The growing risk from last-mile deliveries

Logistics companies making last-mile deliveries and particularly their drivers are under increasing pressure to deliver goods fast and within a specific time window. Technology can help fleet managers to better monitor processes and mitigate the risk of accidents.

After decades of steady growth, the forced closure of physical retail stores during the Covid-19 pandemic saw an explosion in the volume of online retail, with many retailers forced to rapidly scale-up their operations in order to meet demand.

Although physical stores have since recovered some of their lost footfall, the shift online shows little sign of decline. Major retail events, including Black Friday and the peak Christmas shopping period, are now increasingly conducted online. Online retail sales are now forecast to grow by double digits through 2023 (opens a new window), equalling a 22.3 percent share of total retail sales worldwide.

Expectations are also shifting when it comes to online retail. Where consumers were once content to wait multiple days for their goods to arrive, today the sector is seeing increased demand for next-day, same-day, and other efficient delivery methods.

Offering flexibility between these choices is also an increasing priority, as consumers seek to tailor delivery schedules around their lifestyles. Consumers are showing greater willingness to avoid or switch logistics providers in search of a better service, something service providers need to take into consideration.

Logistics under pressure

With last-mile deliveries being a relatively recent trend, many buildings have not been designed with delivery drivers in mind. This is a particular issue in densely populated urban metropolitan areas, where last-mile deliveries are most prevalent, but parking is limited.

For drivers, this encourages the use of curb-side parking. This presents further issues, however, including the possibility of a parking fine, damage to delivery vehicles, or harm either to passers-by, or to the drivers themselves. There is also a risk of damage to property, particularly when it comes to the delivery of larger goods, when trucks and other heavy-load vehicles may be required to navigate tight spaces.

As the volume of deliveries continues to increase, drivers are also finding themselves under increasing pressure to work and deliver faster. A global shortage of labour post-pandemic is further exacerbating this trend, with drivers relied upon to compensate for delays throughout the logistics supply chain.

Faced with tougher targets, drivers are more likely to neglect safety or security procedures, either by driving above the speed limit, parking without care, or carrying more packages than recommended, thereby risking personal injury. Drivers might also take greater risks in terms of where they place goods when recipients aren’t present, leaving those goods vulnerable to theft or damage.

As the volume of deliveries increases, operators must also be mindful of a growing number of dissatisfied customers. This necessitates a higher volume of so-called ‘reverse’ shipments, with goods shipped back through the supply chain, reintroducing many of the same risks.

Additional concerns for operators

Operators should be conscious of multiple associated risks. Despite the likes of Amazon and other major retailers operating a significant delivery fleet, it remains standard practice among many logistics and delivery providers, retailers, and restaurants to employ drivers on an individual ‘gig’ basis.

In such cases, drivers typically use their own vehicle. As a result, the level of insurance coverage they are required to provide may differ from that of long- or short-haul drivers. They may also be employed as independent contractors, as opposed to Pay as you Earn (PAYE). Businesses must therefore think carefully about the type of insurance they require.

Mitigating risk from last-mile deliveries

Thankfully, there are plenty of tools available to help logistics operators and retailers mitigate last-mile risk.

The installation of cameras can be a simple and effective way to ensure the safety of vehicle assets, while also helping to reassure drivers of their own safety.

If theft or damage does take place, camera footage can also help operators identify culprits, with many solutions offering downloadable video footage, providing companies with proof of the incident. This in turn can help to accelerate the process in the event of a claim. In addition, tracking tools enable operators to monitor the live location of their vehicles, which can then be shared with police and other third parties to aid recovery.

Similar technology can also facilitate safe driving. Again, the installation of cameras provides drivers with a clear view around their vehicles, increasing the likelihood of seeing pedestrians, cyclists, and any other vulnerable road users.

When it comes to the monitoring of driver behaviour, advances in telematics tools now make it possible for companies to record various valuable datasets, including driver speeding, harsh acceleration and braking, or sharp cornering.

Other tools can add further depth and insight, allowing companies to look more closely at performance in relation to specific factors, such as road type, road surface quality, and specific weather conditions. Past claims and accident data can also help operators identify trends and determine effective solutions.

Integrating telematics and fleet management tools can create an opportunity to further reduce risks and potential losses.

Benefits can include:

  • Creating a more complete risk analysis through the combination of driver behaviour information and data on accident rates, medical histories, and fines

  • Ability to attach engine fault codes to work requests to speed up repairs and enhance preventative maintenance

  • More efficient safety monitoring

  • Improving routing

  • Eliminating costly idling

  • Streamlining processes by eliminating administrative time

  • Improving accuracy by eliminating redundant data entry

By acting on this data, companies can tackle poor driving behaviour across their fleet. This can reduce the number of incidents that occur and lower the expensive claim costs that come with a high number of collisions and accidents.

For further information, please contact:

Steve Vachre – Motor Practice Leader

M: +44 (0)7391 385697