Last-mile Delivery Solutions to Boost E-commerce Efficiency [2025]

Think of last-mile delivery as the final, most crucial leg of a relay race. It’s the journey a package takes from a local warehouse to a customer’s doorstep—and it’s precisely at this stage that the entire customer experience is won or lost. For e-commerce brands in Singapore, getting this right is a core business strategy.

Understanding Last-Mile Delivery and Why It Matters

Last-mile delivery is the final step in the supply chain: moving a product from a distribution centre or fulfilment hub to the end customer. While it might be the shortest distance in a product’s journey, it’s often the most expensive and complex part of the entire logistics process.

This final stage is your brand’s direct, physical touchpoint with the customer. A delayed parcel, a damaged box, or poor communication from the driver can sour an otherwise perfect shopping experience. On the flip side, a fast, transparent, and seamless delivery builds trust and practically guarantees repeat business.

The Critical Impact on E-commerce Brands

For businesses managing high order volumes, especially on platforms like Shopee, Lazada, or TikTok Shop, a messy last-mile operation can quickly become a massive bottleneck. It hits several key areas of your business, and it hits them hard:

• Customer Loyalty: A positive delivery experience is a powerful driver of retention. When customers know they can rely on you for quick and predictable shipping, they are far more likely to click “buy” again.
• Brand Reputation: Online reviews and word-of-mouth are heavily influenced by the delivery experience. A single late delivery can lead to a one-star review that damages your brand’s public image for a long, long time.
• Operational Costs: The last mile can swallow over 50% of your total shipping costs. Failed delivery attempts, inefficient routes, and manual coordination all add up, eating directly into your profit margins.

Actionable Insight: Customers no longer separate the product from the delivery service. To them, a late package from a third-party courier is a failure on your brand’s part, making a rock-solid delivery solution non-negotiable.

The e-commerce boom in Singapore has only intensified this pressure. The local last-mile delivery market, valued at around $500 million in 2025, is set to surge at a compound annual growth rate of over 8% through 2033. This growth is fuelled by the country’s tech-savvy shoppers and the sheer dominance of B2C deliveries from major online marketplaces. You can read the full report on the Singapore last-mile delivery market to get the details.

Optimising this final step involves much more than just moving boxes; it’s about building a reliable and scalable system. Many businesses find that integrating their operations with robust warehousing and logistics services is the key to taming this complexity. Ultimately, mastering last-mile delivery is about keeping the promises you make to your customers.

Choosing Your Last-Mile Delivery Model

Picking the right last-mile delivery model is a strategic decision that directly impacts your costs, your customers’ happiness, and your ability to grow. There’s no single “best” answer here. The right approach for your business depends entirely on what you’re selling, your order volume, and the kind of brand experience you want to create.

Think of it this way: your delivery is often the only physical touchpoint you have with your customer. Getting it right is non-negotiable for building a solid reputation and earning repeat business.

As you can see, a smooth delivery experience is a straight line to five-star reviews and loyal customers who keep coming back for more.

So, let’s break down the main ways you can get your products into your customers’ hands in Singapore.

The In-House Fleet Model

Running your own delivery fleet means you’re in the driver’s seat—literally. You buy or lease the vehicles, hire the drivers, and manage every single logistical detail from your warehouse to the customer’s doorstep. This model gives you the ultimate control over the customer experience.

• Practical Example: A premium furniture brand might choose an in-house team to make sure their delivery staff are expertly trained in handling delicate items and even basic assembly, reinforcing that high-end brand image. The catch? The upfront investment in vans, insurance, and staff is huge, and it’s a real headache to scale up for massive sales events like 11.11.

Outsourcing to Third-Party Logistics (3PL)

For many e-commerce stores, partnering with a third-party logistics (3PL) provider is the way to go. These are the specialists. They live and breathe fulfilment and delivery, and they already have the established networks that would take you years and a small fortune to build yourself.

• Practical Example: A fast-growing fashion brand on Shopify can tap into a 3PL’s infrastructure for picking, packing, and shipping. Instead of sinking cash into a warehouse and a fleet of vans, they get scalability and cost-efficiency because they only pay for the services they use. The main trade-off is giving up some direct control over that final, crucial delivery moment.

Actionable Insight: By outsourcing, you turn a hefty fixed cost (like running a fleet) into a flexible variable cost that moves up and down with your sales volume. That frees up precious capital you can pour back into marketing and developing new products.

If you’re exploring this path, it’s worth taking a moment to explore the differences between 3PL and 4PL providers (https://www.getonecart.com/3-pl-vs-4-pl/) to figure out just how much of your operations you’re comfortable handing over.

Leveraging Crowdsourced Delivery Services

Think GrabExpress or Lalamove. Crowdsourced, or on-demand, services use a network of independent couriers who pick up and deliver orders, usually coordinated through an app. This model is all about speed and flexibility. It’s tailor-made for businesses that need to offer same-day or even one-hour delivery.

• Practical Example: A local bakery can use a crowdsourced service to get fresh cakes to customers across the island without the expense of a full-time driver.

The main downside is that service quality can be a bit of a mixed bag, since the couriers aren’t your employees. The cost per delivery can also be higher, making it less economical for businesses that ship a large, steady volume of orders every day.

The Hybrid Delivery Approach

Why choose just one? A hybrid model lets you mix and match the strategies above, creating a system that balances cost, control, and speed. It’s about using the right tool for the right job.

• Practical Example: A retailer might use its own in-house team for standard deliveries within a core downtown area, where they want to maintain that personal brand touch. But for urgent, same-day requests or for deliveries to further-flung areas like Jurong or Pasir Ris, they could rely on a crowdsourced service to handle the overflow. This blended approach gives you a robust and adaptable framework, letting you meet all sorts of customer expectations without being locked into a single, rigid system.

Comparison of Last-Mile Delivery Models

To help you decide, we’ve put together a quick comparison table. Think about your business’s top priorities—is it total brand control, low startup costs, or the ability to scale on a dime? Your answer will point you toward the right model.

Ultimately, the best last-mile delivery model is the one that aligns with your budget, your brand, and most importantly, your customers’ expectations. As your business evolves, don’t be afraid to revisit this decision and adapt your strategy.

The Technology Driving Modern Delivery

Behind every smooth, on-time delivery, there’s a powerful stack of technology working tirelessly in the background. These last-mile delivery solutions are what turn a logistical nightmare into a real competitive advantage. They create the kind of efficiency and transparency that today’s customers don’t just want—they expect.

Think of it this way: technology is the central nervous system for your entire delivery operation. It automates the tough decisions, tracks every single movement, and keeps everyone—from your warehouse team to the end customer—in the loop. It ensures every package gets from A to B in the smartest way possible.

Let’s break down the core technologies that are making all this happen.

Route Optimisation Software

Imagine you have 10 drivers who need to deliver 200 parcels across the island. How do you figure out who goes where and in what order? Attempting this manually is a recipe for disaster—wasted fuel, wasted time, and unhappy drivers stuck in traffic.

Route optimisation software is a powerful tool for your entire fleet. It uses clever algorithms to calculate the most efficient route for every single driver, and it does this by considering a whole host of variables:

• Real-time traffic patterns and unexpected road closures
• Vehicle capacity and specific delivery time windows
• Driver work hours and mandatory breaks

By crunching all this data in mere seconds, the software generates multi-stop routes that slash driving time and fuel costs. This means your team can handle more deliveries each day, without the headache.

Real-Time GPS Tracking

Once your drivers hit the road, visibility is everything. Real-time GPS tracking gives you a bird’s-eye view of your entire operation. You know exactly where each driver is, how fast they’re going, and whether they’re running on schedule.

This provides proactive control. If a driver gets delayed, you can immediately notify the customer, manage their expectations, and maybe even re-route another nearby driver to help out. This level of transparency can turn a potential customer complaint into a moment where you show off your excellent service.

This is especially critical in a market like Singapore. Studies have found that delivery challenges can affect up to 75% of customers. However, the country’s solid logistics infrastructure, powered by tech like predictive ETAs, helps manage these issues far more effectively. For agencies managing client catalogues, platforms like OneCart use an ERP API to connect with last-mile hubs, which helps cut costs and speed up ROI.

Electronic Proof of Delivery (ePOD)

The days of scribbled signatures on paper dockets are well and truly over. Electronic Proof of Delivery (ePOD) is the digital way to confirm a package has been successfully delivered. Using a simple mobile app, drivers can capture:

• A digital signature from the recipient
• A photo of the parcel left at the doorstep
• Quick notes about the delivery location or any issues

Actionable Insight: This digital record is instantly uploaded to your main system, giving you undeniable proof that the delivery was completed. It helps resolve customer disputes in a flash, cuts down on admin work, and provides a clear audit trail for every single order.

The future of last-mile delivery is also being shaped by some truly next-level advancements, like the growing use of AI and quantum technology in drones.

Integrated Delivery Management Platforms

The real magic happens when all these tools are connected within a single delivery management platform. This central dashboard brings everything together: route optimisation, real-time tracking, ePOD, and customer communications.

• Practical Example: An order is placed on your Shopify store. Your delivery management platform automatically pulls in the details, assigns the job to the best driver, and maps out the most efficient route. As soon as the driver completes the delivery and captures the ePOD, the system automatically fires off a confirmation email or SMS to the customer.

This kind of seamless integration, particularly with multi-channel systems like OneCart, gets rid of manual data entry, reduces the chance of human error, and keeps your customers in the loop from start to finish. It’s how you build a delivery operation that’s not just efficient but also builds trust with every single package you send out.

Measuring Success and Managing Delivery Costs

Just getting packages out the door isn’t enough to call your last-mile delivery a success. To really know if your strategy is working—and not quietly costing you a fortune—you need to measure what actually matters. This means digging into a few key performance indicators (KPIs) that tell you the real story about your operations and where you can tighten up the budget.

Think about it: without clear metrics, you’re flying blind. You might feel like deliveries are running smoothly, but you won’t know for sure if you’re burning cash on inefficient routes, losing money on failed delivery attempts, or simply taking too long to get orders into your customers’ hands. Tracking the right data brings everything into focus, allowing you to make smart, cost-saving decisions.

Essential Last-Mile Delivery KPIs

To get a clear picture of your performance, you don’t need dozens of complicated reports. Start by focusing on a few critical metrics that give you direct insight into your efficiency, costs, and customer happiness.

• On-Time Delivery (OTD) Rate: This is the big one. It’s the percentage of your total orders that actually arrive within the delivery window you promised. A high OTD rate is a direct measure of your reliability and a massive factor in keeping customers happy and coming back for more.

• Cost Per Delivery (CPD): This metric tells you exactly what it costs, on average, to get a single package to its destination. To figure it out, just divide your total delivery costs (think fuel, driver wages, vehicle maintenance) by the number of successful deliveries you’ve made. Keeping a close eye on your CPD helps you spot rising costs before they become a major problem.

• Order Accuracy Rate: How often are you delivering the right items, to the right person, at the right address, with zero mistakes? That’s what your order accuracy rate measures. A low rate means you’re dealing with expensive returns and damaging your brand’s reputation, making it a crucial KPI to watch.

Of course, these metrics are just the start. For a more complete picture of your operations, it’s worth understanding the top e-commerce metrics and KPIs to track for business success, as this will give you a much broader context.

Identifying and Controlling Key Cost Drivers

It’s no secret that the last mile is the most expensive part of the entire shipping journey. In fact, it often chews up over 50% of your total shipping budget. Getting a handle on these costs is absolutely vital for your profitability. The good news is that the main culprits driving up your expenses are usually predictable—and manageable.

Let’s break down the main cost drivers you need to get under control.

1. Fuel and Vehicle Maintenance: Fuel is a huge, fluctuating expense. Every kilometre driven on an inefficient route is money straight out of your pocket. On top of that, neglecting regular vehicle maintenance is just asking for a costly breakdown, which leads to downtime and even more expenses.

2. Labour Costs: This bucket includes your drivers’ wages, benefits, and any overtime pay. Poor scheduling or messy routes mean you’re paying drivers to sit in traffic or backtrack across town. That wasted time directly inflates what you spend on labour for every single delivery.

3. Failed Delivery Attempts: Every single time a driver shows up and can’t complete the delivery, it costs you. You’ve paid for the driver’s time, the fuel to get there, and now you have to pay someone to reschedule it all over again. Cutting down on your first-attempt failures is one of the fastest ways to slash your delivery costs.

Actionable Insight: A single failed delivery attempt can increase the cost of that specific order by 100% or more. The package has to be returned to the warehouse, re-processed, and sent out again, doubling the logistical effort for zero additional revenue.

To get a grip on these expenses, you need actionable insights, not just raw data. Using route optimisation software can dramatically cut down on fuel consumption and drive time. A simple change, like sending customers precise delivery windows and real-time tracking alerts, ensures they’re home to receive their parcels, which helps massively reduce failed attempts.

By actively monitoring these cost drivers and using technology to work smarter, you can protect your margins and build a much more sustainable delivery operation.

How to Implement the Right Delivery Solution

Alright, so you understand the different delivery models out there. Now comes the hard part: picking the right partner and actually getting them set up. This is where your strategy meets the real world, and making the right choice here will directly impact how happy your customers are and how smoothly your operations run.

You can’t just pick the cheapest option and hope for the best. A smart, methodical approach is needed to find a provider that truly fits your business and lives up to your brand’s promises. It all starts by asking the right questions.

Building Your Vendor Selection Checklist

Before you even think about getting on the phone with potential delivery partners, you need to create a checklist. Think of this as your list of non-negotiables. It’s a simple but powerful tool that ensures you’re judging every provider by the same yardstick, making the final decision a whole lot clearer.

Here are the absolute essentials for your checklist:

• Delivery Speed Options: Can they match what your customers want? This isn’t just about reliable next-day service, which should be standard. You need to know if they can handle same-day or even urgent two-hour deliveries when you need it.
• Service Area Coverage: Does their network actually reach all of your customers? Don’t just take their word for it; ask for a detailed map of their coverage zones, especially if you deliver to areas outside central Singapore.
• Technology and Integration: How well does their system play with yours? A provider’s ability to seamlessly plug into your existing order management system, like OneCart, is what separates a true partner from just another courier.
• Pricing and Transparency: Is the pricing structure crystal clear? You’re looking for someone who gives you a straight-up breakdown of costs, with no nasty surprises like hidden fuel surcharges or failed delivery fees.

Actionable Insight: One of the biggest mistakes we see businesses make is choosing a partner based purely on the lowest cost per parcel. A “cheaper” service that comes with spotty tracking, constant delays, and a clunky system will end up costing you a fortune in lost customers and wasted staff hours.

To help you get organised, here’s a table you can use to structure your evaluation process. It turns a messy decision into a clear, side-by-side comparison.

Vendor Selection Checklist

Once you’ve gone through this checklist with a few potential partners, you’ll have a much clearer picture of who the front-runners are.

Taking Actionable Steps for a Smart Decision

With your checklist in hand, it’s time to engage with potential vendors and see who can actually walk the talk. This is where you move beyond the polished sales pitch and find out what they’re really made of.

A crucial first step is to request case studies that are directly relevant to your industry. If you sell large, bulky furniture, a case study about a fashion accessories brand won’t tell you much. You need to see proof that they’ve successfully tackled challenges just like yours.

For merchants considering more eco-friendly options, it’s worth exploring guides on leveraging electric bicycles for delivery success to see if that model fits.

And here’s the most important tip: never sign a long-term contract without running a small pilot programme first. Give a small percentage of your daily orders to the new provider for a couple of weeks. This trial run is your best chance to see how they perform in the real world—from their reliability and driver conduct to the accuracy of their tracking system.

Focusing on Seamless System Integration

The single most critical part of setting up a new delivery partner is the technical integration. A smooth handshake between their software and your e-commerce platform is what makes the entire operation click. Without it, you’re just signing your team up for more manual data entry.

The goal is total automation, where orders flow from your store to their drivers without anyone needing to lift a finger. A proper integration should let your system:

1. Automatically Print Shipping Labels: As soon as an order is confirmed, the right shipping label should be generated instantly. No more copying and pasting addresses and praying you didn’t make a typo.
2. Schedule Pickups Seamlessly: The system should automatically book a pickup slot with the courier the moment a batch of orders is packed and ready to go.
3. Sync Tracking Data in Real Time: Tracking updates should flow back into your system and get pushed to the customer automatically. This proactive communication slashes the number of “Where is my order?” calls and emails you have to deal with.

This deep level of integration is what turns a simple courier into a powerful extension of your own team. It frees up hundreds of hours, prevents expensive manual errors, and gives your customers the professional, seamless experience they expect.

Practical Strategies to Get Your Operations in Order

Improving your last-mile delivery is about applying a handful of smart, practical tactics that make your whole process smoother, cheaper, and way more customer-friendly. These are the strategies that build a solid operation, keeping customers happy and protecting your bottom line.

The idea is to tackle the usual friction points head-on. By zeroing in on packaging, communication, and delivery flexibility, you can get to the root causes of high costs and unhappy customers.

Offer a Mix of Flexible Delivery Options

One of the most powerful things you can do is boost your first-attempt delivery success rate. Think about it: a failed delivery is a massive waste of time and money. It instantly doubles your fuel and labour costs for that single order. The best way to prevent this? Give your customers more control.

Bring in flexible last-mile delivery solutions that actually fit into your customers’ lives:

• Parcel Lockers: Team up with locker networks like Singapore’s Pick Network. Customers can grab their parcels 24/7 from a spot that’s convenient for them, which basically guarantees a successful first delivery.
• Click-and-Collect Points: Let people pick up their orders from your physical store or a partner’s location. This is a fantastic option for anyone who lives or works near one of your collection points.

These alternatives slash the odds of a driver showing up to an empty house. It’s a simple shift in strategy that saves you cash and gives customers a welcome sense of control.

Master Proactive Customer Communication

That feeling of “Where is my package?” is a huge source of frustration for customers and a major reason they flood your support lines with queries. Keeping them in the loop is a core operational tactic that frees up your team’s time.

Set up automated notifications that go out at key delivery milestones. This means sending an SMS or email when:

• The order has left the warehouse.
• The package is officially out for delivery, along with an estimated arrival window.
• The delivery has been successfully completed.

Actionable Insight: Proactive communication changes the entire customer experience. Instead of passively waiting, they become active participants. When customers know what to expect and when, they’re far more likely to be home, which feeds directly back into a higher first-attempt success rate.

Optimise Your Packaging to Cut Costs

Here’s something many businesses overlook: shipping carriers often charge by dimensional weight (DIM weight). This calculation is based on a package’s size, not just what it actually weighs. Shipping a small, light item in a big box can cost you a fortune because you’re paying for the space it takes up in the van, not its weight.

To fix this, do a packaging audit. The goal is to match your box sizes as closely as possible to the products inside.

• Practical Example: A cosmetics brand might discover it can use smaller mailer boxes for 70% of its orders, immediately cutting shipping costs for all those parcels.

This takes a bit of upfront analysis, but it pays off with every single package you ship. By using right-sized packaging, you don’t just lower your shipping bills—you also cut down on waste, which is a great bonus for your environmentally-conscious customers.

Got Questions? We’ve Got Answers

Diving into last-mile delivery can feel a bit overwhelming, especially when you’re busy scaling your e-commerce business. Here are some straightforward answers to the questions we hear most often from fellow merchants in Singapore.

What’s the Toughest Part of Last-Mile Delivery?

Honestly? It’s the constant tug-of-war between keeping costs down and keeping customers happy.

The final stretch of the delivery journey eats up over 50% of the total shipping expense. This is where costs like fuel, manpower, and especially failed deliveries really add up. At the same time, shoppers expect their orders to arrive quickly, for free, and with perfect tracking. It’s a tricky balancing act.

A simple place to start is by boosting your first-attempt delivery rate. Giving customers flexible options like parcel lockers or click-and-collect points makes a huge difference. A successful first drop-off directly cuts your operational costs for that order.

How Can I Actually Lower My Last-Mile Costs?

Improving your first-attempt success rate is a great start, but your biggest lever is route optimisation. Using software to map out the smartest delivery routes for your drivers is a game-changer. It immediately cuts down on fuel and the time your team spends on the road.

Another practical tip is to take a hard look at your packaging. Many couriers use dimensional weight for pricing, which means a big, light box can cost you more than a small, heavy one. Simply switching to right-sized packaging can shave a significant amount off your shipping fees for every parcel you send.

Actionable Insight: You don’t always need to switch providers to cut costs. Start by fixing internal processes like route planning and packaging. These are often the quickest wins for your bottom line and make your whole operation run smoother.

What’s the Must-Have Tech for Modern Delivery?

If you want to compete, you really need a system that handles three core functions, no exceptions:

• Route Optimisation: To make sure your drivers are always on the most efficient path.
• Real-Time Tracking: This gives both your team and your customers total visibility, which builds trust.
• Electronic Proof of Delivery (ePOD): To instantly confirm successful deliveries and shut down any disputes before they even start.

These three tools are the backbone of any solid last-mile delivery setup. They provide the efficiency and transparency you need to keep customers happy and stay ahead of the curve.

Ready to centralise your operations and master your fulfilment? OneCart syncs all your orders from Shopee, Lazada, and TikTok Shop into one dashboard, helping you process orders faster and eliminate errors. Discover how you can scale your business at https://www.getonecart.com.