What Are the Most Important KPIs in Last-Mile Delivery?

Managing last-mile logistics without appropriate Key Performance Indicators (KPIs) leads to increased costs and decreased operational efficiency. For e-commerce managers, monitoring both delivery costs and time is particularly crucial to maintain profitability and competitiveness. Below, we discuss the most important KPIs impacting the operational efficiency of companies.

Analyze First-Attempt Delivery Rate (FADR) to Improve Delivery Success

The First-Attempt Delivery Rate indicates the percentage of parcels successfully delivered on the courier’s very first visit to the customer. Every failed delivery attempt entails significant operational costs. This includes not only additional expenses for fuel and courier working hours but also a higher risk of goods getting damaged during return transport and, what is often overlooked, a drop in customer satisfaction.

How to optimize FADR?

• Dynamic time windows – informing the customer about the precise arrival time of the courier.
• In-flight redirects – allowing the customer to change the delivery address or redirect the parcel to a neighbor in real-time.
• Expanding PUDO points and parcel lockers – shifting the delivery volume to collection points (e.g., parcel lockers, convenience stores) drastically increases FADR by eliminating the issue of the recipient not being home.

Measure Cost per Delivery to See the Real Cost of Every Parcel

Although the Cost per Delivery metric seems simple to calculate, many managers make the mistake of only considering the courier rate on the invoice.

The full delivery cost includes:

• Direct costs – transport fees, fuel, courier remuneration,
• Technology costs – maintaining TMS (Transport Management System) systems, track & trace solutions, and SMS notifications,
• Customer service costs – time spent handling “Where is my parcel?” inquiries,
• Error costs – handling complaints and returns related to delivery errors.

By analyzing the cost at the single-parcel level, you can identify regions, routes, or logistics partners that generate losses. Increasingly more companies are opting for a “dynamic pricing” model, where the delivery cost for the end customer depends on the actual logistics load at a given moment.

Optimize Order-to-Courier Handover Time to Shorten Order Fulfillment

In the era of intense competition for delivery speed, a key indicator of an organization’s internal efficiency is the Order-to-Courier Handover Time. This is the time that elapses from the moment a customer clicks “Buy and pay” until the courier scans the label while picking up the parcel from the warehouse.

Many entrepreneurs focus on optimizing the courier’s route itself, neglecting the fact that a parcel might “wait” in the warehouse for 12 or 24 hours.

What makes up the Order-to-Courier Handover Time metric?

• Order processing time – verifying payments and inventory levels.
• Picking & Packing – physically assembling and packing the goods.
• Documentation generation – automating the creation of waybills.

Reducing this metric by just 2 hours can result in the parcel catching an earlier courier route, which in turn reduces the delivery time to the customer by a full business day.

Monitor On-Time Delivery (OTD) as the Foundation of Trust

On-Time Delivery is a metric that defines the percentage of parcels delivered within the declared timeframe. It has a direct impact on your store’s NPS (Net Promoter Score).

The modern customer can forgive a lot, but failing to keep a time promise is unfortunately not one of them. So, if you promise delivery in 24 hours and the parcel arrives after 48 hours, the cost of losing customer loyalty can significantly exceed the profit from the transaction.

Other Last-Mile Delivery KPIs

First-Time Fix Rate (FTFR)

This metric shows how many parcels were delivered the first time without the need for a repeat intervention. Paying attention to this indicator helps reduce operational costs and improve customer satisfaction. A low FTFR indicates the need to improve delivery processes, routes, or communication with customers.

Delivery Window Compliance (DWC)

This metric measures how often a delivery is completed within a specified time window (e.g., between 9:00 AM and 2:00 PM). It is an important indicator in the context of customer expectations regarding delivery flexibility and precision. If a company fails to meet the time window, it can lead to a loss of customer trust.

Package Damage Rate (PDR)

Measures the percentage of parcels that were damaged during transport or delivery. This is a crucial metric that impacts costs related to complaints, returns, and customer service. Monitoring and minimizing this indicator is of paramount importance in building a positive customer experience.

Delivery Customer Satisfaction Score (CSAT)

This is a metric that evaluates customer satisfaction with the delivery process, often collected through short surveys after a parcel has been delivered. A high CSAT score indicates high-quality logistics services, while a low one may suggest delivery execution problems that need to be addressed immediately.

Reverse Logistics Efficiency

This is an indicator concerning the efficiency of return processes, which is becoming increasingly important in last-mile logistics, especially in e-commerce. It determines the time and cost associated with handling returns. Optimizing the returns process not only improves costs but also the satisfaction of customers who often expect a hassle-free return process.

Delivery Time Variability

This metric measures the fluctuation in delivery times. If the delivery time varies significantly (e.g., one day delivery takes 3 hours, and another day it takes 12 hours), it can lead to customer dissatisfaction. Minimizing variability in delivery time is key to improving service quality.

Cost-to-Serve (CTS)

This metric determines the cost a company incurs to deliver each order, taking into account all costs related to warehousing, transport, customer service, returns, etc. Monitoring CTS allows for the identification of inefficiencies in the supply chain and cost optimization.

Order Accuracy Rate (OAR)

Measures the percentage of orders delivered without errors (e.g., wrong quantity, incorrect product). This is a metric that directly impacts costs associated with complaints and returns, but also the level of customer satisfaction.

Introduce Data Analytics to Your Logistics Processes

Effective management of the above metrics requires advanced analytical tools. Data from various sources (such as WMS warehouse systems, e-commerce platforms, courier APIs) must be collected in one place to enable drawing valuable conclusions.

A data-driven approach allows you to:

• forecast sales peaks (e.g., before Black Friday),
• automatically select the cheapest or most efficient carrier for a given region,
• detect anomalies (e.g., a sudden increase in the number of damaged parcels from a specific courier).

Alsendo – Your Partner in Last-Mile KPI Optimization

Alsendo offers solutions that enable the creation of custom integrations and dedicated logistics management panels that can be tailored to the specifics of a given business. Thanks to this, e-commerce companies can build their own flexible systems to manage multiple carriers in one place, automate courier selection based on KPIs, and aggregate data from various sources in real-time. Such an approach not only simplifies operations but, above all, allows you to react faster to changes and optimize last-mile processes more effectively.

FAQ – Frequently Asked Questions

What is the most important last-mile KPI?

For profitability – Cost per Delivery. For customer satisfaction – On-Time Delivery (OTD).

How to reduce the cost of a failed delivery?

Through customer education, the use of precise notifications, and promoting deliveries to PUDO (Pick-Up Drop-Off) points and parcel lockers.

Is it worth monitoring the carbon footprint as a KPI?

Definitely yes. In 2026, ESG reporting is becoming standard, and route optimization for CO2 emissions goes hand in hand with fuel and cost savings.

Rafał Urbanek