The following may help you to decide whether to use your own (in-house) delivery vehicle or use outside courier delivery services, such as a custom, immediate, or route delivery service. This analysis is based on monthly costs to operate a delivery vehicle. Also keep in mind:
The cost of a vehicle is not what you pay for it, but the total cost when you are finished using it. First, determine the cost of operating your own delivery vehicle:
- Vehicle cost (Lease or Purchase)
- Fuel cost (Gasoline or Diesel)
- Insurance (Commercial and Liability)
- Maintenance (Repairs and Upkeep)
Next, determine the employee cost to operate the delivery vehicle:
- Wages and Salaries (State and Federal income taxes, including FICA)
- Federal and State fees (Workers Compensation, Unemployment insurance, etc.)
- Employee benefits (Health, Life, Dental insurance, 401k, 403b, etc.)
- Fill-in replacement (Vacation, sick leave, etc.)
Then, determine how the delivery vehicle is to be utilized:
- On Demand, (deliver immediately)
- Daily Route (delivery once or twice a day)
- Weekly Delivery (deliver the same day each week)
After the total cost is determined, divide the number of deliveries per month by the total monthly cost of the service provided. This number will be the average cost per delivery of each delivery. If you also keep track of the mileage each month, you can easily determine the cost per mile to operate the vehicle. Knowing your cost per mile will help you compare your cost with local courier delivery services as many charge by the mile after a base charge.
Once you have the in-house cost to provide delivery services to your customer, contact a local courier delivery services company to compare rates to determine whether to keep your existing delivery in-house, or contract with your courier delivery services company. Delivery service companies are always looking for new clients and could help analyze your current delivery needs and quite possibly save you time and money in the process.
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