The Hidden Costs of In-House Delivery Operations In The DMV

Key takeaways

• Driver recruitment and retention are expensive.?According to a recent study by B2B Reviews, the average cost per hire is nearly $4,700.
• Hidden costs significantly contribute to the overall cost of managing an in-house delivery fleet. These costs can include fuel, maintenance, insurance, and vehicle taxes. For example, the average car premium in the DMV is $2,400 a year, and the average gas price is $3.31.
• Managing a fleet can be time-consuming and distracting. Businesses may spend significant time on tasks such as driver recruitment, training, and route management, which can take away from their core operations.

Operating a delivery fleet isn't just about vehicles; it's about the people behind the wheel. Finding and retaining qualified drivers can be a major challenge, both in terms of time and money. From recruitment and training costs to ongoing expenses like fuel, insurance, and vehicle maintenance, the hidden costs of managing a delivery fleet can add up quickly.

In this blog post, we'll delve into the hidden costs of in-house delivery operations and demonstrate how partnering with a dedicated delivery provider can free up your time and resources so you can focus on what you do best.

The High Cost of Hiring and Keeping Drivers

One of the biggest challenges of running your delivery fleet is finding and keeping qualified drivers. The Bureau of Labor Statistics reports that the median annual wage for couriers and messengers in the Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area is $43,670. That's a significant expense, and it doesn't even factor in the cost of recruiting, onboarding, and training new drivers.

According to a recent study by B2B Reviews , the average cost per hire is nearly $4,700. And that's just the beginning. Businesses can expect to spend an additional 3 to 4 times an employee's salary on benefits, payroll taxes, and other overhead costs.

Beyond the Wheel: Hidden Costs of In-House Delivery

The cost of managing a delivery fleet goes far beyond just driver wages. Here are a few other hidden costs to consider:

• Fuel: Today's average gas price in the DMV is $3.31, and the average car MPG is 24.40. If one driver drives an average of 500 miles per week, that is an additional $275 per month in costs. In the same scenario, with MPG adjusted, fuel for one van would cost $390 per month. If you have a team of three van drivers, that's over $14,000 a year in fuel alone!
• Vehicle maintenance and repairs: Keeping your fleet of vehicles on the road can be expensive . You'll need to factor in the cost of routine maintenance and unexpected repairs. The chart below visualizes the cost of vehicle parts over the past ten years.
• Insurance: Commercial auto insurance is essential for any business that operates a delivery fleet. The cost of insurance can vary depending on the size and type of your fleet, as well as your driving record. The average car premium in the DMV is $2,400 a year.
• Vehicle Registration and Taxes: Virginia has the highest vehicle property tax in the country at an average of over $1,000 for a $26K car! Maryland and D.C. do not have this tax. However, they all do have DMV fees to register your vehicles, which can range from $30.75 to $44.75. In Virginia, vehicle tax is 4.15%, 6% in Maryland, and depending on fuel economy, tax in D.C. can be 4.4%.
• Vehicle Lease or Loan: According to Bankrate , as of September 2024, the average car payment is $730 for a new vehicle and $520 for a used vehicle.
• Tolls: Once again, Virginia takes the lead! Unfortunately, Virginia leads the US with the highest toll costs , nearly doubling the runner-up's fee, at $3.27 per mile. Maryland averages $0.24 per mile.

Considering The Intangible Costs

We've seen firsthand how the burden of driver recruitment, training, and oversight can drain resources and distract from your core operations. Industry experts are juggling delivery responsibilities instead of focusing on patients or clients.

The endless cycle of interviews, training, and route management can be exhausting. You decide the value tied to these hidden costs. Could you put your time somewhere else?

Here to Compare Not Scare

Although you're feeling the lack of time to devote to research and vetting a new partner, it may be time to consider a more efficient solution to replace or complement your current one. This quick breakdown was not intended to frighten you but to show that there are costs that are not at the forefront when considering the true cost of managing a fleet of drivers and vehicles. Labor alone is an exorbitant cost.

The?employment trend of couriers and messengers ?has doubled in growth in the last decade, which is promising for the industry. The average courier turnover is still over 50%, which means a lot of time is spent recruiting, hiring, and retaining reliable drivers.

Finding a solution that works best for you and your company's goal is the primary concern. Whether that's maintaining an internal fleet, outsourcing the department, or a hybrid of both. There are options if you're feeling weighed down by the nuance of logistics.

We hear that saving money is often cited as a reason for not switching to a different fleet management solution. However, the costs associated with managing a fleet can be significant, from major expenses like fuel and insurance to smaller costs like vehicle maintenance and driver turnover. While it might seem like a hassle to research and vet new options, switching to a more efficient solution could actually save you money in the long run.

Win Back Your Time, Energy, and Focus With Excel Courier

You can eliminate all of these hidden costs with Excel Courier's flat-rate pricing model for?dedicated delivery services . We provide drivers and vehicles for your private use so that you have the same drivers. They will feel like a part of your team, and you will have a sense of control, all while watching the bottom line. Our team of over 250 experienced, qualified drivers are familiar with the region and navigate it effortlessly, combined with the assistance of our 24/7/365 dispatch team.

A great team of drivers starts inside the four walls. Excel Courier's driver management team is dedicated to recruiting, training, and retaining each driver to ensure they have the vital skills to be successful on the road. When matching a driver to each dedicated delivery services account, we consider their experience, credentials, vehicle, and other qualifications to ensure they are the perfect fit for you.

Success continues in our operations with dedicated Client Account Managers committed to monitoring and being proactive about your account's performance. We prioritize communication because we understand that it builds trust, and we value it greatly. It is crucial for us to keep an eye on your deliveries both inside and on the road.

Since 1986, we have served the Mid-Atlantic region with locations in Northern Virginia, Richmond, Virginia, and Beltsville, Maryland. Our unmatched experience in handling critical, time-sensitive materials for hospitals, laboratories, distributors, data centers, logistics, and aviation sets us apart.

Contact Excel Courier today for a free consultation and start focusing on what you do best.