In last-mile delivery, businesses may use either specialized logistics companies or common carriers such as FedEx or UPS. However, it’s important to first understand what we mean by “last-mile delivery.”
This stretch of the delivery process involves transporting packages from the final point of contact along the supply chain to the front door of the receiving customer. Any point that counts as the last between the company and recipient is considered last mile (also known as final mile delivery).
The following guide will explore these options and the advantages and disadvantages of both.
What Is Local Delivery in DTC?
For last-mile delivery in the direct-to-consumer (DTC) environment, many businesses in the food industry are likely to use local delivery vs. common carriers. Local delivery may consist of either a third-party or company operations.
Local delivery for DTC companies differs from services like Uber Eats, Grubhub, and DoorDash, which are limited to delivering to customers within a service area closer to local restaurants.
With local DTC delivery, delivery dates are generally fixed as opposed to ordering on-demand. The delivery distance is also potentially much longer, with DTC deliveries taking place anywhere from two to 60 miles between the recipient and the third-party logistics company or kitchen.
Other elements that make local DTC delivery different from on-demand delivery include:
- Drivers may use either a company vehicle or their own.
- Routes are far more varied as drivers may travel through one or multiple towns, with stops alternating with every trip.
- Delivery companies may serve a single client, or they may serve several.
- Delivery drivers may collect reusable shipping supplies along their route
- Logistics companies may track deliveries using devices that drivers use to record all transactions.
- Delivery companies charge based on packaging specifications.
If a food company only delivers to a small radius near its kitchens, it would likely use local delivery, with those going beyond local service areas often relying on common carriers like UPS and FedEx.
Local Delivery vs. Common Carriers: A Comparison
If you’re not sure whether to go with local delivery or common carriers, the following are some pros and cons of using local delivery over common carriers:
Local delivery tends to be less expensive than going through common carriers, particularly when the food company handles its own deliveries and can make many deliveries in a short period of time. The important factor here is volume—it’s far cheaper to send a single driver to make many deliveries at a time than it is for them to handle only a few.
Retrievable Shipping Supplies
With local delivery, drivers can also get ahold of reusable shipping supplies, including insulated bags. These items offer more use over one-time-use supplies such as liners and boxes, helping you further save money.
Faster Deliveries and Fresher Food
Local delivery tends to take less time, with better overall timing that keeps food shipments fresher. For instance, a delivery might start with a pickup at 7 in the evening and deliver by 2 AM the next day. Meanwhile, common carriers like FedEx may take as long as 26 to 32 hours to deliver packages, often delivering packages in the mid-afternoon and letting the package sit in the daylight throughout the day.
Lack of Support
One disadvantage of local delivery is the lack of support that you would find with common carriers. UPS, FedEx, and other common carriers tend to have systems in place in anticipation of any issues, mitigating delays.
Another potential issue that you might have with local delivery is one of blame. If there’s a problem with deliveries involving common carriers, customers are more likely to direct their blame toward those carriers. Conversely, if there’s an issue with local delivery directly from the food company, they’re going to blame that company. This could tarnish the company’s reputation.
With common carriers, business owners can rest easier once they’ve handed their shipments off to the carrier. While there’s always the risk of issues, they fall on the carrier to correct them and set things right. However, with local delivery, you would have more control over shipments which could leave you more restless and on the lookout for potential problems.
You must also keep in mind that local delivery comes with more steps to consider compared to working with common carriers. You will need to recruit drivers, ensure that your drivers have valid licenses, including commercial driver’s licenses (CDLs), and keep up with both company and personal insurance. You will also need to manage and maintain fleets if using company vehicles and cover the high fixed costs that come with in-house delivery services.
Choose a Model That’s Right for You
There are upsides and downsides to using both local DTC delivery and common carriers for last-mile delivery. With the right business model and setup, you can develop a local delivery service or relationship with common carriers that enables your company to flourish.
For more information and guidance on how to build your business, get in touch with the experts at Gray Growth Logistics today.