How to Manage Deliveries in a Volatile Economy

If you had a crystal ball that could tell you exactly what customers were going to order, how expensive fuel was going to be, what would happen to interest rates, and where the next big supply chain disaster would strike—well, you might be better off playing the lottery. But for the rest of us, grappling with the current economy means dealing with a lot of unknowns. Delivery organizations increasingly need to manage rising expectations, rising costs, and rising uncertainty—and they need a way to succeed in spite of those challenges.

At the end of the day, there’s no magic bullet for grappling with the challenges that come with a volatile economic picture. At the same time, many of the most successful delivery organizations have weathered worse storms than this and are truly built to last. The question is how to find a path forward that keeps you agile in the face of changing circumstances while creating enough resiliency to help you power through any disruptions. 

How The Economy Impacts Last Mile Delivery

A rising tide is supposed to lift all boats, but what happens when the tide goes out? Often, it reveals processes that may not be working the way you think, or that might not be as sustainable as you hoped. 

Take delivery management as a representative example: both large retailers catering to consumers and distributors making regular delivery runs to other businesses have had to adapt to changing customer expectations in the past several years. The largest of the retailers have gotten into the habit of essentially sparing no expense when it comes to getting the right goods to the right place at the right time, leaning into the idea that fulfillment is at least as important as price or quality in the eyes of the customer. 

In an economy like the one we saw under covid, virtually any investment in last mile delivery was likely to pay off—especially when delivery felt like the only safe means of getting groceries, furniture, and thousands of other things. Businesses that couldn’t leverage national or international transportation networks suffered, and those that could often found themselves gaining a greater share of their markets. 

This is obviously a totally different set of delivery challenges than those that come up when economic headwinds change. When things are booming, your top last mile concerns might involve:

• Creating enough delivery capacity to meet demand
• Integrating seamlessly with 3PL partners to extend your delivery network
• Strategically planning your network to speed up fulfillment cycle times
• Delivering as many orders per day as possible

When you can’t count on the same levels of demand, whether it's because of tariffs or other factors, these concerns begin to evolve into different ones:

• Minimizing the number of trucks and drivers required to meet demand
• Optimizing costs via more efficient delivery planning and execution processes
• Right-sizing your fleet, warehouse space, transportation/carrier network, etc.
• Reducing fuel costs by driving fewer miles
• Working to increase first attempt delivery success and other KPIs
• Streamlining processes with an eye towards optimizing costs

The differences here are meaningful, and they’re a response to factors like rising fuel costs and less predictable demand. 

Delivery Management Best Practices for Navigating the Current Economy

Efficiency and optimization aren’t always the most pressing concerns for businesses that are trying to scale up rapidly to meet demand—but when you’re in it for the long haul (no pun intended), you have to examine your processes with an eye towards scalable, future-proof ways of doing things that will enable you to adapt to your circumstances. Here are a few ways to do that:

• Utilize cloud technology: True SaaS solutions are fundamentally more scalable, more secure, and more interoperable than their on-prem counterparts—which is why they’re an increasingly indispensable part of the modern delivery management technology stack. Switching to the cloud puts you in a position to stay adaptable in the face of both changing capacity needs and evolving technology demands. 
• Treat delivery management as a holistic process: Ultimately, you’re going to want to find serious cost optimization opportunities—but it’s difficult to make that happen when things like route planning, execution, delivery tracking, inventory management, etc. are all conducted within their own individual silos. By connecting all the different touchpoints that make a stellar delivery experience possible, you can much more easily spot areas where simple changes will make your operations more cost effective. 
• Prioritize flexibility: To put it simply, it’s never been more important to be able to adjust your delivery plans (to say nothing of your execution) quickly as conditions change. How do you make that happen? It starts with total strategic visibility into what you’re actually doing across the last mile. From there, you’ll want fast, powerful routing software that can actually keep up with changing needs and priorities and empower you to adjust plans on the fly. When you can actually take surprises in stride by updating your plans quickly and efficiently, you can weather uncertainty while keeping your customers happy.
• Stay focused on the customer: The last thing you want when things are uncertain is to let the uncertainty spill over into your customer experience. Whether you’re delivering to consumers or other businesses, you need to make sure you’re providing an experience that delights. That means making sure you’re delivering at the right time, that you’re keeping customers informed throughout the process, and that you have the capabilities to manage exceptions quickly and effectively before they become huge headaches. 

How to Implement Flexible, Adaptable Last Mile Delivery Programs

It’s totally understandable if you’re thinking that all of the best practices above seem easier said than done. We’re not gonna lie, what we’re describing requires you to have the right technology, tools, and processes in place across your operation. But when you can make that happen, you can grapple with economic conditions much worse than the ones we’re seeing now—you can minimize fuel costs, boost customer retention, and create new sources of efficiency that will help your bottom line. 

How do you make that happen in practice? Here are a few steps:

• Implement routing technology that’s actually fast—you want to be able to adjust routes on your feet, rather than losing out on efficiency because you’re stuck with outdated routes. 
• Implement routing technology that’s actually integrated—routing, planning, and execution all need to happen within the same system if you’re going to take a holistic approach to cost optimization and flexibility in your delivery management. 
• Communicate with customers constantly—specifically, communicate real-time, up-to-the-minute delivery data whenever you can; different customers will have different needs, but visibility is crucial for everyone. 
• Leverage AI—not only does AI give you the ability to calculate efficient routes much more quickly than you possibly could be hand, it also enables you to predict delivery time windows with much more accuracy; this enables you to actual keep the promises that you make to your customers. AI is already having a huge impact on the economy, so it's a great time to make sure that works in your favor. 
• Enable strategic visibility—data isn’t a good in and of itself; instead, what you want is the right data, in the right place, at the right time to make the right decision. When you have a solution that gathers copious amounts of data and then actually presents it to you in an intuitive, user-friendly way, you can achieve strategic visibility and reap the benefits that come from faster, better-informed decision making. 

Many of these steps will ultimately come down to your choice of technology provider—but they also reflect something more fundamental. Speed, strategic visibility, AI, and connectivity/integration are operational priorities that point you towards smarter, more efficient, more future-proof processes—which is exactly what you want when economic volatility is looming.