How to calculate the ROI of last-mile delivery software

When someone proposes delivery software, management asks how much it saves. The usual answer is kilometres and diesel: the easiest sum and the one that matters least.

In urban delivery, a day on the road is paid for mostly by the driver and the van (we ran the numbers in last-mile operating costs). The real money is in the hours of the people who keep the operation running, and in what it costs when everything depends on one of them.

This article doesn't promise a percentage. It gives you the questions and the formula to work it out with your own numbers.

Why ROI in kilometres falls short

Kilometres are easy to measure, so they take over the conversation. An operation planned by hand loses money elsewhere:

• The dispatcher who comes in at six to have the routes ready by eight.
• The office answering "where is my order?" all day long.
• The failed delivery that means going back, calling and redoing the plan.
• The week your planner is on holiday, which shows on every route.

None of this appears on the fuel bill. All of it appears in the P&L.

The four items that move ROI

1. Planning hours

Time a normal morning, from when the orders arrive until the last driver has their route on their phone.

The sum: minutes per day × operating days × hourly cost of whoever plans.

Example: 2 hours a day over 250 days is 500 hours a year. At €25 an hour, that's €12,500 just to build routes.

With a planner, most operations have their routes in under five minutes, and the time goes into reviewing instead of building. Check that figure in a trial with your real orders: we explain how in five tests before you sign.

2. Status call hours

Every "where's the driver?" takes a few minutes, plus the time whoever picks up needs to get back to what they were doing.

The sum: calls per day × minutes per call × operating days × hourly cost.

Example: 30 four-minute calls add up to 2 hours a day. Over a year, another 500 hours.

With live tracking and an automatic notice with the estimated time, customers already have the answer and stop calling. More in last-mile tracking.

3. Hours lost to failed deliveries

A failed delivery doesn't cost one stop. It costs going back, calling the customer, finding room in tomorrow's plan and, if there's a dispute, proving what happened.

The sum: incidents per month × minutes between driver and office × 12 × hourly cost.

Example: 120 incidents a month at 20 minutes each come to 40 hours a month and 480 a year.

Proof of delivery with photo, signature and time settles the dispute on the same call. And warning the customer in advance avoids some second attempts, as we explain in first-attempt delivery.

4. The day your planner is off

It's the item almost nobody counts. If the plan lives in one person's head, every holiday, sick day and handover is paid for in overtime, delays and calls.

The sum: days a year someone else plans × extra overtime and incident hours on those days, plus the weeks a new person needs to plan alone.

Example: between holidays and sick leave, someone else plans 30 days a year. Compare one of those days with a normal one and multiply by 30.

With the process inside a system, the plan comes out the same whoever is on shift. More in how to stop depending on key people.

The full calculation

Annual saving = hours recovered × hourly cost + cost of the days without your planner.

ROI = (annual saving minus annual software cost) divided by annual software cost.

With the examples above, the operation spends 1,480 hours a year on tasks a system does or avoids:

• Planning: 500 hours.
• Status calls: 500 hours.
• Failed deliveries: 480 hours.

At €25 an hour that's €37,000 a year, before counting the days without your planner. Not all of those hours disappear. The ones that do come from your trial, not from this article.

The software price is the only figure you don't have to estimate. Ask for it with your number of vehicles and put it into the formula.

The capacity you don't have to buy

One effect stays outside the formula and still matters: if each route fits more stops into the same shift, you grow without renting another van or hiring another driver. A van on the road costs the same whether it makes 40 deliveries or 80, as we saw in summer peaks without buying vans.

Where to start

Before you talk to any vendor, gather five figures from your operation:

1. The planning minutes of a normal morning.
2. The status calls of one week.
3. Last month's failed deliveries and the time each one took.
4. The days a year someone else plans.
5. The hourly cost of each role involved.

That's your before. The after comes from a trial with your real orders. If you want to run the numbers with us, book a demo and we'll build it with your data.