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Same Day Delivery is rolling and industry growth projections are pointing up. But the rapid growth of the delivery industry has attracted inexperienced players to the market. This rapid development leaves positions of power and management in the hands of people who do not have enough experience in the field, opening the door to critical mistakes and missed red flags.
Neglecting the basics in safety regulations creates future harm potential. By becoming more stringent in these 3 key areas, businesses can keep pace with growth while mitigating potential losses and risks:
This is further complicated by the short lifespans of businesses in the industry. A fleet of commercial vehicles generally has a lifespan of 2-4 years before mechanical issues begin taking their toll. Businesses not consistently performing preventative maintenance will eventually experience unwelcome financial hardships.
Many companies that enter the last-mile space find profits tough to come by and leave the industry as quickly as they charged in. This is creating a tumultuous period for partners and customers. Additionally, nuclear verdicts and businesses allowing serious improprieties such as reckless driving are plaguing the industry, pushing premiums higher, and making the hard insurance market more unaffordable.
Lawsuit verdicts that used to go in favor of businesses are now frequently resulting in enormous payouts for claimants. If companies continue to dodge safety regulations in favor of higher profits, it will negatively affect businesses, the insurance market, and commercial transportation.
The current, in-demand two-day home delivery model seems unsustainable. It forces increased fuel consumption and unsafe driving that skirts regulations. With FedEx and UPS adding surcharges for residential deliveries due to the inconvenience of delivering a single package to one location, others will likely follow suit. These additional costs will affect how the structure transforms over time.
More centralized delivery points will likely become more commonplace as last-mile continues to grow, similar to the Amazon locker model. Having multiple fleets with their own drivers hitting the same geographical locations is not viable long-term, as businesses do not share the same flat rate and muddy the competitive waters.
To ensure a sustainable last-mile future, last-mile delivery businesses must do everything they can to mitigate risks. While we wait for better fuel efficiency, capable electric vehicles, or other solutions, responding proactively to the known variables can make this growth transition a smoother ride.