The nail-biting end to the 2020 holiday delivery season underlined the fact that eCommerce was absolutely vital this year. Prior to the holidays, June online sales increased 76.2% YOY. Although third quarter retail results slowed, YOY Q3 online gains were up by 37.1%. A busy year indeed, especially for last mile delivery fleets.
While 2020 gains reflect a year with unusual and tragic circumstances, there’s every reason to believe that consumer habits and expectations are forever changed. As new habits stick, there’s increased opportunity for last mile delivery fleet growth. Looking to the future, expected increases for last mile delivery will be 44.88 billion USD in the 2020-24 period.
As with many other industries, delivery service pressure points are operations costs, customer satisfaction, and management of inconsistent volume. Last mile delivery is the expensive part of the trip and will increasingly face pressure to be competitive. For a last mile delivery fleet, the only place to sharpen cost savings while maintaining customer loyalty is through efficiencies. It’s a high wire balancing act with no room for waste. So where do you look to provide superior service at a profit?
Up to 95% of consumers say they will look elsewhere if the delivery doesn’t fit their needs. To be fair, we all know these challenges from our own shopping habits. In rural areas, distance is the problem. In urban areas it’s the unpredictability of traffic congestion. Each scenario puts different stresses on your vehicles and fleet team. Ignoring the problems can lead to downtime impacting your ability to fulfill service and promise on-time delivery.
Do you know which of your vehicles and routes are slowing things down? Tracking, telematics, and data analysis can help you to measure in-motion, stopped time, and stops per vehicle. Are you optimizing your routes? Well-planned routes save not only time, but vehicle wear and tear, unnecessary downtime, and conserve fuel. But, most of all, on-time delivery depends on keeping your vehicles on the road.
With the varied driving conditions of last mile delivery, targeted preventative maintenance can become a challenge. Are you using technology to help you? Your telematics reporting should capture each vehicle’s tire pressure, odometer, and oil life. You should have a view into which of your vehicles are impacted as soon as maintenance needs to be scheduled. Do you need more frequent oil changes due to routes with short distance deliveries? Is ignored tire pressure impacting fuel usage? Does start and stop traffic impact brake wear? Is licensing up to date?
During peak times of volume, do you have the flexibility to find a conveniently located PM or repair vendor quickly and conveniently? Is payment electronically managed, eliminating paperwork for the driver? Are you covered by 24/7 roadside assistance that is available everywhere and whenever you need it?
In these times of high volume, your drivers need to focus on doing their jobs safely and efficiently. Leave the oversight of vehicle maintenance and compliance to technology and reporting.
And don’t forget to sweat the small stuff – like wipers, seat belts, and defrosters. Be aware that poor maintenance can be a contributor to crashes and impact driver safety.
With ongoing concerns about driver shortages, attracting the best drivers and keeping them healthy, safe, and happy is good business sense. Unsafe drivers and vehicles can be a company liability.
There are multiple facets to keeping drivers safe. Never having another accident may come to mind, but other aspects of the driver experience such as physical comfort and elimination of stress can impact the quality of the driver experience – and ultimately the efficiency of your last mile delivery fleet.
Are your drivers safe from unnecessary COVID-19 risk? OSHA has released recommendations for delivery drivers which endorsed the following:
In an effort to fully support your drivers, consider your drivers’ security. Today’s driver safety programs combine in-cab devices aligned with AI to assess situational risk both inside and outside the vehicle. Specific alerts can be enabled for high-risk driving behaviors the moment they occur based on the severity of the distraction.
Such programs, when implemented within a company-wide attitude of safety culture and additional training, communicate to the driver that the systems are for their well-being. No driver wants to endure an avoidable crash.
Fuel costs can account for 20-30% of last mile delivery vehicle overhead, dependent upon the types of routes, vehicles, and adherence to PM schedules. Do you have measures in place to accurately track usage?
Your reporting should track fuel expenditures and point to where waste or fraud occurs. Accurately tracking out-of-route miles, idling, stop/starts, short trips, or inaccurate fueling illuminates inefficiencies.
Are you taking advantage of a fuel card program with exception reporting and volume discounts? In addition to reporting, a fuel program can set limits such as daily spending amounts or frequency of use restrictions. This essentially eliminates out-of-pocket expenses for drivers. Exception reporting can notify you when the mileage per gallon or odometer readings just don’t make sense.
A good program will point your drivers to the closest, most economical fueling site when they need to fill up. Precise reporting, coupled with accurate routing and a well-maintained vehicle can trim your fuel expenditures and save your driver administrative time.
Last mile delivery vehicles need to be right-sized and equipped to handle the freight, routes, and driving needs of your business. Driver safety, ergonomics, regulations and fuel economy are musts in developing your specs. While sourcing your vehicles, consider the driver’s repetitive use and need to access various parts of the vehicle. Are these daily functions incorporated into the design to streamline your driver’s tasks?
It could be time to take a look at your current delivery fleet and decide if you have the right number of specs giving you the right vehicles. One spec may not work for the entire fleet, but for the sake of efficiency you don’t want to develop too many. In reviewing your fleet, you may find that certain routes and traffic conditions take a toll on engine life. In other areas, moving to a smaller, more full-efficient engine might work just fine.
An analysis could tell you that the maintenance of older vehicles is costing you more per mile than cycling in new ones. When the time comes to consider new vehicles, revisit options that you may have passed on previously. For instance, would hybrids be a good choice for your city deliveries? Don’t be afraid to take another look at emerging technologies. If it really is time for a change, be certain that you get the best prices when cycling out the older vehicles.
There are a lot of considerations in right-sizing your delivery fleet, along with one big question: do you have the analysis and reporting that points to the right answers?
Fleet data and analytics reporting provide a clear view into your vehicles’ true operating conditions and costs. Armed with this information and working with the experts to properly engineer your fleet, you can attain your real business goals: timely, driver-safe, fuel efficient delivery allowing you to maximize your volumes.
Managing all of these demands along with tight, sometimes impossible volumes and delivery deadlines can seem impossible. Unnecessary repair downtime, driver shortages, missed PMs, or wasted fuel can cause the best logistics to spiral out of control, sometimes taking you away from your essential duties.
In order to take advantage of fleet industry best practices, have you thought of enlisting an all-encompassing fleet solution? You’ll eliminate time lost to the administration of multiple vendors for licensing, maintenance, telematics, and fuel while focusing on gaining new customers and delivering their packages – which is probably more aligned with your business objectives.
In addition to making day to day operations run smoothly, a Donlen-managed fleet saves an average of 10-12% of overall gross operating expenses. Click to learn more about how Donlen can optimize your delivery fleet.
For more details on optimizing delivery fleet efficiency, click our link for a free PDF of Donlen’s “5 Powerful Tactics to Optimize Your Delivery Fleet” Guide.