Last-mile delivery can eat up to 50% of your total delivery cost, and labour alone is roughly half of that. Most SMEs treat this as fixed. It is not.
Your last-mile leg is where the money leaks, so start there
The final leg of delivery is the most expensive one you run. Fix that leg and you move the biggest number on your logistics P&L.
Last-mile delivery accounts for as much as 50% of total delivery cost, according to McKinsey. It is the leg with the most stops, the most idle time, and the most human labour. Everything before it, the warehousing and the line-haul, is comparatively cheap and predictable. The last mile is where the chaos and the cost live.
Here is why that matters for a small business. Labour is roughly 50% of last-mile cost, and in Singapore a full-time delivery driver earns S$2,000 to S$2,800 a month before you add CPF, overtime, and paid downtime on quiet days. You are not just paying for deliveries. You are paying for the gaps between them. If most of your cost sits in one leg, that is exactly the leg to attack first, and the levers below all point at it.
Kill idle capacity: pay for delivery, not for waiting
Idle vehicles are the quietest, biggest waste in a small delivery operation. You pay full price whether the van moves or parks.
Industry fleet data shows the average fleet runs 14% to 22% more vehicles than operational demand actually requires, and 15% to 20% of vehicles sit underutilised at any given time. Every idle vehicle still burns depreciation, insurance, road tax, and parking. In Singapore that carrying cost is brutal, because a Category C COE reached around S$93,000 in 2026, and leasing a commercial van runs S$1,300 to S$1,700 a month on top of the driver.
Now stack it up. A driver at S$2,000 to S$2,800, plus roughly 17% employer CPF, plus a leased van, is a fixed cost that lands whether you did 40 deliveries this week or four. Demand for most SMEs is lumpy. You get a spike before Chinese New Year and a dead patch in the middle of the month. The fixed model forces you to size for the peak and pay for the trough. The cost lever is simple: stop owning the trough. Buy delivery capacity the way you buy electricity, by the unit, only when you use it. We break the full fixed-versus-variable math down in man and van vs an in-house driver in Singapore.
Batch your stops and let route optimization pass the savings back
Loose, one-off trips are expensive. Batched, optimised runs are cheap. The difference is real money, not a rounding error.
Route optimization typically cuts fuel and distance by 15% to 25%, with many fleets seeing a 20% to 30% reduction in total distance driven, according to industry studies. McKinsey has cited around 15% cost reductions from AI-driven logistics optimization. Fewer kilometres means less fuel, less driver time, and less vehicle wear, all at once. When you batch ten drops into one optimised route instead of running ten separate errands, you are compressing the single most expensive part of your day.
The catch with most platforms is that they keep those routing savings. They quote you a flat per-stop rate and pocket the efficiency. That is the opposite of what should happen. When you consolidate deliveries, the savings should land in your pocket, not theirs. For a deeper look at where these costs hide, read how logistics costs sink small businesses and our breakdown of last-mile delivery costs in Singapore.
Right-size the vehicle and the commitment to the job in front of you
Paying for a full fleet to move a few boxes is the small-business version of buying a lorry to fetch groceries. Match the tool to the task and the overpay disappears.
Most SME delivery days do not need a permanent van and a payrolled driver. They need the right vehicle for a few hours, a few days a week. The moment you lock into ownership, you inherit every fixed cost that comes with it: the COE, the insurance renewals, the maintenance, the CPF, the annual leave cover. Lalamove's own Singapore breakdown notes that vehicle financing, insurance, road tax, fuel, maintenance, parking, and ERP charges can easily add thousands per month on top of the driver. None of that scales down when your volume does.
The lever here is commitment sizing. Instead of one big fixed decision, make many small right-sized ones. Book a man and van for the half-day when you have a bulky multi-item job. Book multi-stop for the day you have a cluster of parcels. Book nothing on the days you have nothing. The unit of spend should match the unit of work. When it does, your delivery line stops being a fixed monthly drag and starts moving with your actual revenue.
The move: turn fixed delivery overhead into variable pay-per-use with BoxPls
Add the levers up and they point one direction. Stop owning idle capacity, batch and optimise your stops, and right-size every job. BoxPls Logistics is built to let a Singapore SME do exactly that without hiring anyone.
Here is the cost swap, laid out plainly.
Old fixed model, monthly
- Driver salary: S$2,500
- Employer CPF (17%): S$425
- Van, financed or leased: S$1,300
- Fuel: S$1,200
- Insurance, road tax, carpark and ERP: S$540
- Total you pay every month, busy or not: around S$5,900
BoxPls variable model, per use
- Man and van, weekday half-day: from S$165
- Man and van, weekday full-day: from S$299
- Multi-stop delivery: from S$9 per stop, exact price shown before you book
- Total on a quiet week: S$0
With BoxPls there is no platform service fee, and because route optimization is built in, 100% of the routing savings pass straight to you in the quoted price. You get an instant quote, you see the exact number before you commit, and you only pay on the days you actually move goods. That is fixed overhead converted into variable spend, which is the whole game.
If your van sat idle for even one day this week, you already overpaid. See what your next run actually costs on our transparent pricing page, then book it.
