Financial

In a business where the clock never stops and every mile counts, last-mile carriers face the constant challenge of balancing customer expectations with controlling costs. “Thinking Outside the Box” interviewed Andrew Leone, CEO and co-founder of Dispatch, about profitability and cost control. The big takeaway was that the path to profitability starts with knowing your numbers and using technology to put those numbers into action.

Understanding Your Biggest Cost Drivers

Leone said there’s nothing mysterious about the biggest expenses in last-mile operations. Maintenance, fuel, and asset utilization still top the list. “Your largest overhead is how well you utilize your assets,” he explained. “The question is how many of your miles are truly productive?”

Deadhead miles—those driven without revenue—represent invisible profit loss. Measuring and minimizing them is one of the fastest routes to better margins. Equally important, Leone noted, is managing vehicle wear and tear, especially on fleets that regularly carry heavier loads. “If you’re hauling weight day after day, it adds up as a delayed expense in the long run,” he said. “Suspension, brakes, all of that adds up and sneaks up over time.”

Finding the Savings: Route Optimization and Bundling

The most immediate cost wins for many carriers come from route optimization and efficient bundling. “We see the most savings when jobs are bundled and routes are built around direction and density,” Leone said. “The goal is always to maximize the vehicle. It’s all about how much productive work you can get moving in the same direction.”

Allowing larger delivery windows can expand bundling opportunities, while strategic routing tools help minimize overlaps and improve per-mile efficiency. Leone emphasized that balancing optimization with service level is key. “You can have a full truck every day, but if you’re not meeting customer needs, you’ll lose that volume fast,” he pointed out.

Balancing Consumer Demand with Profitability

Leone talked about the balancing act between how full your truck is and how happy your customers are. “It’s a tightrope walk,” he said. “Every carrier struggles with maintaining on-time performance while keeping assets profitable. That’s the whole game.”

How Technology Changes the Game

Gone are the days when successful routing could rely solely on instinct. Leone acknowledged that seasoned dispatchers have a great gut feel but said that even the most experienced dispatcher can’t compete with real-time data platforms.

“In today’s world, you really can’t route effectively without technology,” he said. Dispatch’s platform uses AI and machine learning to analyze variables like GPS location, time windows, and current capacity to recommend more efficient assignments. “Maybe a job pays less,” Leone said, “But if it fits better per mile, you end the day more profitable.”

Premium Deliveries and Smart Pricing

Higher urgency means higher margins. Leone pointed out that certain sectors, like jobsite or industrial deliveries, command premium pricing because the cost of delay is so high. “If an HVAC crew is waiting at a jobsite, that downtime is costing them money,” he said. “They’ll gladly pay more to keep that site moving.”

The same holds for time-sensitive or emergency deliveries, such as airplane parts, manufacturing components, or other critical materials.  That’s where customers will pay to cut downtime. Leone advised carriers to balance these ad hoc, high-margin jobs with a steadier base of work, such as same-day routes, to build consistency and predictability throughout the year.

The Challenges of Scaling

Scaling up is one of the hardest challenges in our industry, especially during high-demand times like the holiday peak. Leone warned against overextending too quickly. “You need enough financial cushion to weather underutilized assets when entering new markets or ramping up hiring,” he said. Scaling too fast can erode your core business.”

Peak seasons amplify this risk. “It’s always a guessing game,” Leone admitted. “Volume might surge earlier or end sooner than expected. You can plan for a general window, but precision only comes with data.”

Leone encouraged carriers to rely on historical data, such as delivery counts, mileage, and seasonal patterns, to develop better forecasts. Today, AI tools make analysis easier for even small operators. “You don’t need a staff analyst anymore,” he said. “You can upload your delivery history using tools like ChatGPT or Gemini to get usable trends and forecasts.”

The Power of Data-Driven Decision-Making

For Leone, the ultimate competitive advantage lies in data discipline. “Every carrier should know how many of their miles are revenue-producing. They need to know when their usually slow months hit and where their inefficiencies are,” he said. Good record-keeping, whether through software or simple spreadsheets, builds a foundation for better decisions.

Dispatch’s platform, for example, continuously aggregates and analyzes carrier work requests, using AI to recommend additional revenue opportunities without compromising performance. “It looks at where you are, what’s nearby, and what can be added efficiently,” Leone explained. “That’s how you add throughput intelligently.”

Building Stability Year-Round

Finally, Leone reminded carriers that profit isn’t built in bursts.  It’s built in balance. “Instead of chasing every surge, look at how to smooth the year out,” he advised. “Fixed costs never go away. The best operators find steady contract work to cover the base and then layer in higher-margin, real-time loads on top.”

That consistency, Leone said, doesn’t just improve revenue.  It reduces stress. “When you have a solid foundation of predictable work, everything else—the premium jobs, the peaks, the surprises—becomes an opportunity, not a source of anxiety,” he advised.

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Want to know more about using technology to increase profitability? Learn more at www.dispatchit.com.