Toll costs are much easier to manage for long-haul fleets with predictable routes compared to last-mile delivery operations that are constantly changing. There are many factors that can make it challenging to keep up with toll management for last-mile delivery fleets, such as the high stop density and daily route changes. Without the right system, these ever-changing conditions will start cutting into your profit margins.
Why Last-Mile Delivery Fleet Toll Costs Are More Expensive Than You Think
When last-mile vehicles are on the road, they are crossing toll points more frequently than fleets that are primarily staying on the major highways. If your fleet is running in a highly dense urban area, then it’s possible that a single vehicle could be crossing toll points dozens of times a day.
There are so many cost factors that come into play, such as congestion pricing, express lane tolls, and new bridges and tunnels. Since the pricing and systems are constantly changing, it can feel challenging for most fleets to stay current.
It can feel nearly impossible to forecast future expenses, especially since your routes are changing daily and your toll exposure shifts depending on the deliveries that are happening.
The Biggest Toll Compliance Challenges for Delivery Fleets
What are the biggest challenges that you are facing in toll compliance for delivery fleets? Here are some of the most common issues that we see in this subsection of the industry:
- Violation Fees: Plate misreads and unregistered vehicles can result in violation fees. These additional costs are often much more expensive than the original toll fees, and they add up quickly when you have a large fleet.
- Different Types of Invoices: If your fleet is moving through multiple regions, then it means that you have invoices coming in from dozens of toll authorities. The administrative work can get complicated, especially since each toll authority has its own unique formats and dispute processes.
- Hours and Route Variations: Most fleets don’t have real-time data tracking capability, which means that it’s nearly impossible to keep up with disputes relating to after-hours and off-route driving.
- No Vehicle-Level Reporting: Without having a good system in place for vehicle-level reporting, it’s difficult to allocate costs to specific customers or contracts. The result is that the process has a high risk of errors and requires a lot of manual labor to manage it.
- Thin Margins: Smaller providers, such as DSPs and independent contractors, are working on thin margins for each package delivery, which means that even small issues with toll costs can cause a route to lose money.
What You Are Actually Paying for Unmanaged Last-Mile Delivery Fleet Toll Costs
The shocking truth is that urban fleets that don’t have centralized management often pay 15-30% more than necessary for tolling. The higher costs are typically due to violations, overlooked disputes, and gaps in coverage.
Additionally, it’s also important to consider the expenses going into administrative time for invoice reconciliation and disputes. These admin expenses are often grouped into overhead costs, so they don’t reflect the real profit margins.
How to Manage Toll Costs for Delivery Fleets
The best investment you can make for toll management for last-mile delivery fleets is to invest in a platform that consolidates everything from multiple toll authorities. We offer one dashboard and a streamlined system with clear reporting, helping to eliminate your manual reconciliations.
These technology solutions provide automated misread detection flags, which provide a simple solution for how to reduce toll violations for delivery drivers. You can use the built-in systems for handling disputes to take care of any potential violations before they become penalties.
This system is perfect for urban fleets because the transponders can be mapped to the specific operating regions. Everything is tracked with per-vehicle data, which turns toll costs into a billing line item that can be assigned to specific routes and projects (instead of being absorbed into overhead expenses).
What to Look for in the Best Toll Management Platform for Last-Mile Delivery
Here are a few of the most important features to look for when choosing the best toll management platform for last-mile delivery:
- Automated violation detection
- Handles multiple tolling authorities
- Dispute management workflows
- Geofencing
- Real time alerts
- Vehicle-level reporting
- Scalability
The Undeniable Benefits of Toll Compliance for Delivery Fleets
Implementing toll management for last-mile delivery fleets brings a variety of benefits to streamline your systems and save money in the long run. Some of these benefits are obvious, such as lower toll fees, and there are additional advantages that add up over time.
For example, administrative teams have less work for reconciliation since the system is designed to handle the transactions automatically. Instead of dedicating so much time to invoice and dispute management, those hourly resources can shift to other in-office tasks.
Additionally, having a proactive dispute resolution helps to reduce unexpected costs. You can also consolidate the transponder program and improve your system for vehicle records that will help to keep your vehicles on the road.
FAQs
How can I reduce toll violations for delivery drivers?
Make sure that all vehicles are registered with the relevant toll authorities and use transponders that offer full regional coverage. Additionally, use a system that offers automated misread detection so that you can catch any potential issues before they become penalties.
Can I bill toll costs back to my delivery customers?
Yes, but you need a reliable system that provides data for each individual vehicle. Most manual processes are unable to track this per-vehicle information effectively.
Stop Letting Toll Costs Eat Your Last-Mile Margins
The unexpected costs really start to add up if you don’t have a good toll management system in place: tight profit margins, disputed invoices, and ongoing compliance headaches. If you don’t have centralized tools for toll management for last-mile delivery fleets, then it means that you are leaving money on the table.
Our team at Innovative Toll Solutions is here to help you with your last-mile delivery operations with a detailed platform and the full coverage that you need to keep up with everything. Contact us today to learn more about these smarter toll management tools.