With only a few drivers, it’s easy enough to coordinate deliveries manually. A dispatcher gets an order, studies the drivers’ current location, calls who is the closest, and assigns them the delivery. This approach usually works until the number of orders grows significantly.
Suddenly, the dispatcher is overwhelmed with requests, drivers complain that they have no orders, customers ask why their deliveries are late, and minor issues balloon into expensive problems.
This is when businesses start thinking about automated dispatch and solutions like a delivery tracking app appear on the radar. But is automation really worth the money? Compared to the subtle costs of manual coordination, auto allocation may prove to be much more lucrative for growing fleets.
What Does Manual Dispatch Really Cost?
Compared to automated approaches, manual coordination has one major advantage – it rarely requires expensive software. However, time is the currency spent by businesses using this strategy.
A dispatcher has to sort incoming orders, think about who will be able to deliver the products, contact drivers, keep track of deliveries, and update the customers. For small fleets, this may take only a few minutes per delivery.
Still, businesses with a higher volume of deliveries soon realize that time spent on manual coordination equals thousands of minutes wasted on administrative tasks. For a fleet that makes 100 deliveries a day, 3 minutes spent on a single delivery mean 5 working hours spent on coordination every day.
Moreover, businesses tend to underestimate the number of expenses that are indirectly related to manual dispatch. For instance, it is easy to miss a delivery due to an incorrect assignment, make drivers take a detour, add extra phone calls, burn out couriers, increase gas expenses, and waste precious resources on customer support.
The hardest part is that most of these costs are not directly visible – they appear as reduced productivity, increased expenses, and dissatisfied customers.
How Do Things Change With Auto Allocation?
The simplest definition of auto allocation is automated assignment of deliveries based on specific rules. The rules are set by a dispatcher, who chooses which courier gets which order based on their location, current workload, delivery priority, and other relevant factors. A delivery tracking app can be used to organize and visualize the process in an easy-to-follow dashboard.
When used to full extent, such software significantly reduces the time and effort needed for delivery coordination. Compared to human coordination, auto allocation becomes much more lucrative for growing delivery businesses, as it allows to minimize the workload of dispatchers while maximizing their productivity.
Essentially, it removes routine from the delivery management process. Now, when a dispatcher no longer has to manually assign thousands of deliveries, most of their time can be spent on actual business needs like coordinating exceptional cases.
Time and Money: Comparing Wasting Resources
The largest difference between auto allocation and manual dispatch is reflected in labor costs. A business owner has to consider not only the salary of a dispatcher who coordinates deliveries but also extra hours spent on coordination.
If a company grows to the point when one person can no longer keep track of all deliveries, the business has to hire more dispatchers or make the existing ones work overtime. When comparing different approaches, the former option is usually much more expensive than optimizing delivery processes and reducing the demand for extra workers. Even a single dispatcher can handle significantly more deliveries when manual assignment is substituted with automated one.
It is impossible to ignore the impact of automation on fuel costs as well. When couriers are assigned deliveries manually, there is nothing preventing two drivers from taking the same order by mistake or making a driver take a significantly longer route just because there were no other options.
On the other hand, route-aware auto allocation can reduce the distance of each delivery by taking into account the current location of drivers and the most optimal delivery routes. For growing fleets, even a small decrease in mileage equals significant savings on fuel and maintenance.
Less Hassle, Fewer Mistakes
Manual allocation always comes with the risk of human error. When a dispatcher is stressed out by a large workload, it becomes much harder to keep track of every delivery and make sure that nothing is missed.
It is not uncommon to see instances of double assignment (when two couriers get the same delivery), drivers complaining that they have no deliveries, or regular customers being ignored by the company. Automation prevents most of these issues by eliminating guesswork and ensuring that every delivery is assigned following specific rules.
A delivery tracking app for small business is particularly useful in such scenarios, as it allows to reduce the burden on one person tasked with managing all deliveries. When coordination is fully automated, the same person can focus on customer support and exceptional cases instead of getting distracted by thousands of routine deliveries.
The True Cost of Delivery Delays
Most business owners forget that late deliveries come with a price. Customers that wait for their orders to arrive eventually stop buying from a company, especially if such situations become frequent. Not only that, but poor performance can lead to negative customer reviews damaging the reputation of a business.
When orders are managed manually, late deliveries are inevitable. A traffic jam, a call from a customer canceling or rescheduling an order, or a driver requesting an update to their delivery address can disrupt the entire coordination process.
When automated dispatch is used to monitor deliveries in real time, such issues can be resolved much faster. This prevents delays, minimizes disruption, and reduces the risk of customers having to wait for their orders.
When Does Auto Allocation Make Financial Sense?
There is no hard and fast rule as to when it becomes profitable to automate delivery coordination. In many ways, it depends on the size of a fleet and the number of deliveries managed by a single dispatcher. If a delivery business only has 5 drivers and a small number of deliveries, it makes little sense to invest in automated coordination.
However, as soon as order volume grows and the time spent on delivery management starts to resemble an unacceptable amount of time wasted on administration, it is time to think about switching to auto allocation. It is necessary to carefully analyze what costs would be eliminated by automation (additional dispatchers, overtime pay, poor organization) and compare them to the cost of software.
Here are a few examples of situations when automation is a financially viable option:
• Delivery volume is growing rapidly and threatening to overwhelm the existing dispatch team.
• Drivers are constantly changing due to high turnover rates.
• The company works in multiple areas and manages deliveries in more than one region.
• Fuel costs are rising steadily over time.
• Dispatchers are spending excessive time on coordination and lack time to handle urgent matters.
• Customers are complaining about late deliveries and poor delivery performance.
• It becomes hard to keep track of drivers and their activities.
• The business plans to grow and scale its delivery operations.
Ultimately, auto allocation is only worth the investment when businesses grow to the point when additional orders bring in significantly more revenue than the cost of employing additional dispatchers or automating delivery coordination.
The Perfect Combination: Humans and Software
It is important to understand that the goal of automation is not to replace dispatchers but rather to reduce the burden on them. While the former can handle exceptional cases, manage communication with customers and drivers, and make complex decisions, a delivery tracking app can take over routine, time-consuming tasks like tracking deliveries or coordinating day-to-day operations.
This way, drivers, dispatchers, and customers benefit from the combination of human intelligence and smart algorithms.
Summary
Manual coordination works well for small operations, but as soon as a delivery business grows and the number of orders increases, the costs of such approach become prohibitively expensive. Auto allocation is a much more lucrative alternative, as it dramatically reduces the time and effort needed for delivery coordination.
In other words, not only does it allow to keep track of more deliveries without adding overhead, but it also reduces the likelihood of errors. As far as growing delivery companies are concerned, such software is always a welcome addition, as it allows to keep things organized without having to spend too much time and effort on coordination.
That is why a delivery tracking app for small business can become an extremely valuable asset for companies that want to scale their operations.
