Mastering Shipping & Last-Mile Delivery: Strategies for the Modern Supply Chain

Thriving brands know that efficient shipping and last-mile delivery are critical to customer satisfaction and business success. Internally at iDrive, we often say that 50% of the customer experience happens after they hit the buy button.

As consumer expectations for rapid, reliable deliveries grow, companies must optimize their logistical operations to remain competitive.

This comprehensive guide highlights the key aspects of shipping and last-mile delivery, offering strategies to overcome common challenges and enhance your supply chain. Continue your learning by exploring our in-depth articles on each of the topics we touch on, like cost reduction, carrier optimization, warehouse placement, and more.

Shipping and last-mile considerations and advice for an optimized supply chain

1. Hone your last-mile delivery strategy

Last-mile delivery can account for over 50% of total shipping costs and presents numerous complexities, from urban congestion to inefficiencies in rural areas. These and other challenges can impede this often-scrutinized shipping stage. Brands can overcome these obstacles by adopting innovative, technology-driven solutions designed to enhance last-mile delivery.

Key considerations include:

• Navigating city traffic: Implement micro-fulfillment centers and utilize alternative delivery methods to alleviate delays due to congestion.
• Improving rural deliveries: Leveraging data analytics to optimize delivery routes and schedules boosts efficiency in remote areas.
• Accommodating customer desires: Offer real-time tracking and flexible delivery options to enhance customer satisfaction.

By embracing technological advancements and strategic planning, businesses can avoid last-mile delivery challenges and ensure timely, cost-effective shipments. Our article below delves deeper into the common pain points of last-mile logistics and highlights practical solutions, including automation, crowdsourced delivery, and micro-fulfillment strategies.

Read more: Overcoming Last-Mile Delivery Challenges: Tech-Driven Solutions for 2025 and Beyond

2. Invest in route optimization for faster deliveries

Traffic loses the freight industry an estimated $74.1 billion every year. Congestion also lengthens delivery times, which, in turn, increases the risk of drivers hitting unpredictable road hazards and weakens your fulfillment reliability. Optimizing delivery routes is therefore essential to reduce transit times, lower fuel costs, and increase customer satisfaction. With advanced route planning tools, businesses can navigate traffic patterns, delivery windows, and resource constraints effectively.

Some top benefits of this technology are:

• AI-powered routing: AI adapts to real-time conditions for dynamic routing, which strengthens delivery efficiency.
• Fuel cost reduction: Optimized routes minimize unnecessary mileage, leading to significant fuel savings.
• More satisfied customers: Accurate ETAs and timely deliveries improve the overall customer experience.

Implementing route optimization strategies is imperative for businesses aiming to boost delivery performance and cut operational costs. Discover how advanced analytics and real-time data are revolutionizing route planning and execution in our article below.

Read more: How Route Optimization is Redefining Last-Mile Efficiency

3. Trim shipping costs

Shipping expenses can easily erode profit margins if poorly managed. Components include package weight and dimensions, shipping speed, distance, and volume, carrier fees, as well as hidden expenses like accessorial fees and insurance. Depending on the industry, these expenses consume about 3%-13% of an eCommerce brand’s total revenue, so any error or excess can significantly eat into your profit margins. With that in mind, here are seven actionable strategies to reduce shipping expenses while maintaining high service standards:

1. Optimize packaging: Reducing package dimensions and weight lowers shipping rates.
2. Implement multi-carrier strategies: Comparing rates across multiple carriers supports cost-effective choices.
3. Adopt zone skipping: Consolidating shipments to bypass certain shipping zones cuts expenses.
4. Leverage data analytics: Monitoring shipping data identifies areas for cost improvement.
5. Negotiate rates: Establishing contracts with carriers can secure better pricing.
6. Integrate technology: Shipping software streamlines processes and uncovers savings opportunities.
7. Outsource logistics: Partnering with third-party logistics providers can offer economies of scale.

Discover more about these practical strategies to minimize expenses without compromising service quality in our article below.

Read more: Rate Shopping: How to Balance Cost and Quality in Your Shipping Decisions

4. Be picky about which carriers you use

With carrier rates on the rise, choosing the right carriers and negotiating favorable rates are critical components of an efficient supply chain. For example, we’ve found that depending on service level and location, some carriers have vastly different time in transit averages. As you research, keep in mind the following factors:

• Performance evaluation: Assess carriers based on their historical delivery times, reliability, and customer service. Besides browsing their websites, read client reviews and dig into their success history as well.
• Market analysis: Understanding market rates and trends aids negotiation.
• Contract flexibility: Include clauses for volume discounts and service-level agreements to support adaptability.
• Technology stack: What software does the service use? Analyze aspects like their freight procurement to assist your decision-making.

Smart carrier selection and rate negotiation can greatly refine your shipping operations and help control costs.

Our guide below provides insights into benchmarking, multi-carrier strategies, and negotiation tactics to secure the best shipping contracts.

Read more: Carrier Selection & Rate Negotiation: A Tactical Guide for Supply Chain Leaders

5. Refine your carrier relationships

A well-oiled carrier network is vital for maintaining service excellence and operational efficiency in a dynamic shipping environment. However, optimizing it involves more than cost considerations; businesses must also balance capacity, service quality, and scalability. With that in mind, be sure to review your:

• Carrier portfolio: Engage multiple carriers to mitigate risk and enhances flexibility. Even if issues arise with one shipping partner, the others can pick up the slack for uninterrupted business operations.
• Performance metrics: Regularly review carrier KPIs to verify service standards are met. Monitor metrics like on-time performance (OTP), order accuracy, and average time to load.
• Scalability planning: Prepare for peak seasons with scalable carrier solutions to prevent disruptions. Can they quickly accommodate sudden spikes? Are their seasonal rates reasonable?
• Technological integrations: Employ logistics platforms to streamline carrier management and performance tracking.

Explore methods to evaluate carrier KPIs, diversify risk, and ensure scalability during peak periods in our article below.

Read more: Carrier Optimization: Maximizing Efficiency Through Strategic Parcel Management

6. Review warehouse locations

Warehouse placement significantly impacts delivery time and shipping costs. That’s why it’s important to determine the optimal locations for your business to enhance your supply chain. Maintaining space near key markets shrinks delivery times (and thus transportation costs), can support expansion into new areas, and fosters seamless packaging operations, which also improves accuracy. For brands that ship temperature-controlled goods, hub selection is critical to maintain the integrity of their items throughout fulfillment.

Storage placement also affects a business’s ability to meet sudden demand spikes, which can lead to major consequences: If shoppers are unable to purchase an item online due to it being out of stock, a whopping 69% of them will buy from a competitor that does have it.

Consider:

• Customer proximity: Renting warehouses near key customer bases reduces transit times.
• Transportation infrastructure: Access to major highways and ports facilitates efficient distribution.
• Data-driven decisions: Analyze order patterns and shipping data to pinpoint the best locations.
• Scalability: Select sites with room for expansion to accommodate future growth.

By carefully selecting warehouse locations based on data and their unique considerations, brands can improve shipping performance and cut operational expenses.

Learn how to capitalize on data analytics to determine the most effective locations for your fulfillment centers in our article below.

Read more: Finding the Best Warehouse Locations to Improve Shipping Speed and Reduce Costs

Focus on your last-mile shipping for a robust supply chain from start to finish

Last-mile delivery carries your products over the finish line and turns an anxious buyer into a happy and loyal customer. By paying attention to your shipping speed, carrier selection, and warehouse locations, you can ensure products reach your customers quickly and efficiently, bolstering both your brand perception and bottom line.

Ready to streamline your shipping and last-mile delivery strategy?

iDrive Logistics offers the expertise and tools to transform your supply chain. Talk to a logistics expert today.