How to Start a Delivery Business With Contract Drivers?

Did you know that the global market for delivery services is projected to grow at a compound annual growth rate (CAGR) of 7.9% between 2020 and 2025?

Thanks to today’s customers, who are increasingly seeking convenience and flexibility in having everything delivered to their doorstep, this global delivery industry is set to grow manifold.

While this may sound like an exciting opportunity to venture into a delivery business, you must remember the high competition in the industry. 

Therefore, merely learning how to start a delivery business with contract drivers doesn’t suffice today. It is equally imperative to ensure that you can stand out from your competitors to achieve sustainability.

If you are also looking to start a delivery service and make it successful but are clueless about how to proceed, this blog is for you. It walks you through the steps to starting a delivery business, including determining your niche, streamlining your fleet dispatching operations, and maintaining constant communication with customers.

5 Steps to Starting a Delivery Business

To start your delivery business, you can determine a niche. Then, you need to sort out your delivery service’s back-end and front-end processes. You can then hire and train drivers and use a route planner to plan efficient routes for them to follow.

Let’s understand these steps in detail.

Step 1: Define a Niche for Your Delivery Business

Apart from the big guns in the market, like Amazon, FedEx, and UPS, there are quite a lot of opportunities for new delivery businesses and drivers. This is mainly because most small, medium, or even large-sized businesses in the market need affordable ways to get products to their customers.

So, instead of delving into multiple delivery service types, it is often advisable to start by identifying your niche to start with, especially if you are totally new to the delivery industry. This will help you figure out the demand for drivers based on that. It will also help you determine the costs involved in hiring delivery drivers on contracts and acquiring delivery vehicles.

Let us narrow down potential markets for delivery businesses for you:

Food delivery business: Partnering with local chefs and restaurants.

Grocery delivery business: Delivery grocery from supermarkets to the customers.

Liquor delivery business: You don’t need to start making your own alcohol; just partner with breweries and stores that sell it.

Meal-kit delivery service: Partner with meal-kit businesses and be their official delivery partner, handling all their delivery tasks.

Courier service business: Start a local, more affordable courier service in selected zip codes and cities.

The advantage for new delivery businesses is that they get an opportunity to provide a more personalized, hands-on delivery to the target market, which is often missing in deliveries from the giants in the market. 

Once you figure out your niche, it’s time to optimize your last mile delivery process and make it more effective. Whether you are starting a large courier delivery company or a small business planning to deliver packages, the basics of last-mile delivery will be the same across all businesses.

Step 2: Sorting Out the Back-end Process for Your Delivery Service

Accepting and processing orders received from your clients will depend a lot on your niche. 

For instance, operating a local restaurant and adding food delivery aspects to the business will be very different from operating the back-end process as a large e-commerce company. 

The design and the convenience of your back-end process will also depend largely on whether you are producing goods yourself or want to become an independent delivery courier contractor picking them up from a supplier’s warehouse.

There are several platforms and tools that will help you sort out the back-end process of your delivery services. 

If you operate a larger organization, streamlining the back-end process with tools is imperative. However, if you are a small delivery service business, you can easily organize your processes using internal processes or simpler tools like Excel.

Step 3: Figuring Out the Front-end Process for Your Delivery Service

Why is the front-end process so important for a last-mile delivery business?

The front-end process needs to be stressed upon because it is the process often visible and carried out in front of the customers. This includes fixing the food delivery route optimization.

The way your front-end process flows makes or breaks the impression you are already trying to establish as a brand and attract customers.

1. Understanding the needs of the front-end process and how it relates to your business

The front-end process often has different requirements when compared to the back-end process. 

The front-end process requires greater optimization. It is the step involving the last leg of the delivery process so it needs to be quick and efficient.

2. Your niche decides how you design your front-end delivery process

While most businesses carry out their front-end processes in a similar fashion, there can be stark differences depending on the niche. 

For example, the process carried out by a grocery delivery business and a courier service will differ quite a bit. It is often about the urgency and the perishable quality of the commodity in transit.

Grocery delivery often has same-day deliveries, which is not the case with courier delivery.

Both processes mentioned above slightly differ from each other. While the grocery delivery process is simpler and more direct, the courier delivery process involves more parties and takes some time to complete.

Step 4: Hiring & Training Your Drivers

1. Hiring drivers

In order to hire independent contractors or delivery drivers, you can start posting job openings on websites like ZipRecruiter, Monster, & Indeed. 

Start by posting ads for contract delivery jobs on industry-specific job boards. You can also use your brand’s social media platforms to let a potential independent courier contractor or driver know about the open position.

You need to check whether:

• The contract delivery driver requires their own vehicle;
• Do they have a commercial driver’s license, driving skills, and experience?
• Do the candidates have a clean driving record?
• How long is the contract for?
• The number of stops or number of hours to work every day

It is not difficult to find contract delivery drivers. You will receive heaps of applications and have quite a lot of options to choose from. The difficult part will be the onboarding and training process.

2. Training contract drivers

Once you hire a set of delivery drivers for your company, you will be providing them with thorough training. The four major areas of the training are as follows:

• Last-mile Process: This part will teach the new hire to think and operate like a driver. You will be training them on how the process works and what their responsibilities will be.
• Customer Service: You will train your contract drivers to be customer-centric. The delivery driver must deliver the package the way your customer wants to receive it.
• Software & Tools: The drivers will be given access to and taught to use the software and tools they will use daily in their jobs. 
• Health & Safety: Train your drivers to prioritize themselves over the package. They must never put themselves in a risky situation and must be encouraged to take regular breaks without overworking.
• Maintaining Safety & Security: Even after the required training, you must give your drivers the right tools and guidance to help keep them safe and healthy while doing their jobs. Maintaining a protocol to continue doing certain things to stay aware, safe, and healthy on the job is also imperative.

Step 5: Using a Route Planning & Optimization Tool for Your Delivery Service Business

1. Empower Your Contract Drivers

1. Import Excel: With one of the simplest import features, bringing the addresses together and creating a route becomes effortless. Dispatchers and drivers can plan routes with anywhere up to 500 stops at once.

2. Add Notes & Details: Dispatchers can add specific delivery details for the drivers like service time, customer details, priorities, etc. These specific details prove to be really helpful for the drivers.

3. Adjust Schedules on the Fly: Alterations to the route? Need to change the driver? No problem. Dispatchers can easily make adjustments to the route while the delivery is in progress without having to compromise with the entire route.

4. Delivery Constraints: With specific delivery constraints like delivery time windows, driving preferences, urgency, and curbside delivery, the drivers know exactly what to do at each stop without having to waste their time.

5. Proof of Delivery: Drivers can capture proof of delivery through customer signatures, photo capture, or notes on their mobile phones. This enhances accountability and keeps dispatchers or managers informed about each delivery, thanks to effective proof of delivery software.

6. Reports & Analytics: End-of-day reports for all drivers and deliveries help the dispatchers and managers be in the loop. It helps drivers be more accountable for each delivery. Drivers can see their reports and know where they need to step up. 

Accomplish More With the Tool While Delivering More Orders

A route optimization software like Upper helps your contract drivers achieve more, let’s see how:

• Reduced Planning Time: This route planner’s route optimization helps you cut down the planning time for creating and optimizing local delivery routes. It helps drivers and dispatchers cut down up to 95% of the planning time.
• Optimize Multiple Routes at Once: Creating and optimizing multiple routes for multiple drivers at the same time will become a breeze. A route planner divides the routes among your multiple drivers depending on the details and specifications you mention.
• Cover-More Stops on the Same Route: Drivers will easily cover more stops on a single route when the routes are properly optimized. Correctly optimized routes create space and time for more deliveries.  
• Reducing Cost-per-delivery: Optimized routes help drivers reach their destinations in time without having to go around, covering extra miles. It helps them save time and money. With optimized routes, drivers and delivery companies can save cost-per-delivery. 
• Improving Profitability: A route planner helps businesses accommodate more delivery services without having to hire more drivers by empowering the ones who are already working. So, an advanced route planner not only saves costs but also improves profitability.

Professional Drivers + Optimal Routes = Key to Your Delivery Business Success

Customers today are looking for commodities and services to be delivered right to their doorstep, so now is the best time to consider venturing into a delivery business. After you decide your niche and determine what you will deliver, you will set up a last-mile delivery procedure. 

This is one crucial factor that can help you scale your delivery business while ensuring profitability. Therefore, it is imperative to pick an ideal last-mile delivery route planning software solution to simplify your last-mile delivery operations, including scheduling, optimization, and dispatching.