Wondering if owning and operating your own delivery fleet would be worth it for your small business? You’ll need to estimate the cost it would take to start and run your fleet, to see if you can afford it. Let’s find out what it takes to run your own delivery fleet. Then we’ll show you how easy it is to start servicing your deliveries through the DeliverEnd app.
Why Run Your Own Delivery Fleet?
Having your own delivery drivers gives you an avenue for spreading brand awareness and doing local advertising. Because you provide the vehicles, you’re able to apply custom wraps and signage that represent your company. This can improve brand loyalty and potentially generate new customers through effective vehicle advertising. But there’s another side of this to consider—drivers’ actions could have the opposite effect, should they run a stop sign or drive too fast in a slow speed zone.
A Breakdown of Fleet Ownership Costs
How do you measure the total cost of ownership—fleet management, maintenance, and technology development included? Here’s a breakdown of the different aspects that go into it.
Fleet Management Costs
Vehicle fleet management requires ongoing investments for the technology to automate driver management. When you run a fleet, it’s important to have a high degree of control over when and where your drivers are providing service, and that requires GPS tracking, software that secures payments and ensures cost transparency, and other technology overhead.
In addition to a tech crew, it may also require you to have a human resources department. Your human resources personnel will be in charge of hiring drivers and assisting them with training, benefits, payouts, and other employee-related concerns. Keep in mind this adds significantly to your labor cost. For small businesses not yet equipped with HR departments or large accounting teams; the time needed to invest, added paperwork, and logistics could become a major undertaking that they’re unable to deal with on their own.
Background Checks on Drivers
It may take more to screen drivers than it does other types of employees. Not only must you check criminal history, but also screen for driving record violations such as DUI convictions, speeding tickets, and traffic accidents, as well as non-moving violations. To reduce your risk and liability, it’s important to go for the most thorough background checks possible on new applicants to your fleet, which can be costly.
Regular background checks cost around $7 to $15 per employee. Requesting motor vehicle records is an additional cost of $3 to $10, making it a total of $10 to $25 per employee to run background screening. You’ll even need to hire extra drivers to make sure shifts are covered when employees are absent. You also have to ensure you’re hiring people qualified to drive all types of vehicles. And it’s important to know that drivers licensed and qualified to drive big-box trucks require higher pay than you might think and they expect employee benefits, such as paid sick days. Plus, you have to run an additional check on their Commercial Driver’s License (CDL).
Vehicle Fleet Maintenance and Storage Costs
To run your own fleet, you have to purchase all the vehicles that you’ll need to make deliveries, and this is a considerable expense, especially when you must obtain vehicles in different sizes to accommodate all types of deliveries. You also need the space to hold all these vehicles. If you have funding for the vehicles but don’t have the ground area for them, you’ll have to obtain parking space, unless you decide to let employees keep their vehicles at home for their personal and professional use, which could be a liability. Considering the size of delivery trucks that you’ll need to keep on hand, you’ll have to buy or rent parking space regardless.
Keeping your delivery vehicles fueled up with gas and in good working order is another ongoing overhead expense. Automobile insurance, or fleet insurance, if you have more than five vehicles, is a legal obligation that also adds overhead. Whenever a vehicle needs repairs or regular maintenance, it’s also on your tab.
Responding to Delivery Demands Without Managing a Fleet
The great news is that you don’t have to own and operate your own delivery fleet. Rather than wait for scheduled shipments, more companies are outsourcing to delivery services. Thanks to technological innovation, there are simple apps that service deliveries on demand. DeliverEnd is a home delivery app that services businesses for all their local delivery needs, no matter the size. All you have to do is sign up on the app and request the items for delivery—we’ll organize the logistics and ensure complete transparency.
Benefits of On-Demand Delivery Apps Like DeliverEnd
Whether your delivery service needs are seasonal or year-round, there are several advantages to outsourcing the logistics to a third party.
With the ease of using a mobile app to send out orders for delivery, you can use fleet management software as a consumer instead of its creator. This way, you get all the benefits of the technology without having to develop or maintain it.
When a third party handles the delivery service itself, all you have to do is pay for it. This is a far more cost-effective route than investing the money into building an in-house delivery fleet. If you operate seasonally or have periods of predictable high demand, you can easily take care of your customers without having to scout and onboard new hires or add more vehicles.
Less Risk and Liability
With your own fleet, all the risk is on you. But when you outsource delivery service, you also outsource the liability that goes along with it. This means less risk management to deal with and you reduce potential expenses, such as vehicle crashes, vehicle downtime, and other liabilities.
Verdict: Is Owning and Operating Your Own Fleet Worth It?
Before you decide on building your own delivery fleet, you have to figure out how much money you’re willing to spend and invest. Once you add up all the overhead costs for logistics and human resources, you might realize that opting for a third-party delivery service is a no-brainer. If you want to optimize your bottom line, leveraging a delivery app like DeliverEnd is the way to go.