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How do you measure and improve the performance of your last mile delivery partners?

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Last mile delivery is the final and most critical stage of the e-commerce supply chain. It involves delivering the goods from a local hub or warehouse to the customer's doorstep or preferred location. The quality and efficiency of your last mile delivery partners can make or break your customer satisfaction and loyalty, as well as your operational costs and profitability. In this article, you will learn how to measure and improve the performance of your last mile delivery partners using some key metrics and best practices.

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Nolan Bellot

Logistics and Supply Chain Enthusiast
Garry Sands

Business Development & Strategy Leader | 15+ Years Driving Growth in Big Tech, Gaming and Operations

1 Delivery time

Delivery time is the most obvious and important metric to track for your last mile delivery partners. It measures how long it takes for the goods to reach the customer from the time they are dispatched from the hub or warehouse. Delivery time affects customer expectations, satisfaction, and retention, as well as your inventory management and cash flow. To improve delivery time, you should monitor and optimize your route planning, vehicle allocation, driver performance, and traffic conditions. You should also communicate clearly and proactively with your customers about the estimated and actual delivery time, and offer them options to track, reschedule, or cancel their orders.

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Garry Sands

Business Development & Strategy Leader | 15+ Years Driving Growth in Big Tech, Gaming and Operations
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One way to measure and improve last mile delivery partner performance is by tracking delivery times and customer feedback. Providing training and incentives for on-time deliveries and excellent customer service can improve performance. However, some may disagree with the use of incentives, as it may lead to rushed or careless deliveries. For example, Amazon uses a rating system to measure performance and offers bonuses for high-rated drivers, but some drivers have criticized the system for being unfair and placing too much pressure on them to perform.

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Nolan Bellot

Logistics and Supply Chain Enthusiast
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Ever ordered something online and waited with bated breath? That final stretch – the last mile – can make or break the whole experience. Let's ditch those boring "how-to" lists and think like customers. Quick deliveries are great, but reliability and open communication are what make deliveries feel truly seamless. Tech Tools: Route planning software, it's about predicting traffic jams and delays before they happen. Customer Connection: "Your package is on its way" is good. "Arriving between 2-3 PM!" is even better. My Experience: I used to handle logistics – trust me, those delivery updates and proactive communication weren't just good customer service; they saved us tons of time on redelivery headaches.

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2 Delivery accuracy

Delivery accuracy is another crucial metric to measure for your last mile delivery partners. It measures how well they deliver the right goods to the right customer at the right place and time. Delivery accuracy affects customer trust, satisfaction, and loyalty, as well as your reputation and brand image. To improve delivery accuracy, you should ensure that your order fulfillment and verification processes are accurate and reliable, and that your delivery partners have the necessary tools and training to scan, check, and confirm the orders before and after delivery. You should also provide your customers with clear and accurate information about the product specifications, delivery address, and contact details, and offer them options to verify, modify, or return their orders.

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Nolan Bellot

Logistics and Supply Chain Enthusiast
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Hey, have you ever gotten the wrong takeout order? Super frustrating, right? Imagine that happening to your customers! Delivery accuracy is like getting your dance moves just right—it's all about precision! In my experience, messed-up deliveries can put a major dent in your business's reputation. So, how do we fix it? Here's the deal: It starts with you: Double-check those order details. Train your delivery crew: They're your frontline! Teach them to verify orders like a pro. Tech is your friend: Use those order tracking systems, they're lifesavers. Give customers control: Options to change orders keep everyone happy. I've found helpful by taking the time to set up clear processes from the get-go makes a world of difference.

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Garry Sands

Business Development & Strategy Leader | 15+ Years Driving Growth in Big Tech, Gaming and Operations
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To measure and improve the performance of last mile delivery partners, you can track delivery accuracy metrics such as on-time delivery rate, order completeness, and delivery condition. In my experience, one helpful practice is to establish clear delivery standards and provide regular feedback to partners. However, some people disagree on the best approach to measuring and improving last mile delivery performance. Addressing partners around delivery failures can create a punitive atmosphere that may harm long-term relationships. I would advocate for a more collaborative approach that emphasizes training and support to help partners improve their performance over time.

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3 Delivery cost

Delivery cost is a key metric to measure for your last mile delivery partners. It measures how much it costs you to deliver the goods to the customer, including the fuel, labor, vehicle, and maintenance expenses. Delivery cost affects your operational efficiency, profitability, and competitiveness, as well as your pricing and marketing strategies. To improve delivery cost, you should analyze and optimize your delivery network, vehicle utilization, driver productivity, and fuel consumption. You should also negotiate and review your contracts and rates with your delivery partners regularly, and explore alternative delivery modes or channels, such as drones, robots, or lockers.

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Garry Sands

Business Development & Strategy Leader | 15+ Years Driving Growth in Big Tech, Gaming and Operations
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In analysing delivery costs, we can consider key metrics such as delivery time, delivery success rate, customer satisfaction, and delivery cost per package. A major component in improving delivery cost is to optimize delivery routes and increase delivery density. Tech leaders recently advocated to pause advancement around AI which could potentially impact the use of technology like drones or autonomous vehicles to reduce delivery costs. For example, some may argue that such technology poses a safety risk and may lead to job loss for delivery personnel. Whilst I agree with some of these perspectives, it is likely a cost effective model will emerge once certain criteria is met.

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4 Delivery feedback

Delivery feedback is a valuable metric to measure for your last mile delivery partners. It measures how satisfied and loyal your customers are with your delivery service, based on their ratings, reviews, comments, complaints, or referrals. Delivery feedback affects your customer retention, advocacy, and word-of-mouth, as well as your service quality and improvement. To improve delivery feedback, you should collect and analyze your customer feedback regularly, and use it to identify and address the gaps and issues in your delivery service. You should also respond and follow up with your customers promptly and professionally, and reward them for their feedback and loyalty.

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5 Delivery sustainability

Delivery sustainability is an emerging metric to measure for your last mile delivery partners. It measures how environmentally friendly and socially responsible your delivery service is, based on the carbon footprint, emissions, waste, and impact of your delivery operations. Delivery sustainability affects your corporate social responsibility, customer preference, and regulatory compliance, as well as your innovation and differentiation. To improve delivery sustainability, you should adopt and promote green and ethical practices in your delivery service, such as using electric or hybrid vehicles, reducing packaging materials, recycling or reusing waste, and supporting local communities or causes.

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6 Delivery innovation

Delivery innovation is a future-oriented metric to measure for your last mile delivery partners. It measures how agile and adaptable your delivery service is, based on the adoption and integration of new technologies, trends, and opportunities in the delivery market. Delivery innovation affects your competitive advantage, customer satisfaction, and growth potential, as well as your risk management and contingency planning. To improve delivery innovation, you should monitor and evaluate the emerging and disruptive technologies, trends, and opportunities in the delivery market, such as artificial intelligence, blockchain, or 5G. You should also experiment and collaborate with your delivery partners and customers to test and implement new delivery solutions, such as voice or facial recognition, smart contracts, or gamification.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you measure and improve the performance of your last mile delivery partners?

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1 Delivery time

2 Delivery accuracy

3 Delivery cost

4 Delivery feedback

5 Delivery sustainability

6 Delivery innovation

7 Here’s what else to consider

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