of delivery

When completing a delivery your driver should always collect some form of evidence to avoid any errors and money being lost. If a customer has said they’ve received a damaged parcel but the driver delivered the item safely, how can you prove this?

Digital signatures and images help reduce the risk of customer disputes and gives businesses relief that every booking has been completed successfully.

Proof of delivery enhances your security and limits the potential for having to reimburse customers for damaged or missing goods.

Delivery management software

Proof of delivery, route optimisation and GPS tracking can all be accessed through a delivery management software.

Delivery management software automates the entire delivery process so you can be at the top of your game and keep customers happy. Depending on the software you choose to opt with it can have your routes optimised in minutes, manage bookings, access to GPS tracking, proof of delivery


There are many things you can do to tackle last-mile delivery obstacles and reduce costs for
your business. This can be achieved through route optimisation, proof of delivery and real-time updates which can be accessed by a reliable delivery management service.

This article was written by Chelsea Woods, Marketing Executive at Locate2u