Last-mile delivery—the final stretch between your warehouse and a customer’s doorstep—is often the most expensive and inefficient leg of the shipping process. For businesses navigating high-volume e-commerce or regional deliveries, these costs can quietly chip away at your margins. Fortunately, with the right mix of route planning, carrier strategies, and creative cost-saving methods, you can streamline this final leg without sacrificing speed or reliability.
Understand Where Last-Mile Costs Come From
The last mile can account for over 50% of total shipping costs. These expenses typically stem from fuel, driver wages, multiple delivery stops, traffic delays, and failed delivery attempts. Even packaging waste and returns contribute to inefficiencies. The more urban or remote the route, the more fragmented and costly the last mile becomes.
Use Local and Regional Carriers Strategically
National carriers like UPS, FedEx, and USPS offer reliability, but regional carriers can provide faster and cheaper service for certain zip codes. Services like LaserShip or OnTrac specialize in next-day deliveries and can offer lower rates for localized routes. Hybrid models, such as FedEx SmartPost (now Ground Economy), combine major carrier networks with local delivery for cost-efficiency.
Consolidate Orders and Rethink Your Packaging
Encouraging customers to bundle items into fewer shipments reduces both packaging material and trips. Switching to right-sized packaging also helps you avoid dimensional weight surcharges. Consider using automated packing machines or eco-friendly alternatives that minimize waste while saving money on shipping.
Reroute for Efficiency Using Technology
Fleet management tools like Routific, Circuit, or Onfleet allow businesses to optimize routes for traffic, proximity, and delivery windows. AI-driven software can significantly reduce mileage and idle time, cutting fuel costs and increasing daily delivery capacity.
Offer Alternative Delivery Locations
Giving customers the option to pick up at lockers, retail locations, or package hubs lowers the risk of missed deliveries and additional trips. Platforms like UPS Access Point or FedEx Hold at Location reduce the need for reattempts and ensure timely receipt.
Use Gift Card Cashback to Offset Fuel and Delivery Costs
If you’re paying for fuel or third-party delivery services, there’s an opportunity to earn some of that money back. You can earn cashback with a Shell virtual card or get rewards with a BP virtual card through platforms like Fluz. For businesses managing their own fleets, this adds up quickly—especially when combined with loyalty programs from fuel providers.
Additionally, if you purchase shipping supplies from vendors like Office Depot, consider using gift cards that reward you instantly at checkout. Every bit of cashback earned here can go back into offsetting your overall delivery spend.
Final Thoughts
The last mile doesn’t have to be your profit killer. By optimizing routes, embracing hybrid carriers, consolidating orders, and using cashback strategies to soften costs, you can turn a major pain point into a strategic advantage. It’s not about cutting corners—it’s about making smarter ones.
