How to Improve Last-Mile Delivery For Your Business

Last-mile delivery can be improved by making the final journey from your warehouse, store or fulfilment centre to the customer more predictable, measurable and efficient.

For Malaysian businesses, that usually means better order preparation, smarter route planning, accurate customer data, suitable delivery partners and clearer communication.

The Department of Statistics Malaysia (DOSM) reported RM319.7 billion in e-commerce income by establishments during the first quarter of 2026, up 2.8% year on year. As e-commerce activity remains substantial, delivery performance increasingly forms part of the overall customer experience.

Why Is Last-Mile Delivery Difficult For Malaysian Businesses?

Delivering many parcels to many individual addresses is less predictable than moving bulk goods between warehouses.

Research by Blackbox Research, republished on MIDA’s website, identified logistics service inconsistencies and rising delivery costs as challenges that could affect Malaysia’s e-commerce growth.

Common problems include:

Traffic And Distance: Delivery conditions vary between dense urban areas and more dispersed locations.

Failed Deliveries: Customers may be unavailable, addresses may be incomplete or drivers may face building access problems.

High Delivery Costs: Fuel, labour, re-delivery and inefficient routes can reduce margins.

Poor Visibility: Customers may become frustrated when tracking information is vague.

Volume Spikes: Festive periods and major online campaigns can create sudden increases in parcel volume.

Improving last-mile delivery therefore requires more than simply choosing a cheaper courier.

How Can You Improve Last-Mile Delivery?

Step 1: Map Your Current Process

Document how a typical order moves through your business, then identify where delays or failures occur.

Track areas such as:

1. Order processing time
2. Packing and dispatch time
3. Courier collection
4. Transit time
5. Delivery attempts
6. Complaints
7. Returns or undelivered parcels

Use several weeks of data rather than relying only on individual complaints.

Step 2: Set Useful Delivery KPIs

Avoid vague goals such as “deliver faster”.

Set measurable targets instead.

Useful KPIs include:

Choose the metrics that best match your business model.

Step 3: Improve Customer Address Data

Poor address information can create avoidable delays.

Your checkout should capture enough information for the driver to find the customer, including:

• Full address, building, unit and postcode
• Reachable phone number
• Landmark where useful
• Delivery instructions
• Preferred time for scheduled deliveries

Use address validation or autocomplete where your platform supports it.

The goal is to remove uncertainty before the parcel reaches the driver.

Step 4: Set Realistic Delivery Promises

Avoid promising next-day delivery across Malaysia if your network cannot consistently achieve it.

Segment service areas instead.

These are examples rather than fixed benchmarks. Actual times depend on your courier, fulfilment location, product type and service level.

A slightly longer estimate that you consistently meet is usually better than a fast promise you regularly miss.

Step 5: Improve Pick, Pack And Dispatch

Last-mile problems can begin inside the warehouse.

If orders miss courier collection because picking or packing takes too long, changing delivery providers will not solve the root cause.

Align warehouse processes with courier collection schedules.

As volume grows, businesses may consider:

Batch Picking: Pick multiple similar orders together.

Zone Picking: Assign staff to specific warehouse areas.

Barcode Scanning: Reduce manual picking errors.

Automated Order Routing: Send orders to the most suitable fulfilment location.

MIDA has highlighted automation, artificial intelligence and Internet of Things technologies as part of Malaysia’s smart logistics development.

Step 6: Use Smarter Route Planning

For businesses operating their own fleet, the shortest route is not always the best route.

Planning should consider:

• Delivery density
• Vehicle capacity
• Time windows
• Expected traffic
• Driver working hours

Grouping nearby orders can reduce unnecessary travel between districts.

Larger fleets may benefit from route optimisation software, while smaller businesses can still organise deliveries by postcode or geographic zone.

Step 7: Match The Delivery Method To The Order

Not every parcel needs the same service.

For example:

Standard Courier: Regular e-commerce parcels.

Express Delivery: Urgent local orders.

Scheduled Delivery: Furniture, appliances or high-value goods.

Cold-Chain Delivery: Certain foods, pharmaceuticals and other temperature-sensitive products.

Collection Points: Orders where home delivery is inconvenient.

For regulated pharmaceutical products, handling should follow approved storage conditions and applicable Malaysian Good Distribution Practice requirements.

Matching service levels to each order helps avoid unnecessary premium delivery costs.

Step 8: Give Customers Better Visibility

Useful tracking updates can reduce uncertainty.

A simple sequence could be:

1. Order confirmed
2. Packed
3. Collected
4. In transit
5. Out for delivery
6. Delivered

For scheduled deliveries, provide a reasonable time window where possible.

Email, SMS, WhatsApp or app notifications can also help customers prepare for delivery.

If a parcel is delayed, communicate early rather than waiting for the customer to contact support.

Step 9: Reduce Failed Delivery Attempts

Every failed attempt creates additional work and may delay the customer further.

Common causes include:

1. Customer unavailable
2. Incomplete address
3. Wrong phone number
4. Building access restrictions
5. Rescheduling requests
6. Driver unable to locate destination

Treat failed deliveries as data.

If address problems are common, improve checkout validation. If customer availability is the main issue, improve pre-delivery notifications.

Step 10: Review Delivery Partners Regularly

Do not judge couriers only by parcel rates.

Compare:

Coverage: Can they reach your main customer locations?

Reliability: Are promised delivery windows met?

Tracking: Is tracking clear and accessible?

Claims: How are damaged or lost parcels handled?

Integration: Can they connect with your order system?

Peak Capacity: Can they handle campaign periods?

One provider may perform better in Klang Valley while another may suit different regions or specialised deliveries.

A multi-carrier strategy can offer more flexibility for some businesses.

Step 11: Plan For Peak Periods

Festive shopping periods and major online campaigns can increase delivery volume quickly.

Prepare by reviewing:

• Expected sales volumes
• Staffing
• Packaging supplies
• Courier capacity
• Collection schedules

A Kenanga Investment report republished by MIDA said continued e-commerce growth was expected to increase demand for distribution hubs, warehouses and automation.

Even for smaller businesses, capacity planning matters.

Step 12: Review Performance Regularly

Last-mile improvement is ongoing.

Review your core KPIs monthly or quarterly and look for trends.

If cost per delivery rises, investigate courier pricing, fuel, delivery density and failed attempts.

If first-attempt delivery improves after introducing customer notifications, that gives you evidence that the change is working.

Should You Outsource Last-Mile Delivery?

There is no single best model.

Outsourcing can give smaller businesses access to established logistics networks without building their own fleet.

Businesses with high local order density or specialised requirements may benefit from managing part of the last mile themselves.

Read More: How to Know If You Can Scale Your Business

How Can Technology Help?

Technology is most useful when it solves a clear operational problem.

Common tools include:

• Route optimisation software
• Warehouse management systems
• GPS fleet tracking
• Automated notifications
• Delivery analytics dashboards

If inaccurate addresses are the problem, fleet analytics will not fix them. If drivers spend too much time planning routes manually, route optimisation may help.

Start with the problem, then choose the technology.

What Is The Best Way To Start?

Start with one measurable problem.

For example:

Month 1: Establish KPIs.

Month 2: Improve address information.

Month 3: Review courier and route performance.

Month 4: Improve tracking and notifications.

Month 5: Analyse failed deliveries and returns.

This helps businesses avoid spending heavily on logistics technology before understanding the real bottlenecks.

How Can Your Business Build A Better Last-Mile Strategy?

Improving last-mile delivery starts by identifying where your current process loses time, money or customer confidence.

Focus on measurable improvements: better customer data, realistic delivery promises, stronger warehouse processes, smarter routing, suitable delivery partners and consistent performance tracking.

As Malaysia’s business and logistics landscape evolves, Top Business provides Malaysian business and industry news covering the trends and developments shaping how local businesses operate and grow.

Sources

• Department of Statistics Malaysia (DOSM): Performance of Services Sector and E-Commerce Income, First Quarter 2026.
• Department of Statistics Malaysia (DOSM): Usage of ICT and E-Commerce by Establishment.
• Ministry of Transport Malaysia: Logistics and Trade Facilitation Masterplan.
• Blackbox Research, republished by MIDA: Unlocking Malaysia’s E-Commerce Growth: The Role of Logistics.
• MIDA: Malaysia’s Transformative Vision in Logistics: The Smart Logistics Complex.
• Kenanga Investment / The Star, republished by MIDA: Logistics Sector to Benefit From eCommerce Popularity.
• National Pharmaceutical Regulatory Agency (NPRA): Good Distribution Practice guidance.