Whether you’re a retailer, manufacturer, distributor, or healthcare provider, your delivery needs are ramping up. If you’re like many companies with final mile logistics needs, you have a roster of individual and on-demand drivers, but you’re also finding that coordinating their schedules is a hassle and not everyone is as reliable as you’d like them to be. So, you’re considering purchasing vehicles, hiring full-time drivers, and handling your delivery in-house. Sure, it’s a large expense upfront and comes with a fair amount of risk, but it could ultimately pay off…right?
Before you make this significant investment, consider an alternative solution, one that thousands of companies across the US use every day, across every sector to the delight of their internal teams and customers: partnering with an experienced final mile logistics provider.
Unlike going it alone to manage your last mile logistics, a final mile partner can help you lower delivery costs, minimize risk, and spur customer satisfaction through high-quality delivery experiences. Here are four factors to consider before implementing your own fleet:
Before investing in a fleet, we encourage businesses to ask themselves: is delivery a core competency of your business? And more importantly: at the end of the day, is making delivery a core competency something you want to put precious time and money into?
Because final mile providers have already invested in the delivery infrastructure businesses need, you automatically reap their economies of scale. Even more: by having a trusted partner handle your delivery needs, your business gains more time and money to invest in competencies where you excel.
Working with an experienced final mile partner like USPack frees up our partners. The specialty pharmacies we work with can stop worrying about route logistics and spend their time as pharmacists. Our appliance retailers can channel their time and resources into sales and service without sacrificing time to troubleshoot a late delivery that requires their customer to be at home.
Furthermore, with expertise comes greater flexibility. Partnering with a delivery specialist gives you room to make changes. If you have a delivery schedule change, there’s no need to source new drivers to handle the new timing. Moreover, if you need to pare back or ramp up deliveries, it takes just one call to your final mile provider—no need to sit on unused resources or invest in new vehicles.
When considering bringing delivery in-house, many companies initially budget for the most obvious assets: employing drivers, sourcing vehicles, and fueling these vehicles. But beyond these initial costs lies an iceberg of hidden costs that can quickly eat up budget.
Here are a few costs to consider that may not be top of mind:
- New employees: If you’re bringing delivery in-house, it’s likely you won’t just be hiring a roster of drivers. You may also need to hire more human resources personnel, create new managerial positions, and employ logistics professionals to handle routing and administrative tasks. Perhaps you’ll need to bulk up your customer service department with new reps to field delivery questions and concerns.
- Insurance: More infrastructure means more insurance premiums to pay. When acquiring a new vehicle, you’ll have to handle registration costs and take out a liability insurance policy. You’ll also want to invest in workers’ compensation insurance if one of your drivers is injured on the job.
- Vehicle storage: Most companies must rent or buy warehouse or lot space to house their vehicles. The costs can escalate quickly in areas where weather—either extreme heat, snow or flooding—are recurring challenges.
- Unutilized Assets: If you aren’t currently using a vehicle, it’s still costing you money. You may still be paying it off as it’s sitting in rented warehouse space. Plus, you’ll still need to pay for vehicle insurance whether or not it’s in use, as well as routine maintenance on oil, fluids, tires, etc.
With a final mile partner, the overall cost is much more predictable, and you have built-in flexibility to scale up or down quickly.
Handling delivery in-house means your business is taking on new risks, some of which can have severe financial consequences.
Picture this: One of your drivers gets injured in an accident in which your delivery vehicle is rendered undrivable. Immediately, you lose an employee for several weeks and must source a new truck.
This scenario can get even more costly. Unfortunately, the accident was your driver’s fault, and another party was injured. Now you must cover the cost of that person’s car damage. You may even be faced with a civil lawsuit to cover their treatment costs, pain, and suffering. That’s a huge amount of financial risk for a company to take on.
While this may be an example of a worst-case scenario, other risk factors can add up. Here are a few more examples:
- Changing needs: Let’s say you expand the size of a product. But now the product is just too long or too wide to fit into any of your vehicles. Overnight, your vehicle investment goes down the drain.
- Unreliable employees: Cutting ties with an unreliable employee can be financially and emotionally draining—and chew up HR energy—than simply ending a contract with a final mile provider.
Technology is a key element to getting delivery right, but all too often overlooked in the fleet decision-making process. On the customer service end, you need GPS tracking services and a communications platform to give your customers visibility into their deliveries. On the logistics end, an advanced tech solution can provide you with data to help you optimize routes and schedules and cut costs.
However, technology cannot be a logistics advisor on its own. To leverage your technology to its full advantage, you need logistics experts to understand the metrics and glean the most usable insights and IT pros to immediately remedy any tech issues. Once again, these costs can add up.
At USPack, we are experts in technology and our Adaptive Delivery Driven Intelligence (ADDI) platform is seamless when it comes to customization and implementation. Our logistics experts turn data into actionable insights and our full-time IT department is at your service to quickly troubleshoot issues.
Avoid the costs and risks of managing your own fleet by partnering with USPack
With 30 years of final mile experience, a team of seasoned logistics advisors, and a cutting-edge platform that gives you and your customers complete visibility into delivery status, USPack is a last mile provider that thousands of businesses all across the US trust and depend on. We’re your reliable outsourced partner to optimize your delivery process, cut costs, and spur customer satisfaction. Contact us to learn more.