The Crux of Efficiency in Last-Mile Delivery: What Makes the Difference?

5. March 2024

Stop density is a crucial factor in delivery efficiency, yet it is just one piece of the puzzle in the intricate realm of last-mile logistics. Efficiency essentially revolves around stop density, service time, and drop factor. But what exactly do these terms entail?
Stop density, service time, and drop factor
Stop density refers to the number of delivery stops per unit area. It determines whether long distances need to be covered between deliveries or if the next destination is merely the next house, which, of course, saves time. In package delivery, numerous stops are typically made consecutively after departing from the depot. Incorporating stops for returns or package collections directly into the route is known as the milk run principle. Conversely, in the food and quick commerce sector, it often entails returning to a pick-up point at a restaurant after just 1 or 2 deliveries or, in some cases, making a lengthy journey back to the warehouse.
As soon as a delivery stop is reached, the service time begins. A Wolt bike courier secures his bike, locates the building entrance and the correct doorbell, ascends to the relevant floor, rings the doorbell, and completes the delivery. The shorter this process, the quicker the driver can proceed with their route. In the package sector, continuous efforts are made to reduce service times by experimenting with various methods. For instance, vehicles with right-hand drive can shorten routes, although they necessitate the purchase and utilization of specialized vehicles. Amazon utilizes parcel bags to expedite the identification of the next shipment during deliveries. Additionally, three-word addresses from what3words can pinpoint building entrances precisely, thus saving time on search efforts. Recipient notifications and live tracking further enhance the likelihood of successfully meeting someone at the delivery location.
Drop factor plays a major role in efficiency
Let's discuss the drop factor. This metric indicates the number of shipments delivered simultaneously during a single delivery stop. Typically, for deliveries to individual customers, this number remains close to 1, even for larger delivery firms. However, the scenario changes for business customers or deliveries to consolidation points like package shops or parcel lockers, where considerably higher drop factors are achievable.
A high stop density and short service times contribute to increased efficiency on the last mile.
However, true effectiveness is achieved with high drop factors. For instance, if 10 seconds per package are saved on a route with 200 packages in service time, approximately 10 more packages can be delivered on the tour. Delivering 210 packages instead of 200 represents an efficiency gain of 5%.
However, if the delivery person manages to increase the drop factor from 1 to 20, in simple terms, they can deliver 20 times as many packages.