Define a comparable operating contract
Inputs and assumptions to record
- Attempted, completed and failed stops under one success definition. (not complete)
- Dispatch-to-return time and loaded driver cost. (not complete)
- Route distance, vehicle resource boundary and toll/parking costs. (not complete)
- Revenue and variable order/stop cost on one tax basis. (not complete)
- Repeat, return and recovery rules for each failure class. (not complete)
route contribution = completed-stop revenue - dispatch cost - driver cost - vehicle cost - stop-variable cost - failed-delivery cost
- completed-stop revenue
- Revenue earned under the defined successful-delivery event (CU per route) — order and delivery record
- vehicle cost
- Fuel/energy, maintenance, lease/depreciation and included route resources (CU per route) — vehicle record or labelled scenario
- failed-delivery cost
- Handling, repeat travel, return, collection and loss caused by failed attempts (CU per route) — failed-stop record or scenario
Use one currency, indirect-tax basis, attribution rule and time horizon. All numbers below are invented currency units (CU), not forecasts or benchmarks.
Worked example: Last-Mile Delivery: Route, Time and Failure
Invented route: 24 attempts, 21 completed at 18 CU revenue; 55 CU dispatch, 120 CU driver, 70 CU vehicle, 42 CU completed-stop handling and 36 CU failed-delivery cost.
| Line | Calculation | Result |
|---|---|---|
| Completed-stop revenue | 21 × 18 | 378 CU |
| Included route cost | 55 + 120 + 70 + 42 + 36 | (323 CU) |
| Route contribution | 378 - 323 | 55 CU |
| Contribution per completed stop | 55 ÷ 21 | 2.62 CU |
| Case | Changed input | Result |
|---|---|---|
| 18 completions | 324 revenue - (245 fixed + 36 handling + 72 failure) | (29 CU) |
| 21 completions | Base | 55 CU |
| 23 completions | 414 revenue - (245 fixed + 46 handling + 12 failure) | 111 CU |
Bridge the denominator from route to successful delivery
| Measure | Base case | More-failure case | Interpretation |
|---|---|---|---|
| Route cost | 323 CU for 24 attempts and 21 successes | 353 CU for 24 attempts and 18 successes | Route total remains the first reconciliation |
| Cost per attempted stop | 323 ÷ 24 = 13.46 CU | 353 ÷ 24 = 14.71 CU | Shows the attempted-stop workload only |
| Cost per successful delivery | 323 ÷ 21 = 15.38 CU | 353 ÷ 18 = 19.61 CU | Failure changes the denominator and adds failure cost |
Use the exact calculation owner
- Shipping Profitability Planner
Choose a shipping charge after weighted delivery costs
Use the result without hiding uncertainty
- Define success, failure and route horizon.
- Reconcile attempted stops to outcomes.
- Cost dispatch, driver, vehicle and handling separately.
- Attach repeat/return cost to failure classes.
- Stress completion, density and route time.
- Pilot one change and reconcile actual route contribution.
- Dividing route cost by attempted stops.
- Using revenue per stop without order contribution.
- Ignoring dispatch and return-to-base time.
- Counting redelivery revenue twice.
- Treating one dense route as a network benchmark.
Questions before committing
- Should failed stops receive revenue?
- Only if the commercial contract actually earns it under the defined event; keep collected cash, recognised revenue and contribution separate.
- How should redelivery be treated?
- Attach its time, vehicle, handling and any recovery to the original failure cohort or a clearly linked route record.
- Is contribution per stop enough?
- No. Retain route total, completion rate, time-window and capacity views.
Sources and methodology
- Last-Mile Delivery: Route, Time and Failure: primary calculation methodology — Margin101: Owns editable calculation, units, assumptions and validation boundaries.
- Vehicle Cost Calculator — U.S. Department of Energy Alternative Fuels Data Center: Vehicle cost-component context only; it supplies no global route default.
Model the next decision
- Shipping Profitability Planner
Choose a shipping charge after weighted delivery costs
- Fulfilment Cost Comparison Planner
Compare self-fulfilment and third-party cost contracts at a chosen order volume
- Cash-on-delivery Profit Impact Planner
Measure cash-on-delivery success and failed-delivery loss