The rise in ecommerce channels has also brought transformation and changes for the logistics industry. It has become crucial to offer an excellent delivery service in last-mile delivery to ensure customer satisfaction. Certain metrics can be used to measure the success of last-mile delivery, and we will discuss these metrics.
Last-Mile Delivery Benefits
Last-mile delivery pertains to the last step of transportation when packages are delivered to their intended destination, usually the customer’s doorstep. Last-mile delivery is the most expensive step of the process. Last-mile delivery does offer some benefits, which include:
- Streamlined delivery process
Last-mile delivery solutions are capable of automating many time-consuming and repetitive tasks that occur in the delivery process. Through automation, the business can save time, money and resources that are usually used. Some of the things eliminated through last-mile delivery solutions include manual tracking methods, including handwritten receipts, waybills, and notes that do not contain barcodes that are time-consuming and lead to human errors.
- Route optimization
Last-mile delivery solutions assist last-mile carriers by providing real-time data and alerts regarding bad weather or traffic. Last-mile carriers will also receive information about alternative routes that would be most efficient, allowing them to avoid any route disruptions that slow down deliveries.
- Better order management
Even with the assistance of the best systems, delays will likely happen, and there is nothing else you can do to resolve them. Still, the only option would be to inform customers about the anticipated delays allowing them to manage their expectations. Last-mile delivery assists in sending alerts to customers about potential delays, allowing better expectation management and customers to maintain their trust in your brand. Customers will receive automatic delivery updates to know the exact delivery times to ensure that they are available to accept orders.
- Customer satisfaction
Some customers are not comfortable sharing their banking details online or using their cards, and the pay-on-delivery option would be the most viable option for those users. The pandemic has also increased the demand for contactless payments when their packages reach the doorstep. Last-mile delivery solutions assist in making it easier for customers to pay for their orders as there are multiple payment options in the delivery app. The delivery apps also allow customers to rate and review the service they received, allowing the business to make improvements that will enable them to meet customer expectations better.
Last-Mile Delivery Metrics
- Order accuracy
Orders should be checked and verified to ensure that they are packed according to the customer’s demands. Failing to do so will have disastrous consequences as they will lead to unnecessary disputes and grievances from customers. Therefore, order accuracy can be measured by dividing the number of shipped orders by the number of deliveries that have been sent out without receiving complaints.
- Average service time
Average service time refers to the total amount of time spent fulfilling one order. Essentially, it consists of the total time spent picking goods from the warehouse, completing pre-shipping documentation, and finally delivering goods to the customers’ doorstep. Therefore, the average service time refers to the time spent at the store versus the number of deliveries that should be made.
- Damage claims
Even when the necessary precautions are exercised during the delivery process, goods might still be damaged during transit. Damages that occur during the delivery process will lead to businesses experiencing business loss and long-term credibility crises. Therefore, by computing damage claims as KPI, you can reduce the chances of damages occurring. Companies can calculate damage claims by dividing the total number of claims they receive compared to the number of shipments they send.
- Fuel consumption rate
Calculating the amount of fuel consumed can prove challenging, especially when it comes to intermodal transportation. It can be challenging as there isn’t a precise manner indicating how much fuel was saved or wasted on a particular day. However, companies can use a formula to calculate the fuel consumption rate to decipher the interval-based consumption rate. The fuel consumption rate can be calculated by computing the average fuel prices per vehicle per route.
- Time of delivery
The time when deliveries are made is crucial and is regarded as the most important KPI. It is essential as the final delivery time offers a broader view of operational efficiency and the effectiveness of the delivery strategy in place. To measure the delivery time, you can calculate the total time spent to complete every order during the span of a single day.
- Cost per km
Businesses must keep track of the costs involved when they are executing orders per vehicle, per kilometre. For businesses to calculate the costs involved, they will need to calculate the total number of shipments that occur at a given route at a specified time and the price. The average will reveal the total costs that the company incurs while trying to fulfil its last-mile obligations.
- Fleet capacity utilization
The fleet capacity utilization can be calculated by dividing a vehicle’s available capacity and its total carrying capacity. A business that has greater available capacity than its carrying capacity indicates its routing procedures are below par. However, if its carrying capacity is higher than its available capacity, the company needs to relook its loading processes.
- Unnecessary Stoppages
Unnecessary stoppages are regarded as the most straightforward last-mile metrics. Unnecessary stoppages track the total number of stops that a vehicle makes during the delivery of orders. Having a high stoppage leads to an increase in the overall fuel costs. However, a low stoppage KPI indicates that operations are quick, efficient and streamlined.
Last-mile delivery is all about ensuring that customers receive their packages on time and that they are satisfied. It is, however, essential that you constantly measure metrics to ensure that the business is meeting expectations, and the metrics mentioned above will assist in doing that.