Managing Last Mile Delivery Contracts with the Right Software

Here’s a good problem to have: having such a high volume of delivery orders that you can’t handle them with your existing fleet and have to work with contractors. It means that you’re doing something right in your go-to-market approach, and your products or services are really speaking to your customers.

At the same time, getting those orders fulfilled can come with real headaches. Managing deliveries through owned fleets can be challenging enough as it is, and it only gets more challenging to ensure consistent levels of service and on-time deliveries for your customers when the delivery is being carried out by final mile delivery independent contractors or third parties. 

Maintaining visibility, efficiency, and connectivity can be a huge challenge, which means that getting the most out of your last mile delivery contracts is far from a given. At the end of the day, there’s no substitute for the right technology when it comes to managing last mile delivery contracts. 

Last Mile Delivery Contracts: The Basics

Last mile delivery contracts outline the expectations, details, and requirements for last mile deliveries being carried out by last mile delivery independent contractors. This might take the form of a small carrier, an independent contractor, or any other part of the last mile delivery ecosystem. 

You might expect the contracts to cover a few crucial areas:

• On-time delivery requirements/late delivery fees
• Payment rates for different deliveries and delivery types
• Duration of the contract and/or its renewal period
• The scope of what’s included in the delivery contract (i.e. any additional services or expectations) 
• Metrics to be tracked over the course of the contracts
• A termination clause outlining reasons the contract can be terminated and what happens when it is

Some of these are fairly legalistic in nature, but some of them are more operational. As you get into the weeds, these contracts can start to dictate things like technology usage and performance tracking requirements—i.e. exactly the sorts of things that you try to optimize in typical last mile delivery management scenarios. 

Challenges in Managing Final Mile Delivery Contracts

There are plenty of reasons it can be challenging to manage a logistics network that relies on last mile delivery contractors, but none of them are insurmountable with the right approach and the right tools. 

Here are a few of the most important hurdles to clear to maximize the value you get out of your last mile delivery contracts. 

Gaining live delivery visibility

This is something that even many first party deliveries lack, so it’s not too much of a surprise that contracted deliveries can make that even more difficult. Unfortunately, a lack of visibility is effectively the default whenever you have a third party carrying out a delivery. Sure, you can call them or hope for proactive status updates, but without any sort of protocol and tool in place you’re effectively flying blind. 

There are different ways to solve this, but they all essentially come down to data integration. Your contractor or carrier needs to find a way to provide a direct feed of delivery data to whatever system you’re using, so that you can track deliveries in real time or near real time. 

Getting a 360-degree view of your operations

Whether you’re running a mixed fleet or you’re relying entirely on last mile service providers to fulfill orders, you don’t want fragmented information. You need to be able to see how deliveries from different providers are playing out, all from the same view—otherwise you’re stuck hunting for the data you need in moments when information is already potentially going out of date. 

This is another area where data integration is the starting point—but from a posture of having integrated delivery data, you can then focus on prioritizing true data visibility. 

What do we mean by visibility in this context? It’s not just having data lying around—it’s about having the right data in the right place at the right time. In other words, organizing your data flows so that getting the right information—say, which trucks are running late on a given day—is the default. 

Here, UX plays a major role. If you have a delivery dashboard that’s actually intuitive and easy to understand at a glance—and that can show you all of your deliveries in real time no matter who’s fulfilling them—then you can achieve real visibility and control over your third party deliveries. 

Maintaining control of the customer experience 

Delivery teams are the face of your brand—and your customers are generally not going to draw a fine distinction between first and third party deliveries. Whoever shows up at their doorstep they’re going to think of as a brand ambassador for your business, and your teams that will get blamed if something goes wrong. 

Obviously, within your final mile delivery contracts you can build in language about how your last mile service providers are supposed to deal with customer experience and what success metrics they need to meet. At the same time, the best practice is to make it easy for them to provide a great customer experience by ensuring that they have everything they need to make it happen. 

There are a few different approaches you can take here. On the one hand, you can handle the customer communication element of the deliveries yourself. To make this happen, you need live, accurate data from the 3PL or contractor (as, frankly, you need in all of these instances). But if you have real-time routing, location, and status information, you can stay in control of the customer communication cadence—with each text, email, and alert reflecting your brand voice and tone. 

The trick with that approach is to make sure there’s no disconnect between what you’re telling customers and what the delivery provider is actually up. By contrast, you can leave the communications to the contractor—which comes with obvious risks, but is simpler for your teams. If you’re taking this approach, you may want to ensure that they have a direct line to your contractor drivers for any situations that call for expertise in your products that last mile delivery contractors might not have. 

How the Right Software Can Help

We’re not afraid of sounding like a broken record: When it comes to managing final mile delivery contracts, there’s no substitute for visibility and connectivity. And in an industry where poor visibility is the default, you’re always going to need some help to achieve that and ensure a great delivery experience for your customers. 

This is where the right last mile delivery software is non-negotiable. Modern last mile delivery solutions should offer you a connected logistics experience—from routing and order management to delivery tracking, customer experience, and documentation—regardless of who’s performing your deliveries. In this way, you can gain control over your entire logistics network from a single command center. 

How do you know a particular software solution is going to work for you? Look for something that connects seamlessly with other solutions in your technology stack, easily pulls in data from contractors and third parties, and gives you as much control as you want over customer delivery experience.

If you can find all of that in a single solution, you can get the most out of your delivery contracts, keep your delivery costs manageable, and ultimately delight your customers across the board.