Omnitracs' Road Ahead blog

The five biggest challenges that haunt last mile deliveries

Cyndi Brandt
VP of Product Marketing

Every day we learn about a new innovation happening in the last mile delivery space. It can feel like the world is our oyster, with new opportunities around every corner. And while technology is driving an enormous amount of change, there are still many hurdles we need to overcome. It’s important for fleets to have a solid understanding of major last mile obstacles to develop an actionable plan to mitigate them. It all boils down to how companies can deliver goods in an efficient manner that helps boost the bottom line. 

From fleet operation black holes to deadhead miles, there’s no doubt that last mile delivery has its fair share of bumps in the road. Here are the five biggest challenges to keep in mind:

  1. Deadhead Miles: Deadhead miles can cost fleets a pretty penny if they are not closely monitored. These miles add up quickly if truck drivers do not follow their designated routes. For drivers, it may seem harmless to travel 10 miles off their route to visit their favorite lunch spot. The reality? The extra mileage can create major overhead costs, especially when you consider that the average trucking cost per mile in the U.S. is $1.59, according to data from the American Transportation Research Institute (ATRI). This total accounts for various factors such as fuel costs, maintenance, insurance, and tolls, which is why the extra stops can severely impact the bottom line. Make sure to have an open line of communication with drivers and keep track of deadhead miles. If managers can share the amount of money lost from deadhead miles in a week or month, it will help drive home the message of why it’s so crucial to avoid them when possible. 
  2. Fleet Operation Black Holes: It’s imperative that fleet managers have real-time visibility into their drivers’ locations, especially when it comes to last mile deliveries. Black holes are created when there is a breakdown in communication between the driver and fleet manager. Why the concern? Without an understanding of your driver’s location, there is no way to determine when a delivery is actually going to arrive versus when it’s scheduled to arrive. Fleet managers must review route plans with their drivers and confirm the order in which deliveries will be made. Using technology like telematics or mobile dispatching to secure real-time updates can help fleet managers stay in touch with drivers throughout the trip. Was someone blocking the loading dock for an extra 15 minutes? That might put the driver behind schedule, but at least fleets can covey why there’s a delay. This knowledge is invaluable, helping to build customer loyalty and trust. 
  3. Tribal Knowledge: There are unwritten, cumulative pieces of knowledge that make routers and drivers more efficient. Unfortunately, many times fleet managers don’t realize this until a knowledgeable employee leaves the company. Before it comes to that, managers should make sure to capture that knowledge and build it into their daily route plans. For example, knowing when certain customers wish to receive deliveries, where to park, who to ask for a signature, whether a picture needs to be taken, or who the point of contact is for getting paid. Pairing these insights with route optimization software creates even more efficiencies as location comments can be entered with each service location to show up on a driver’s mobile device.

    Oftentimes, distribution companies will hire someone who was once a driver or warehouse worker to oversee the routing of trucks. This can create an issue if they are not properly trained on using routing software, forcing deliveries to take longer than they should. It’s important for fleet managers to properly train employees and draw on their industry expertise to create a seamless delivery schedule. 

  4. Data: One of the most difficult last mile challenges can be analyzing data. Many fleet managers struggle with how to use data to improve the bottom line. One of the most alarming aspects is when fleet operators don’t know how to find the data to understand their cost per mile or cost per stop. If you deliver 20 cases of beer to generate 200 dollars in revenue, and your delivery costs are 75 dollars,  you’re profiting 125 dollars. Having this data available is critical to ensure you’re making money, and the right solution can make it easy to pull and analyze data. 
  5. Idling:  While we’ve covered a lot of ways fleets can lose money, one that is often overlooked is idling. Idling for one hour equates to one gallon of gas lost. It also causes wear and tear on the vehicle and prompts more frequent maintenance on a truck. The American Trucking Associations (ATA) reports that one hour of idling per day for one year results in the equivalent of 64,000 miles in engine wear. Whether a driver has the A/C running during his lunch break, or leaves the engine going during a quick delivery. Just 10 seconds of idle time wastes more fuel than restarting the engine. To reduce idling costs, fleets can integrate start–stop systems to shut off the engine when it would otherwise idle and telematics systems that monitor usage parameters. 

While the hurdles associated with last mile delivery can be overwhelming, the good news is that each of these challenges can be solved with the right plan and technology in place. Last mile delivery doesn’t have to be daunting or scary — just take it one step at a time and assess which areas are operating successfully and which areas could use some improvement.