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The top priorities of last-mile delivery providers are…

Last-mile delivery budgets are on the rise.

A new survey reveals that larger and smaller logistics providers have different areas where they are focusing performance improvement efforts.

According to a new study of retailers and logistics providers from delivery management platform provider FarEye, logistics respondent priorities for last-mile delivery (the end stage of delivery from a pickup point or sortation center to a package’s final destination) vary by annual revenue.

For logistics respondents with over $100 million in revenue, on-time delivery (74%) and cost per delivery (62%) are their top two priority last-mile delivery key performance indicators (KPIs) to improve. Among logistics respondents with less than $100 million in revenue, their top two priorities are cost of delivery (73%) and customer satisfaction (64%).

Over the next year, 77% of all logistics provider respondents expect their budgets for last-mile delivery technology to grow. Eighty-two percent claim they will likely change or buy a new last-mile delivery solution in the next one to two years.

About half that share (40%) of surveyed logistics providers expect to buy a last-mile delivery platform in the next five years, while another 40% plan to build their own in-house (40%). 

To make their last-mile delivery fleets more sustainable and efficient, 80% of logistics respondents are evaluating the use of electric vehicles over the next five years. Much smaller percentages are evaluating the potential of autonomous vehicles (44%) and drones (38%) in that time period.

Looking at retailers, the study found that 64% of retail respondents said outsourced delivery networks have become a way to increase speed to deliver, while 37% said they help reduce cost (37%). 

“Unlike retail, last-mile delivery is the backbone of logistics providers’ operations and their goals will be focused on delivery performance and cost efficiencies, above all,” said Stephane Gagne, VP, product, FarEye.While their priority improvement metrics don’t differ heavily from retailers’ priority improvement areas, the difference lies in the size of the logistics provider. With size comes complexity, but also efficiency, where the cost per delivery goes down, but the difficulty in managing and tracking orders goes up.”

[Read more: Here’s why last-mile delivery is so expensive]

FarEye and Researchscape International analyzed responses from 300 executives across retail and logistics with responsibility for logistics and retail operations in the U.S. (32%), EMEA (36%) and APAC (32%) regions.

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