With rising fuel costs and increasing competition, it is increasingly important to focus on delivery operations. Understanding which model really suits your business is vital to staying on your feet. For this reason, we will delve into the subject so that you understand which model would suit you best and what they imply if you were to choose them.
Internal delivery fleets
Building your own in-house delivery fleet means sending orders to customers with the help of delivery drivers employed by you. It will sound like a simple thing to do, hire and go, but you may want to ask third parties for advice on logistics. This alternative has the advantage that it provides greater control over what the delivery people do. Resulting in the possibility of optimizing deliveries.
What to expect from in-house fleet delivery operations?
As you could already read, finding the right alternative requires studying because your results in the end depend on good delivery. Then we will explain the advantages and disadvantages so that you can make the most convenient decision for your company.
Operating expenses associated with internal fleets
Having your own delivery operations requires an investment, in addition to the maintenance costs per unit. Firstly, there is the most important thing, the salary of the delivery drivers, who deserve adequate payment. Whether they are in cars, bikes or motorcycles, they are the ones who take risks on the street. According to studies carried out by indeed.com, the average salary in the US is around $17/h.
Increases in fuel prices
Since 2021, the prices of the most common fuels have increased. It is a factor that you must take into account, especially if they deliver by motorcycle or car. Only those who maintain their own fleet should take care of these types of details.
Worker attrition rates
Maintaining a fleet is about always being sure that the requirements of each delivery are met. There are increasingly high desertion rates in other industries and thanks to E-commerce there is a great demand for delivery people. The consequence is that driver retention is an essential role in creating an internal fleet of delivery people.
Get on track in managing and perfecting deliveries
All of the above factors make optimization and delivery operations critical components. Since these will determine the success and profitability of the fleet in your charge. It is best to use delivery management platforms that establish systems that keep resources from being wasted.
The fluctuation of order volume
If you invest in your delivery fleet, it will become difficult to scale dramatically in short periods. Depending on the number of orders you have, adjustments will be made, although at first this is based on an estimate, it should be as accurate as possible. Drastic action will have to be taken if a miscalculation is made. For example, if there is a large gap between the volume of deliveries and the ability to fulfill them.
Hired delivery services
The second option to fulfill deliveries is subcontracting, paying for the logistics process of another organization. In logistics language it is called 3PL, they are responsible for managing and ensuring a good delivery service. This system can reduce certain details that caused stress for our own fleets. However, you also have to look at the elements before investing blindly.
3PL Delivery Services Efficiency
If your calculations show that there will be a considerable volume of deliveries, it is best to hire those who specialize in package trips. The positive thing is that as more and more people want their orders to reach them, there are many delivery companies. So you can consult until you find one that suits your brand and what you need, at the price you can afford.
Expenses required by the investment
The initial investment is important regardless of the operating model you choose. Although setting up your own delivery fleets can lead to higher long-term profit margins. As we already mentioned, a substantial capital expenditure is required to start it. Unlike third-party logistics, because it is usually a more accessible and faster alternative.
Distances to travel
Distances play a role when choosing, because your fleet might be better for short geographic ranges. Here the subcontracting of deliveries comes in to save the day, since they can be associated in each city or area. In fact, the costs become much more manageable, since you will be able to pay only when the services are required to be used.
Collection of useful data
Starting to work with third-party logistics requires providing basic information about customers to delivery people. Whether the business strategy you decided to take actually consists of keeping this confidential is also a factor to consider.
Is there a third option?
You will have already been able to analyze the pros and cons of own fleets and 3PL. On the other hand, we must tell you that today many companies make the decision for a mixed solution. So if both benefit you, you don't necessarily have to choose a third-party supplier or your own delivery service. For example, companies with distant branches prefer a mixed system to avoid higher expenses.
The decision is in your hands
At the end of all this, the priority is your business and the goals you have planned to move it forward. No matter what you choose when it comes to delivery operations, the goal should always be to optimize performance. So that you can guarantee a service with the highest quality possible, which is the most attractive for customers.