The Delivery/Logistics industry is one of the fastest-growing in the United States. According to a recent study, there are 456,508 Courier & Local Delivery Services businesses in the US as of 2023, an increase of 4.3% from 2022. And the industry is expected to continue growing, especially as e-commerce continues to grow.
The bad news is that there are already some big legacy players (UPS, Fedex, etc), so it’s going to be extremely competitive between all the new companies entering the market competing for the rest of the market share not taken up by the giants.
The good news is that there is so much demand and opportunity (which continues to grow each year) that your business can still become incredibly successful.
The BETTER news…you have the power to lead your delivery/logistics company in a way that increases delivery speed, reliability, and customer experience. In other words, you can increase productivity, increase profit, and beat the competition (and not just with new AI & technology).
How can you do that?
By learning how to get 100% from all your employees…by sharpening your leadership skills.
On average, the biggest cost in a courier/delivery company is labor. The same ibis study states: “The highest costs for business in The Couriers & Local Delivery Services industry in the US as a percentage of revenue are Wages (29%), Purchases (7.8%), and Rent & Utilities (3.7%).”
Labor is your biggest investment, and it directly influences the success of your business. When customers are choosing courier companies, they make their decisions based on:
Reliability
Delivery speed
Customer services
Special services
Coverage
Cost and
Tracking system
The first three factors that determine if customers choose your company (and stay) are all influenced by the quality of your labor.
It’s on your employees to deliver the packages on schedule and without damage (reliability), they have to collect & deliver packages as quickly as they can (delivery speed), and they have to provide excellent service when dealing with customers- whether it's CSRs, sales reps, or couriers (customer services).
Many people in the industry think that success will come from implementing the best tech (it’ll certainly play a role), but your success is still very much determined by the performance of your employees.
And how you lead them directly impacts how well they perform.
Here are some of the ways investing in your leadership can help you win big in the booming delivery & logistics market:
1. Faster Deliveries, Better Customer Service
When you transform your leadership, you create a motivated, loyal & productive workforce who are determined to deliver more packages in excellent condition with great customer experiences. Much of the delivery process might be technologically optimized for quick delivery but there’s still the human element to it. Packages will only arrive as fast as the courier wants them to and the interaction with the customer still depends on the attitude & professionalism of the courier. But when you have a team that’s motivated & committed, they want to serve the customer as best as they can.
Good leadership also leads to more structure & accountability, so everyone knows what they do, when they need to do it, and how they need to do it.
Faster deliveries & great customer services leads to increased revenue & customer retention( without increasing % labor costs).
2. Decreased Employee Turnover, Reduced Recruitment & Training Costs
The logistics industry is a hub for everyone looking for a job. One side effect: many employees jump from one company to the next, to the point where that becomes accepted as an industry norm. But this definitely does not need to be the case. When people have great leaders and they enjoy their work environment, they not only give their best but they remain loyal. When your employees become loyal to you, this saves you from having to: deal with being short-staffed, constantly recruiting new people, lowering your hiring standards just to keep up with demand, and using time & resources to constantly train & onboard new employees. Plus, the longer employees stick around, the more responsibility they can take, the more productive they become, the better relationships they develop with customers, the more they can train new hires quickly & effectively, the less you have to micromanage. Productivity goes up, % costs come down.
3. Your Employees Will Be Your Biggest Raving Fans.
One of the best ways to get new customers and keep existing ones, is positive reviews from your employees. Sadly, many employees have nothing good to say about their employers and when your employees say bad things about you, no amount of marketing can counteract that. On the other hand, when your employees rave to everyone about how great the company is, people are so unaccustomed to hearing people who love their jobs, that it makes a real impression. (Note: It doesn't work if you instruct your employees to say nice things; it has to be sincere.) Great leaders turn employees into raving fans, and the employees turn customers into raving fans. And this is how a great brand & reputation is built.
4. Attract the Best Talent.
Points 2 and 3 above lead to this point. When your employees are loyal and they rave about you, you become the go-to company when new employees are looking to join the industry. And when you have a bigger pool of talent to choose from, you get to pick the best ones- the ones who align with the vision & values of the organization, and who have the potential to excel & grow within the company.
5. More Focus on Innovation, Strategy, Vision & Upper-Level Recruitment
When your labor force is performing well and you don’t have to spend your entire day putting out fires, you get to focus on growing the business. You can delegate more, empower your managers and employees, and focus on implementing strategies, optimizing operations, incorporating new tech, growing the leadership team, etc. But before reaching that stage, you have to first successfully lead your existing team- put the right structure in place by putting the right people in the right roles, making sure everyone knows what’s expected of them, creating a culture of productivity, accountability, speed & customer service, etc. If you try to scale before implementing these things, you will be growing the business on a shaky foundation, and the bigger it grows (without correcting that), the greater the risk of a big collapse.
6. Improve Employee Well-Being & Mental Health
Your leadership can make your employees happier, healthier & more successful, or it can make them more anxious, depressed & unproductive. That might sound extreme but peoples’ jobs have a significant influence on their mental health & well-being. According to a study:
A negative or toxic work environment will ultimately cause us to become disengaged and drained, even if it is work that we once loved to do…We may dread going into work, avoid peers or clients, and give up on projects or using high-level skills. Many of us will take that chronic stress home at the end of the day and will feel less engaged with our loved ones because we simply do not have the emotional or physical energy. Depression interferes with a person’s ability to complete physical job tasks about 20% of the time and reduces cognitive performance about 35% of the time. Some of the risk factors related to environment, management or workload include: dismissive managers; effort-reward imbalance; workplace politics; workplace gossip; workplace bullying; excessive workload; unclear or mismanaged roles at work…”
You have to create an environment where your employees can feel positive, engaged & productive (and that’s not even as challenging as it sounds). But it all starts with you as the leader. Taking your leadership to the next level will improve your employees’ well-being which will lead to better results at work (and in their personal lives).
7. Getting More Creativity And Innovation From Your Team
When your employees feel safe, confident & engaged, they start providing fresh perspectives, new ideas and novel solutions for improving the business. You get to consider a wider range of unique ideas and you don't feel the burden of having to come up with all the ideas to grow & improve the business. Great leaders elevate their employees to the point where it feels like you have partners who are just as committed to making the company successful.
8. Build More Meaningful Relationships
In addition to making tons of money, business is most enjoyable when you get to create experiences with good people. Great leaders know how to form quality relationships with their teams. This makes it more enjoyable to come to work everyday, makes it easier to cope with the stresses & pressures, and makes doing the work and managing your team not feel like a burden. Learn how to create a real team to make work more successful, enjoyable & memorable.
9. Sail Off Into The Sunset
After investing in your leadership, your business will no longer be a one-man show that is entirely dependent on you. You will have a fully functioning, efficient, effective, capable & confident team. You will have a team, culture & reputation that you are proud of, that people will admire you for, and that people will be desperate to learn from you how they can create the same. You can stop worrying about employees costing you customers; stop losing sleep thinking about how to reduce labor costs & grow the business. You will have more freedom for yourself (if you choose) and you can start preparing to sail off into the sunset because you will have a fully empowered team who can run & grow the business without your direct influence.
The Delivery/Logistics Industry is extremely competitive, but there’s more opportunity now than ever for you to grow your last mile delivery/logistics company & achieve incredible success. But only if you capitalize now and separate yourself from your competition.
One of the best, most sustainable (& most affordable) ways to do that is to get your leadership skills to the level where your employees perform at their best, stay longer and give your customers world class experiences that they keep coming back for.
Heath-Adams Leadership provides leadership coaching for CEOs of Last Mile Delivery/Logistics companies with less than 100 employees.