Last Mile Delivery Software: What It Is, How It Works, and Why You Need It

What does Sam from the accounting department, his ex-GF, your HR, uncle Lou from Shanghai, and that client in Honolulu have in common? They all want their orders to be delivered the same day they were ordered-no asterisks.

If they were your customers, you probably would have lost them already to a competitor that offers same day or faster delivery. People might be divided by opinions and politics but when it comes to delivery, they unanimously agree on one thing they want their orders delivered faster. Let healthcare, education and sixth amendment take a back seat, I want my Dorito to be delivered now and I don’t care how.

And if you could deliver the same day, they would still be like why not do it in the next couple of hours. What do you need the entire day for?

Their expectations would keep on rising until we reached a stage wherein, we could deliver their orders as soon as they were ordered.

There is a reason retails giants like Walmart and Target are after business models of upcoming start-ups like Instacart and DoorDash. If those can deliver pet and dairy supplies in an hour, what is stopping them from delivering an entire month's supply in the same time frame?

Last-mile delivery might be all buzzword today. It might have an entire stack of startups sitting on its back. It might have investors’ and VCs’ undue attention. It might have traditional e-commerce and logistics companies biting their nails.

No matter the challenges and cost, last-mile delivery is an opportunity that no business can afford to miss. Yet only a few have the resources and flexibility to deliver the experience to its impatient customers. Before we dive down into what it takes to nail down a last-mile delivery experience, let’s take a look at the state of the last-delivery service market.

Last mile delivery services market stats and growth

According to a report by Fareye, 84% of consumers would not shop at a retailer after having a bad delivery experience. Another report suggests 70% of consumers say speed, convenience and friendly delivery service matters the most.

Our customers expect fast, accurate, and convenient delivery of their orders while representing the most challenging and costly part of the supply chain process. According to a report, last mile delivery accounts for more than half of a product’s delivery charge. For every $10 spent on delivery, we are paying ~$6 of it to a last mile delivery partner.

Nevertheless, according to Statista, the global last mile delivery market is expected to grow at a compound annual growth rate (CAGR) of 8.13% and will reach $288.9 billion by 2031.

As consumers and competition push the current delivery infrastructure to its limits and we move from a delivery window spanning a few days to a few minutes, the challenges and costs are only going to multiply. In fact, 90% of consumers see two- to three-day delivery as the baseline and 30% of consumers expect same-day delivery.

However, what exactly is last-mile delivery?

What is last-mile delivery and why is it essential to the supply chain

Last-mile delivery is a buzzword created by logistics and on-demand delivery companies like us so there is no definitive definition.

Definition of last-mile delivery

Without getting into the nitty-gritty of supply chain and logistics jargon, think of it as the last leg of a delivery service. If you would have ordered from Amazon, it is the phase when the delivery person picks your order from a nearby fulfillment center, puts it in his courier bag, starts his van, navigates to your home, delivers your order and sends a proof of delivery to the logistics company.

If you are an on-demand startup like DoorDash, then last-mile delivery is your entire business model. Your entire job is picking something from a store and delivering it to a customer, but is it?

We might have oversimplified your job for the sake of definition, but we know how complicated last-mile delivery over other legs of the supply chain. We know how many uncertainties you meet while working on a shrinking delivery window. Boy o boy, did I even mention the additional cost every time customers aren’t home or there is a roadblock or traffic jam? I hope you’re not making your delivery partners dodge avalanches and hurricanes to deliver an order. Regardless, we got your back.

Explanation of its critical role in logistics and customer satisfaction

We often underestimate the power last-mile delivery service has over to make or break your brand. This is not your ordinary multiple day delivery service from Amazon or Walmart. We are talking about an extremely time sensitive market.

Here you under promise and over deliver. Not the other way around. An hour delivery probably means 15 minutes’ delivery. I know this is confusing. So is the customer ordering Cheetos at 4 AM in the morning. Don’t make sense of it just deliver what you promise. Your customer won’t be satisfied even then but as long as you are outdoing your competitors, they won’t have anywhere else to go. You’re content.

For every bad rating from your customer, you give another boost to your competitors’ standing in the market. They may not be into the 15-minute delivery game but as long as they say 1-hour delivery and deliver it in 30 minutes, customers won’t nudge.

Our customers are not just after instant gratification but predictability too. Companies like Walmart and Amazon may have their own fleet of delivery persons, trucks and cargo aircraft, advance software tools and uniformly distributed fulfillment centers taking more real estate than a small European country. Yet they have a separate division to handle last-mile delivery operations. They have delivery partners and warehouse managers especially trained for last-mile delivery.

Large e-commerce platforms are even establishing mini fulfillment centers and warehouses in urban locations to cut distance between last-mile deliveries. Traditional retailers like Target and Walmart are proactively employing technologies like predictive analysis, generative AI, data analytics and pattern recognition in their last mile delivery solutions to thwart some of its inheriting challenges.

We have all heard of drones, self-driving minivans and other forms of autonomous deliveries. In what other areas of supply chain did you see so many innovations incoming?

Retails brands recognize the potential a small last-mile delivery startup having figured out last-mile delivery game has to upset their bottom lines. They, also, know what kind of damage a little overpromise for competitive gain can do to their brand image in the long run. If even large corporations with billions in operational and marketing budget are struggling to figure out last-mile delivery despite knowing the stakes, we know we have to mark this territory with a little bit extra caution.

Before we get into the last-mile delivery challenges, we understand the distribution of last-mile services.

Diversity of last-mile-delivery services.

What a last-mile delivery services entails depends a lot on the diverse nature of customer experience and what did you promise. Our customers don’t always run out of things in the middle of the day, sometime what they order is not so urgent and it doesn’t matter if it’s delivered the next hour, evening, same day, or the next morning. Therefore, the stakes that a last-mile delivery carries depend upon customer expectations with the delivery.

On-demand delivery

On-demand delivery is a blanket term for any product or service that requires you to go to, comes to you. You don’t go to the barber. The barber comes to you equipped with all the tools and materials required to give you the perfect trim. Rather than going to a nearby convenience store to buy pet supplies, you DoorDash it. Rather than standing on the alleyway to hail a taxi, you Uber it. You get the idea where I am going with this.

On-demand delivery is traditionally an area of disruptive startups, trying to disrupt an industry, consolidate industry players, bring advanced technology, and eventually monopolize the industry.

For on-demand delivery service providers, last-mile services are the crux of their service portfolio. Every technology, training and competence aside if they cannot deliver before the promised time to the customer.

Scheduled delivery

Not always your customers expect their orders to be delivered in the next couple of hours. Sometimes they want it on a particular time slot on a particular date. This is more like a doctor’s appointment; you have got to be at the diagnostic center at 4pm Saturday or you will miss the diagnostic. You may reschedule though only if time slots are available.

E-commerce platforms and professional aggregation platforms sometime have to work like appointment managers too for their delivery person or aggregated professionals.

In such cases, for last-minute delivery service the key isn’t a time window, but a time slot. If the delivery person was dispatched 30-minute late for the service appointment, they will be late again for their next appointment and so forth. This could eventually lead to a customer service disaster, even media and social media escalations.

The stakes are the same scheduled delivery or last mile delivery. It is just that punctuality takes the place of urgency, and everything falls on the last-mile delivery provider’s shoulders.

Same-day delivery

Same-day delivery is often associated with Amazon Prime subscription. After all, the reps at Amazon came up with the idea of same-day delivery. Sooner than later, they realized that next-day delivery is too damn slow. The e-commerce industry hasn’t been the same ever since.

The success and failure of a same-day delivery is closely aligned with quality of associated last-mile delivery service. Same delivery means anytime of the day as long it is the same date the customer ordered. Of course, the stakes are the same for retailers but not so much for delivery person since they have entire day to deliver.

Amazon ensures same-day delivery is not turning out to be next-day delivery rather by using a method called near sourcing. Depending upon the postal code of the user logged in, it only tags items nearest to the users as “Same-day delivery”. Not to mention, retailer giants such as Amazon and Walmart have sophisticated last-mile delivery software solutions to anticipate demand curve for each product and thus move it forth and back between area of demand and supply. Did you know you too can create a demand projection machine inside your last-mile delivery solution?

How can software solutions enhance last mile delivery management?

To overcome challenges, reduce cost and improve last mile delivery performance, logistics companies leverage software solutions that can help them manage, track, and optimize their delivery processes:

Convenience may look like what’s-the-big-deal to the customers; it is only us, the retailers and service providers, who know what it takes for a last-mile delivery to be successful. How things have to be in exact order for that pack of yoghurt to be delivered on time. Of course, it is beyond the scope of any individual or team to manually manage the intricacies of a last-mile delivery operation. You need an entire software stack of backend services, UI/UX elements and of course native mobile apps for such an operation to take effect. Not just any last-mile delivery software solution but with these features:

Route optimization

Last-mile delivery happens typically on urban roads and mostly during business hours. This means your 30-minute delivery will turn into 2 hours ride if the driver partner meets a traffic jam or roadblock.

That is, you must help the delivery person determine the most efficient route to ensure timely fulfillment. The software must stream real-time location-based data such as traffic, weather and road conditions to the driver’s app in order to save their time and fuel consumption.

Dispatching

At a given notice, you would have several available, offline and engaged drivers. You need to allocate drivers to orders in the most efficient manner. This is called dispatching in terms of on-demand delivery terminology. Manual last-mile dispatching services would be a job too tedious even for a moderately large team.

An inbuilt dispatching algorithm that would use conventional wisdom and custom business rules to auto allocate drivers to incoming orders would be a boon. Especially, if the algorithm is a part of your last-mile delivery solution’s software stack. The facility would also be good for the last-mile delivery provider’s cost projections and driver’s compensation and wellbeing.

Tracking

You want a clear picture on the status of your last-mile delivery operations. You want to know which drivers are enroute to a delivery address, which are free and since when, how many of them are offline, and which drivers are slacking out despite a pending delivery.

The software can grab their location and other data from the driver’s app to show live statuses on an interactive dashboard with last mile solutions for tracking.

Communication

It takes more than one stakeholder to run a last-mile delivery operation: you--the last-mile delivery company, the drivers, the customers, and the third-party logistics providers. You not only have to facilitate communication between them but also monitor it to ensure safe play, best interests and compliance.

If a driver has met with an unavoidable circumstance and they might be late for the delivery, they must be able inform the same to the software and customer’s app.

Real-time updates

You want the software to proactively monitor monetary, software and operational performance of your business and deliver real-time updates in the case of a downtime. For example, updates should arrive if logging services on a driver’s app stops working or tracking services starts displaying obsolete location data.

Real-time updates can be customized to dismay the disparity between ideal and current working conditions of the software solution.

Proof of Delivery

You must be able to verify and confirm the completion and success of the delivery, which might require the software communicating between driver’s and customer’s app and deducing a verdict based on an inbuild algorithm that takes discretion, location and feedback into account. By keeping evidence and documentation of the delivery transaction you may reduce delivery disputes, increase delivery compliance and improve delivery reputation.

Driver feedback

You claim to have the best fleet of drivers in the industry. You have handpicked each of your drivers with an impossible screening process. However, your customers might have a mind of their own. They want to give feedback on your driver after each delivery. The software might use the feedback data to improve areas of the last-mile delivery solution such as dispatching and routing.

Also, it is not going to be your drivers every time, you might sometime need the services of a third party last-mile service provider. The feedback will come in handy when billing them.

How Does Last-Mile Delivery Software Work?

Most solutions follow a predictable last-mile delivery process flow that can be deduced from the above section. That is, it automates some part of the workflows, takes input from associated driver and customer apps and ultimately gives you important stats and figures on the last-mile delivery operations. Although the workflow is similar across the board, how a software is practically implemented in its individuality is a total game changer.

Workflow of a last-mile delivery software

Last mile delivery software provides features to manage and streamline deliveries from the warehouse to the customer’s front door. Last mile delivery software performs these tasks through various functionalities:

How integrating last-mile delivery software will transform your operations

Modern logistics software development, while transcending the entirety of a supply chain from supplies and manufacturing to final delivery, lacks the features, commands, and algorithms that are critical to last-mile delivery operators.

If we look at a supply chain, it is mostly shipping, air cargo or trucking connecting a bunch of warehouses, terminals and fulfilment centers in between. If you compare last-mile delivery to the rest of the supply chain in an apples-to-oranges comparison, you will realize last-mile delivery represents only a tiny dot in terms of distance. This is the reason traditional last-mile delivery software solutions tend to be a little lacking when it comes to last-mile delivery specific features.

If that is the case, you may either upgrade your existing software by integrating additional features or build a software solution from scratch. You may talk to one of the NNT Digital representatives to determine which is the best path for you in terms of cost and time. NNT Digital has a team of enthusiasts, industry experts and web and mobile developers that are committed to making software a better place for on-demand applications including last-mile delivery applications.

Why Is Last-Mile Delivery Software Essential for your business?

According to various reports, the global last mile delivery market size was valued at around USD 132.71 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 8.8% from 2023 to 2030. Some of the key drivers propelling the market growth include the rising popularity of online shopping, the increasing demand for same-day or next-day deliveries, the emergence of innovative technologies such as autonomous vehicles and drones, and the challenges posed by urban congestion and sustainability considerations.

Let’s take a look at why last-mile delivery software is essential for your business.

Last-mile delivery software—area of applications

Up until that point, we have perceived last-mile delivery as a service to pick up items you don’t want to pick up yourself. For example, you can’t go to the nearby store to buy fabric softener, but it is laundry day. So, you order one from your favorite on-demand delivery app and get it delivered in less than an hour.

Likewise, you can extend the functionality of the same piece of software to include features such as drop, pickup and drop, and service booking. It could be delivered to customers and drivers in the form of a separate app or the same one depending upon the user experience you want to deliver.

Drop services come in handy when your customers want to drop parcel to their nearest DHL or FedEx office. You yourself would have come across a situation wherein you forget to put the house key under the rock and your partner is there at the door complaining. In that case your customer may use a last-mile delivery app to pick up the key from your location and drop it at your partner’s.

Service booking is another profitable and emerging area you can repurpose the software to. With simple modifications, you could make it from ordering products to doing service booking. Imagine your customers summoning a babysitter sitting at home from the mobile app.

Key industries transformed by last-mile delivery software

Last-mile delivery software isn’t restricted to a certain industry, but the solution can be customized to cater to any industry that has customers who want faster, cheaper, and more convenient delivery services. As a result, last-mile delivery solutions have transformed various industries and sectors. Let’s look at some of them.

Courier and postal industry

Courier and postal industry have been at the cornerstone of e-commerce revolution. The likes of Amazon and eBay wouldn’t have existed; so, wouldn’t have online retailers had it not for established logistics companies like UPS, DHL and FedEx playing along. Imagine how hard it would have been for logistics companies to go from sending stuff to your grandfather down the county over the next week to delivering toiletries during peak New York traffic on a Monday morning.

Last-mile delivery solutions helps the courier and postal industry by:

Home cleaning, repairs, and maintenance

As urban households are getting busier and working harder to counter post COVID19 inflation, they are doing less DIY and relying more on professionals for home cleaning, repairs, and maintenance services. The service industry relies on modern last-mile delivery solutions to ensure quality and timely delivery services to different homes and customers.

Last-mile delivery solutions helps the Home Cleaning, Repairs, and Maintenance industry by:

Florists and gift services

In a world that is distant yet connected, alienated yet approachable, flowers and gifts come as a great option to surprise your loved ones on their special occasions. Except, the surprise becomes source of anxiety when your delivery partner fails to deliver them on time.

The challenge of delivering delicate and perishable items in a cost-effective manner amidst the increasing demand for fresh and personalized flowers is severe. The industry players need last-mile delivery solutions to remain competitive:

Grocery industry

Last-mile delivery services have literally changed the way we order groceries in the last few years. Gone are the days when we had to visit the nearest 7-Eleven every time we ran out of essentials. Today, most of these grocery essentials can be ordered from your favorite grocery delivery app in a matter of minutes.

The convenience for customers and a hypercompetitive startup environment creates a hostile environment for industry players to work in. Fortunately, last-mile delivery software solutions much needed relief.

Food and beverages industry

The sheer scale at which we are ordering hot and fresh food and drinks is enough to bring an entire fleet of delivery people on their knees. The industry simply can’t function without an efficient last-mile delivery software solution and still doesn’t end up in a catastrophe. The solution puts up various benefits of last-mile delivery software:

Cannabis industry

The cannabis industry is a new and emerging industry that has been transformed by last-mile delivery software. With the increasing legalization and regulation of cannabis, the cannabis industry has to work around a highly regulated and sensitive product. Software solutions make it possible.

Last-mile delivery software helps the cannabis industry by:

Pharmacy industry

Imagine delivering prescription drugs to elderlies in seniors’ home. You can’t be late; you cannot compromise on quality, and you must assure reliability. For the pharma industry, the rise of on-demand services has been particularly hard. They were already late to the game. The pharmaceutical industry may not be the biggest beneficiary of last-mile delivery services, but they are catching up fast thanks to a plethora of software solutions at their disposal.

Last-mile delivery software helps the pharmacy industry by:

How To Build Last-Mile Delivery Software?

Years of experience building software for the ecommerce industry means NNM Software has a fair idea what are the all steps involved in building the ultimate last-mile delivery application. You might accuse us of generalizing about a vast field but trust us we have made a lot of those solutions and at the end of the day they turn out to be not very indifferent.

Steps and considerations in developing a last-mile delivery software solution

Choose the right technology stack and architecture

Just as a building is erected by stacking bricks, software is built by stacking technologies. Software technologies include programming languages, tools and libraries, APIs and SDKs, and development frameworks.

Choosing the right stack for a software project is as important as selecting building material for your structure. If you don’t get them right, they might crash. Technology stack will ultimately decide the fate of your application in terms of upgradability, maintenance and use experience. We will talk more about technology stack in the upcoming section.

Develop core features and user interfaces

Core features are those functionalities without which a software system cannot be referred to as working. Take a watch for example, would you call it working if it doesn’t show the correct time. Likewise, can you call your last-mile delivery software working if it cannot dispatch and track drivers?

User interface is how users interact with functionalities in a piece of software. The user interface of a software system is generally a set of UI elements such as hyperlinks, buttons, dropdowns, etc. A software solution without UI is as good as a building with electricity but no power outlets.

Integrate with existing systems and APIs

APIs are how two parts of a software system communicate with each other. If the tracking module of your software cannot determine which drivers are available to take fresh orders, how would you dispatch drivers in the first place?

Software integration is integral to making complex software modules such as last-mile delivery solutions to work.

Test and refine the software for performance and security

Testing and refining your software for performance and security can ensure the satisfaction and trust of your users, as well as prevent any potential risks and threats. 

Features of Last Mile Delivery Software Development

Last mile delivery software development involves developing features and user interfaces for different roles and stakeholders. At NNM Software, our service delivery includes Android and iOS apps for customers and drivers, and a web app for admin when developing last-mile solutions.

Customer

The customer is the end user who places an order from the last-mile delivery app and receives the delivery. The features of last-mile delivery software development for the customer include the following: 

Order placement

Customers place an order online or through a last-mile delivery app, choosing the products, quantity, payment method, delivery address, and delivery time window. 

Order tracking

Customers track the status and location of their order in real-time, using a web page, a mobile app, or a SMS notification. They can also see the estimated arrival time and the driver's contact information. 

Order confirmation

Customers can confirm the receipt of their order using a digital signature, a barcode scan, or a photo capture. They can also provide feedback and rate their delivery experience. 

Order management

Customers can manage their order history, preferences, and profile. They can also request additional services, reschedule, or cancel their order. 

Driver 

The driver is the person who transports and delivers the goods to the consumer. The features of last mile delivery software solution development for the driver include the following: 

Order allocation

The driver can receive and accept orders assigned to them by the dispatcher or the software. They can also see the order details, such as the products, quantity, delivery address, and delivery time window. 

Route optimization

The driver can get the most efficient and cost-effective route for their deliveries, considering factors such as traffic, road conditions, delivery time windows, and customer preferences. They can also get navigation and directions using a GPS or a map. 

Order status

The driver can update their order status, such as picked up, in transit, delivered, or failed. They can also communicate with the dispatcher, the consumer, or the warehouse using a chat, a call, or a SMS. 

Order verification

The driver can verify the delivery of their order using a digital signature, a barcode scan, or a photo capture. They can also collect feedback and ratings from the consumer. 

Admin

Admin manages and coordinates the delivery operations. The features of last mile delivery software solutions development for the admin include the following: 

Order distribution

Admin can assign orders to available drivers or couriers, either manually or automatically. They can also balance the workload and availability of their resources. 

Route adjustment

The route optimization software can adjust the routes or schedules of their drivers or couriers in real-time, to account for unexpected events or issues, such as traffic, weather, delays, or cancellations. 

Order monitoring

The dispatcher can monitor the status and location of their orders, drivers, and vehicles in real-time, using a dashboard, a map, or a report. They can also track the performance and quality of their delivery operations, using metrics such as delivery time, distance, customer satisfaction, driver performance, cost and logistics of last-mile delivery. 

Recommended technologies and frameworks for building robust software

We talked about tech stack a bit in a previous section and understood what the significance of tech stack in software development is. To fully understand the concept, a common analogy you may take is that of a support center. The customer support department consists of two teams. The team receiving incoming support requests is called frontend, and the team resolving support requests behind the scenes is called backend.

Likewise, a software system has a frontend and a backend. Frontend is the part of the software we interact with via its UI. That is when we tap the big “Ride Now” button on Uber app, we are actually interacting with the app’s frontend. In response to that tap, the app’s backend services generate a series of calls that leads to the cab heading to our direction.

Let’s take a look at frontend and backend technologies, we might use in last-mile delivery software development.

Front-end

Common examples of frontend applications are web pages, mobile apps, dashboards, and maps. At NNM Software, some of the frontend technologies we work with are the following.

Back-end

Backend is where lies the business logic and happens the data processing, and communication with the external systems and APIs, such as the ERP, CRM, POS, GPS, and SMS. We use common and widely used back-end technologies, databases and frameworks such as the following:

Database

The database is the part of your software that stores and manages the data, such as the orders, products, customers, drivers, and feedback. Some of the common and widely used database technologies and frameworks are: 

I know this section came as a bummer to you since we have covered so many technologies in such a short while. Worry not, we are here to help you figure out which will be the best technologies when you start building your own last-mile delivery solution. As a custom last-mile delivery software development company, we have the team and other resources to deliver you the best quality software in the shortest time without breaking the bank.

Breakdown of technologies used in last-mile delivery software development

The figure demonstrates categories of technologies used in last-mile delivery software development, including backend, database, frontend and mobile technologies. The diagram also gives examples of mapping and infrastructure services you may use in software development.

With so many technologies required to develop last-mile delivery software, it is inevitable to fall into some challenges.

Challenges Involved in Last-Mile Delivery Software Development

Last-mile delivery software development requires overcoming challenges and sorting issues surfacing during the development process. The common last-mile delivery challenges that the software development system faces are the following: 

Integration with existing systems

Integration requires choosing the appropriate integration methods and tools, ensuring data accuracy and consistency, and handling errors and exceptions. It is easier said than done and requires a competent team that has worked on complex software systems before.

Real-time data management and security

It requires choosing the appropriate database technologies and frameworks, ensuring data quality and safety, and implementing encryption, authentication, and authorization mechanisms. This is the most challenging part to implement in the software and requires a great deal of co-ordination between data pipelines, presentation layer and performance monitoring system.

Scalability and performance optimization

Scalability requires choosing the appropriate technology stack and architecture, ensuring efficiency and reliability, and implementing load balancing, caching, and testing techniques. At NNT Digital, we tend to JavaScript-based technologies on the MEAN stack, which excels in the parameters. In our testing, we could run a million instances of a Node.js based chat application in a typical AWS EC2 instance without capacity or price overruns.

User experience design for different platforms

This means design principles and best practices, ensuring usability, accessibility, and responsiveness, and using the appropriate design tools and frameworks. This may look like a lot of tasks unless you rely on one of our experts. We know what separates the UX of a mobile app from its web app. We understand iOS and Android are two distinct platforms with different sets of design rules, user mindsets and development expectations. Apps developed for each platform should reflect their unique traits.

Regulatory compliance with data privacy laws

Last-mile delivery software needs to comply with the legal and regulatory requirements and standards related to data privacy and protection, such as GDPR, CCPA, and HIPAA. This requires identifying and understanding the applicable laws and regulations, ensuring data transparency and consent, and implementing auditing and reporting mechanisms during the entire software development lifecycle. 

What is the cost of building last-mile delivery software?

The cost of building last-mile delivery software can vary depending on various factors, such as: 

The scope and complexity of the project

The more features and functionalities you want to include, the more complex and costly the project will be. If we look at the table below, you can see the cost rises dramatically of last-mile delivery app development as we add more features to the MVP. For example, adding some advanced features to the app like real-time traffic updates and multi-modal delivery will double the cost.

If you are running a commercial business with the software, you cannot function without these advanced features. Adding enterprise features to your software development project will add further layers of cost.

The platform and device choice

The more last-mile delivery platforms and devices you want to support, the more costly the project will be. For example, building a native mobile app for iOS and Android will be more expensive than building a web app that can run on any browser and device. 

The technology stack and architecture

The more advanced and specialized the technology stack and architecture, the more costly the project will be. For example, using a microservices architecture and a MEAN or MERN stack will be more expensive than using a monolithic architecture and a PHP or Ruby on Rails stack. 

The development team and resources

The more experienced and qualified the development team, the more costly the project will be. For example, hiring a development team from the US or Europe will be more expensive than hiring a development team from India or Asia. As evident from the table and upon applying currency conversion, you can see there is a significant difference between hiring Indian developers over those living in the USA or Australia. Costs can rise 7-8 times when moving software development from India to either the USA or Australia, without any added benefits in terms of quality or speed of delivery.

Feature	India (INR)	USA (USD)	Australia (AUD)
MVP (Route optimization, driver app, tracking)	₹500,000 - ₹1,000,000	$75,000 - $150,000	A$100,000 - A$200,000
Advanced Features (AI-powered optimization, real-time traffic updates, multi-modal delivery)	₹1,000,000 - ₹2,000,000	$150,000 - $300,000	A$200,000 - A$400,000
Enterprise-Level Features (Scalability for large fleets, complex integrations, advanced analytics)	₹2,000,000+	$300,000+	A$400,000+

Based on these factors, the cost of building last-mile delivery software can range from $100,000 or more. However, this is only a rough estimate, and the actual cost may vary depending on the specific requirements and preferences of your project. 

Tips for saving money on last-mile delivery software development

Start with a MVP set of features and add more later as needed

By starting with a MVP, you can reduce the cost and time of development, test and refine your software, and add more features and functionalities later as needed based on the feedback and demand of your customers such as Advanced and Enterprise-grade features

Use a cloud-based solution

You can reduce the cost and hassle of managing and maintaining your own servers, hardware, and software. You can also benefit from the scalability, reliability, and security of the cloud.

Choose a development team with experience in building last-mile delivery software

A development team with experience in building last-mile delivery software can help you save money by providing you with the best practices, expertise, and tools for your project.

Choose cross-platform over native

You can save money by reducing the development time, effort, and resources. You can also benefit from the compatibility and interoperability of your software. For example, you can use Flutter, a framework that allows you to create native mobile, web, and desktop applications using Dart, a programming language that compiles to native code. 

Last mile delivery trends that are shaping the sector in 2023

Here are some significant trends in last mile delivery industry

Artificial Intelligence (AI)

AI can analyze data from various sources, such as traffic, weather, customer preferences, and delivery history, to optimize routes, predict demand, and allocate resources. AI can also help automate tasks, such as sorting, loading, and tracking packages, and provide real-time updates to customers and drivers.

Drones and Pick Up Drop Off (PUDO) deliveryso

Drones and PUDO delivery are alternative modes of delivery that can reduce congestion, emissions, and delivery costs. Drones are unmanned aerial vehicles that can fly over obstacles and deliver packages to remote or hard-to-reach areas. PUDO delivery is a system where customers can pick up or drop off their packages at designated locations, such as lockers, kiosks, or stores, instead of having them delivered to their homes. Both drones and PUDO delivery can offer faster, more convenient, and more flexible delivery options for customers and businesses.

Electric Vehicles (EVs)

EVs are vehicles that run on electricity instead of fossil fuels. EVs can help reduce the environmental impact of last mile delivery, as they emit less greenhouse gases and air pollutants. EVs can also help lower the operating costs of last mile delivery, as they have lower fuel and maintenance expenses. EVs are becoming more popular and affordable, as more manufacturers, governments, and consumers are investing in them.

White Glove Delivery Service

White glove delivery service is a premium service that offers more than just delivering a package. White glove delivery service can include unpacking, assembling, installing, testing, or demonstrating the product, as well as removing any packaging materials or old items. White glove delivery service can enhance the customer experience and satisfaction, as it provides convenience, personalization, and quality assurance. White glove delivery service can also increase the value and differentiation of the product and the brand.

Contactless Last-mile Delivery

A trend, that picked up during the COVID19 pandemic, is still going strong in some geographies and demographics to mitigate the risk associated with contagious diseases and especially around the populations of elderlies and infants that are more susceptible to infectious disease such as influenza.

Master Last Mile Delivery Challenges

Last mile delivery is the final and most crucial stage of the delivery process, where a package reaches the customer’s doorstep. However, it is also the most challenging and costly part of the logistics chain, as it involves meeting customer expectations, routes optimization software, reducing emissions, and managing resources.

Fortunately, last mile delivery system can help overcome these challenges by providing solutions. For example, NNT DIGITAL provides features such as last mile delivery tracking, route planning, analytics, proof of delivery, and customer alerts in its software.

By using our software, businesses can improve their last mile delivery performance, efficiency, and customer satisfaction, and gain a competitive edge in the e-commerce market. They can cope with the increasing demand and complexity of last mile delivery, as well as the changing customer preferences and behaviour.

We enable businesses to offer faster, cheaper, and more convenient delivery options, such as drones, PUDO, and white glove service, and to adapt to different scenarios and situations. Together, we can work together to reduce their environmental impact and comply with the regulations and standards of last mile delivery.