5 Key Metrics to Measure in Last-Mile Delivery

If you own a delivery company, you know the after-effects of Covid, right?

Globally, over 75% of companies admitted that the pandemic disrupted their supply chain

This depicts how easy it is to disrupt the entire supply chain process.

The situation created during the pandemic was indeed problematic, but not all companies vanished during this phase of struggle.

Some last-mile logistics survived this situation pretty well.

They worked on the core of their business and paid undivided attention to the important metrics, considering the KPIs.

What is the important last mile delivery metrics?

What purpose does the KPIs serve?

Let’s explore more about the last-mile delivery industry.

What is Last-Mile Delivery?

Last-mile delivery refers to delivering products from the nearest distribution hub to the required address, avoiding any time delays.

The term last-mile delivery is usually used for businesses that require instant delivery. Businesses such as food delivery businesses, enterprise supply chains, and those that promise one-day delivery need to be very particular about last-mile. 

Last-mile has recently gained popularity. It is predicted that by 2027, the global last-mile delivery market will grow to more than 200 billion US dollars from 108.1 billion US dollars in 2020. 

This indicates that the future of last-mile delivery logistics is very bright. 

But this also brings in the final mile challenges because proper workflow management is a must to maintain such a vast business. 

That’s the reason why a proper understanding of last-mile delivery metrics is important.

What are Last-Mile Delivery Metrics?

The parameters used to measure the progress and performance of a last-mile delivery logistics are known as last-mile delivery metrics. 

The collected data can plan strategies that contribute to business growth. 

These are the quantifiable data collected concerning the delivery operations to determine the KPIs or key performance indicators.

Need a Last Mile Delivery Solution?

Upper Route Planner has helped hundreds of business grow with its unbeatable route optimization algorithm. Try it now!

What are KPIs in Last-Mile Delivery?

KPIs stand for key performance indicators.

The delivery performance KPI is a metric used to determine the performance of the delivery business both qualitatively and quantitatively. 

The data collected can be implemented to make better decisions and determine how to achieve the business goal.

How to Choose the Right Metrics?

Many metrics can be measured, but only a few need to be measured. Your last-mile services can be enhanced by limited research as well. But the research must be focused and objectified. Consider a few pinters while selecting the required metrics to track the performance of your last-mile deliveries:

  • The metric must be focused on the team performance rather than an individual. 
  • It must track trends. 
  • It must drive improvement rather than drawbacks. 
  • The metric must point out questions rather than assumptions. 
  • Keep the simple and effective metrics as the target; too many metrics wouldn’t always serve the purpose.

Considering the parameters mentioned above, one can choose the right metrics to measure the performance of the business.

Which Last-Mile Delivery Metrics Must be Tracked?

Here are five main metrics that a logistics business can track to get accurate data to measure the performance of the business:

Customer satisfaction measurement metrics

Customer satisfaction stands on top of almost every business list. A buyer’s satisfaction levels define the efficiency of a logistics business. 

Customer satisfaction measurement metrics

A customer who is satisfied with how the package is received at the customer’s doorstep can be the reason for getting more leads.

Hence, this metric is very important to work upon.

The metrics to consider under customer satisfaction are:

1. Customers’ convenience tools

The tools used to enhance customer experience while taking your delivery services are known as the customers’ convenience tools. 

Most delivery companies believe in upgrading the traditional ways of treating customers and try to replace them with the latest and most convenient methods. 

Considering the demands of modern-day customers, a user-friendly interface is set between the customer and the logistics. 

This is done to make sure that there is clear communication between the customer and the delivery personnel. 

Real-time tracking of the parcel makes it easier for the customer to plan their schedule accordingly. 

This will lead to successful delivery operations.

Neither the customer will have to wait for a whole day, nor will the business face failed delivery penalties. 

This will increase brand loyalty.

2. Feedback consideration

Taking a customer’s feedback is the most valuable step that any logistics can consider. 

Customers’ feedback serve not only as a parameter to measure the success of the delivery service but also as a business enhancer. 

Feedback can be a word of appreciation for the service or a complaint regarding the same. 

The appreciation can be taken as motivation, and the complaint details can be studied to improve the service. 

Both serve as valuable insights for the business.

Service measurement metric

Service measurement metrics deal with analyzing the service quality of the business. 

Service measurement metric

It can be about the on-field experience or the online experience. 

It is an important metric because it is linked with customer experience.  

An important metric under service management is:

3. Time to respond and schedule

Time to respond and schedule is directly linked with the management. 

The time taken to respond to any query raised by the customer and the ability to re-schedule according to the situation are considered important metrics. 

Delivering faster services, responding actively, and providing instant solutions are the key factors that can be worked upon under this metric. 

Measuring your operational efficiency is yet another parameter to calculate your average delivery time, delivery efficiency, the ability to cater to last-mile deliveries, and much more. 

Hence, a lot can be done under this metric to find out more about the service provided by your last-mile delivery logistics.

Cost measurement metrics

This involves how much you spend and how much you gain. If you lose track of your company’s expenditure and profit, you will face issues. 

Cost measurement metrics

Cost measurement metrics make sure that you make the right decisions in the financial management of your company. 

Making on-time deliveries is a challenge in itself. 

Fuel prices, the time drivers spend on the road, vehicle costs, interval-based consumption costs, and final-mile delivery costs – these might seem like small expenditures to meet delivery demands. 

But they sum up to create a significant number. Last-mile logistics barely pay attention to tackling the costs involved in the delivery process. 

This ignorance is what troubles them further in surviving the rough phase. 

Hence, cost measurement metrics will help you track your money flow and provide accurate data to take further initiatives.

4. Cost per mile

The costs involved in traveling a certain distance to close delivery are cost per mile. Shipping and delivery businesses can be expensive, especially during last-mile deliveries. 

These costs cannot be eliminated, but one can take certain measures to reduce them. 

Measuring cost per mile provides you with valuable insights to calculate the operating costs of your business. 

While calculating cost per mile, it is important to consider both variable and fixed expenses. 

Fixed expenses include vehicle maintenance costs, driver’s salary, insurance, renewal charges, and tolls.

Variable expenses include fuel costs, vehicle breakdown repair costs, extra mile costs, and wages of employees working on an hourly basis.

Cost per mile metric can provide you with a near to accurate expenditure summary which can help you calculate:

  • Average service time and cost
  • Average delivery distance
  • Expected last-mile mileage
  • Fuel consumption
  • Vehicle cost
  • Profit margins

All these data can be collected during and after the calculation of cost per mile.

5. Delivery dashboard regulation

You can consider it the final and most effective metric to measure. A clear understanding and calculation of the pointers on a delivery dashboard can provide you with the most valuable insights. These insights cover all the major aspects of delivery on the dashboard.

Most of the last-mile obligations are met if data for the dashboard are analyzed and changes are implemented correctly.

A delivery dashboard includes:

  • Delivery schedules
  • Supply chain data
  • Pre-shipping documentation
  • Order accuracy

A delivery dashboard normally occurs as the first interface of the delivery management software. 

Last-mile logistics that use delivery management software to meet order fulfillment tend to have an advantage over the other logistics.   

Automation makes managing the key metrics easier as you get every required data on one screen with real-time updates. 

Here are some key benefits of using automation to find the key metrics:

  • Easy task scheduling and management
  • Real-time data optimization
  • Record of damage claims
  • Record of a total number of deliveries
  • Route optimization and planning
  • Planned mileage tracking
  • Capacity utilization
  • Average service time

Hence, considering the metrics mentioned above, a last-mile logistics can track the service performance and implement changes according to the need.

Automating the delivery process is an add-on to make tracking easier so that the key metrics can be traced easily. 

The advantage of getting real-time updates can ensure smooth workflow and initiate upgrades.

FAQs

KPIs, or key performance indicators, are the delivery metrics considered to calculate the performance of the last-mile logistics. Last-mile delivery KPIs are the key areas where tracking and improvement must be focused.

Last-mile delivery means delivering products from the nearest distribution hub to the required address, avoiding any time delay.
The term last-mile delivery is usually used for businesses that require instant delivery, such as food delivery businesses, enterprise supply chains, and businesses that promise one-day delivery.

Delivery operations can be effectively optimized by setting up goals for effective delivery and then finding methods to achieve them one by one. This could be through planning deliveries or optimizing routes.

Some important final-mile delivery metrics are:

  • Customer’s convenience tools
  • Feedback consideration
  • Service quality and scheduling
  • Cost per mile
  • Delivery dashboard regulation

Managing last-mile logistics through traditional methods may turn out to be non-profitable.
So it is important to switch to a good route planner app that performs all the basic functions for delivery companies.

Role of Upper Route Planner in Regulating Last-Mile Delivery Metrics

Upper Route Planner is the leading route planning and optimizing software. It is an all-in-one delivery management software that can meet business requirements regarding route planning, quick dispatch, and much more. 

Upper Route Planner is not just a cost-effective investment that a business can make to manage the logistics business effectively and simplify the delivery process. It is also known to boost operational efficiency and productivity. 

Calculating metrics shall be an easy task with Upper Route Planner as it comes with a user-friendly interface that makes the required data accessible.

To learn more about the software, its features, and benefits, to take your business to the next level.

Author Bio
Rakesh Patel
Rakesh Patel

Rakesh Patel is the founder and CEO of Upper Route Planner. A subject matter expert in building simple solutions for day-to-day problems, Rakesh has been involved in technology for 30+ years. Looking to help delivery businesses eliminate on-field delivery challenges, Rakesh started Upper Route Planner with the ultimate goal of simplistic operations in mind.

https://www.upperinc.com/blog/last-mile-delivery-metrics/