Many SMEs rely on delivery transport, but it’s an area which can bleed costs and devour profit margins. Avoid these seven deadly sins to keep your costs from blowing out.
The last thing any business wants is a reputation for late or misplaced deliveries, as customers can easily find another supplier who can do it better.
Most transport delivery problems share common traits. After 30 years in the industry, I believe these are the seven deadly delivery transport sins:
1. Not knowing the full costs
Running an inefficient operation gradually erodes your profitability. I’ve seen many businesses work hard yet just scrape by, as they don’t understand their delivery costs.
Performing your own deliveries with capital equipment and personnel costs can be difficult to measure as there are so many variables. But by being smart about it and using technology, you can unearth the costs involved, and make changes to keep costs down.
2. No reliable backups available
Being unable to quickly, professionally replace absentees is one of the costliest mistakes made by delivery fleets. The effect is profound because it either results in goods delivered late, or not at all.
We’ve known business owners who often filled in at short notice and did the deliveries, and it drove them up the wall – before they saw the light and engaged the right outsourcing arrangement.
Having a flexible arrangement where absences can be covered quickly is the professional response.
3. Using incorrect labels
When outsourcing your deliveries, attention to detail increases the chances of successful delivery.
Any packages must have a clearly defined label with the address, otherwise it may be lost or misdirected. A common problem is reusing a parcel which has an out-of-date address still showing.
There’s nothing wrong with reusing a parcel provided it’s still in good shape, but you must ensure there is only one label showing.
4. Using incorrect packaging
Packaging must be sturdy enough to be handled multiple times, through many hands and via automated conveyors.
The correct size of packaging is important – a carton that’s too big can be as troublesome as one that’s too small. Incorrect packaging is the major contributor to damaged goods.
Anything remotely fragile must be protected and properly wrapped, as broken goods at point of delivery will cost you.
5. Being unable to inform customers of a delivery’s progress
There is no longer any excuse for not informing customers of their deliveries. Even SMEs can now access smartphone-based telematics systems cheaply, keeping customers up to speed.
Informing customers is no longer a value-add, it is now a basic expectation.
6. No proof of delivery
Proof-of-delivery protects businesses from claims that a delivery didn’t show up, or that the wrong parcel was delivered.
Previously, it was much harder to prove otherwise against such claims, but thankfully proof-of-delivery has never been easier, cheaper, or more widely available than now. Using a simple telematics system provides instant proof.
Access to proof-of-delivery also assists in accounts receivable when a customer is delaying or avoiding paying for goods.
7. Going the long way
Fleets can easily double-up on delivery runs or accidentally take a longer route, making them less efficient, which increases the cost-per-delivery.
The answer is frequently analysing delivery driver routes with fleet tracking software. Being efficient in deliveries requires focus, but it is possible to save time and money on your deliveries by monitoring these things.
Too often a driver will be taking twice as long to deliver a parcel as necessary, but this won’t show up unless you make the effort to use telematics and analyse your fleet’s performance.
These systems are now much more affordable – what once required a large initial investment in the thousands is now accessible via Android smartphone, which starts at around $100.
Walter Scremin is general manager of national delivery transport firm, Ontime Delivery Solutions.
Employer obligations for work travel explained
By Nathan Luke
Too many SMEs are making this mistake
By Adam Joy
Taking digitisation out of the ‘too hard’ basket for SMEs
By Jason Brouwers