June 7, 2023

Reducing Cost Per Delivery: and Interview with FarEye


cost per deliveryA few weeks ago, I had the opportunity to speak with Kushal Nahata, Co-Founder and CEO at FarEye. In this conversation, Kushal and I talked about the complexities of last mile delivery.

I asked Kushal to give some deeper insights on a few key points. First, what are some things companies can do to reduce delivery costs and how does technology play a role?  Second, how can retailers use technology to enhance the customer experience? Third, how can both retailers and logistics providers better cooperate to provide enhanced service and reduced costs? Fourth, at what point should retailers that outsource their deliveries consider managing their own fleet or delivery network? And finally, how can retailers and logistics providers accurately capture data and act upon the insights they generate?

Here are the key points from our discussion. You can watch the full interview below.

Reducing Cost per Delivery

Reducing cost per delivery is a critical KPI for companies. Most companies are going through cost pressures, and technology can play a big role in how a company reduces these costs. Kushal pointed out that there are two components to cost reduction.

The first part is knowing what is the existing cost per delivery, and what is break-up of that cost. Companies need to look to leverage machine learning and reporting as part of the process of understanding cost per delivery. Different regions, hubs, and branches have different starting points. Once you know where your company stands on initial costs, you need to explore what is adding to costs, and what are the trends around last miles costs.

The second piece comes down to technology and leveraging capabilities like routing and carrier allocation. These use advanced algorithms on an intelligent platform to which help minimize distance, fuel consumption, and time spent on the road. This leads to reducing cost per delivery and improving efficiency.

Customer experience

When it comes to customer experience, the delivery experience is an extension of the brand. The biggest anxiety for consumers is knowing where an order is. Ensuring that you have real-time tracking and updates sent to customers is incredibly important.

Personalization is the next step. Most retailers focus on ensuring that there is a high amount of repeat buyers on their platform. Knowing what the preference is of your customers means you can personalize that experience, whether that is preferred delivery method, location, or custom marketing messages.

Another area of customer experience is returns. Research has shown that about 90 percent of online users want to know what the return policy is before they make a purchase, making a customer-centric return policy important. Returns, much like any stage of the customer lifecycle, relies on enhanced communications for providing real-time updates on anything that is happening with an order.

Better Cooperation for Better Service

How can retailers and logistics service providers better cooperate to increase service and reduce costs? Technology can play a big role. Many companies have employees continuing to do manual processes that could otherwise be automated. It starts with data sharing where companies have integrated platforms; retailers have visibility into shipments from the logistics service providers and can further enhance the experience by further integrating all trading partners on a single platform.

Data Capture

A key question is how do you capture data and act upon it? Knowing were you stand from a performance standpoint is reliant upon data collection. Retailers need to integrate with service provider systems to get the relevant data – NPS, shipment size, location, and on-time delivery – on a single platform, and then normalize the data and use it for more efficient deliveries.

Companies need to make the data predictive and prescriptive, which allows for actionable insights. You need to see the value when you are investing in a system, and insights need to be specific and digestible.

About FarEye

FarEye is a last-mile technology platform; geared towards transforming last mile deliveries for companies. FarEye’s AI-powered functionality optimizes end-to-end deliveries and provides recommendations driven by aggregation of insights. It empowers enterprises to gain real-time visibility, excel in the last mile, and deliver customer delight.


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