Outsourced Delivery: Is an Internal or External Last Mile Fleet Best?

The pressure is on in 2024. With customers becoming increasingly demanding, flawless speed, precision and optionality in final mile delivery have become the standard-bearers. Every delivery is a critical touchpoint for building trust and loyalty — and just one mistake can end a customer relationship for good. Companies now face a pressing question: Optimize their delivery operations with an internal fleet or go with the expertise of a third-party logistics provider (3PL) specializing in outsourced delivery?

This choice is about more than just logistics; it’s about survival of the fittest, where every second and every cent counts. With the cost to operate a truck at an all-time high of $2.25 per mile, the decision between running your own fleet or outsourcing could make or break your ability to respond to customer needs quickly and effectively. Choose wisely and you position your business to excel in a world where how you deliver is just as important as what you deliver.

Benefits of Using an Internal Fleet

Maintaining an internal fleet gives businesses an inside track: hands-on control over delivery logistics for unparalleled efficiency, plus a mobile branding canvas that reinforces customer loyalty with every package. For companies prizing operational mastery and customer bonds, keeping it in-house delivers the goods, no pun intended.

Control Over Operations

Utilizing an internal fleet in logistics provides businesses with unmatched control over their delivery operations, an invaluable asset in today’s competitive marketplace. Companies gain the ability to directly manage every aspect of their delivery process — staffing, routing and scheduling. Control over staffing ensures that each driver meets the company’s specific standards, fostering a uniform level of service excellence. Similarly, overseeing routing and scheduling allows companies to nimbly respond to unforeseen changes, such as traffic disruptions, while optimizing delivery efficiency and customer satisfaction.

Moreover, an internal fleet allows businesses to disrupt with proprietary technologies to enhance their operational capabilities. Cutting-edge technologies like real-time tracking and route optimization can leverage data to refine delivery routes, reduce fuel consumption and improve delivery times. For instance, fleets integrating GPS tracking have reduced fuel costs by up to 9% and decreased accident costs and labor expenses by 15% and 10%, respectively. 

Brand Representation

Using internal fleets offers a unique opportunity to strengthen customer connections, boost brand loyalty and improve the overall customer experience. When companies handle their own deliveries, they control the entire process, from the moment a truck leaves the warehouse until the package is in the customer’s hands. Such control keeps every interaction in line with the brand’s values and commitment to service excellence and strengthens customer relationships. It’s a strategic advantage, especially when considering the substantial cost benefits of retaining existing customers compared to the expense of attracting new ones, which can be up to 16 times higher.

Vehicles adorned with company branding also serve as mobile billboards and continuously reinforce the brand’s image with every mile traveled. Such consistent visibility helps build a reliable and familiar presence in customers’ minds. It strengthens brand identity and trust to the point where it encourages repeat business — a huge deal, considering that increasing customer loyalty by just 5% can elevate lifetime profits per customer by as much as 78%.

Advantages of Using a 3PL for Outsourced Delivery  

Outsourced delivery through a 3PL offers a game-changing trifecta: cost savings from economies of scale, unmatched scalability to meet demand swings and supply chain flexibility — freeing businesses to laser-focus on core competencies.

Cost Efficiency

Choosing a third-party logistics provider (3PL) can be a game-changer for businesses looking to cut maintenance, fuel and training costs. With outsourced delivery, companies leverage the 3PL’s extensive network and technology to reduce transportation and warehousing expenses. This setup frees up resources, allowing businesses to concentrate on what they do best — innovating and marketing their products — rather than getting bogged down by the complexities of logistics.

3PLs also achieve cost savings through economies of scale. By managing logistics for multiple companies, they can provide more competitive rates for storage and shipping. Additionally, the move toward automation in the logistics industry enhances these advantages. As businesses face rising labor costs and shortages, automation helps reduce workforce expenses, decrease errors and alleviate the pressures on inventory, transportation management and order processing.

Scalability and Flexibility

Opting for outsourced delivery through the 3PL route also empowers businesses with unmatched scalability and flexibility. With a 3PL, companies can scale operations up or down to match fluctuations in demand, all without the burdens of managing their own fleet size or personnel.

When do 3PLs shine most? During peak seasons like holiday rushes or big sales events. Their ability to adjust on the fly to market shifts and spikes in demand make them invaluable. For instance, when retailers and e-commerce platforms see a sudden surge in orders, a 3PL provides the necessary resources and infrastructure to manage this increase efficiently. They keep deliveries on track and uphold service quality without the long-term costs of expanding logistics capabilities.

Emerging Trends Influencing Decision-Making

Rapidly evolving technologies like AI route optimization and autonomous vehicles disrupt age-old logistics norms while mounting sustainability pressures compel a green transformation — redefining the decision between maintaining an internal fleet or partnering with a 3PL for outsourced delivery. Here’s what you should consider:

AI, Autonomous Vehicles and Smart Delivery Management

AI and predictive analytics are redefining how to manage and optimize fleet operations. By crunching data on traffic, weather and past delivery performances, these technologies are crafting smarter routes that slash transit times and fuel use — imagine cutting fuel costs by up to 20%. Beyond saving pennies, these technologies also come through in the clutch with insights to react to any curveballs or disruptions the day might throw, from sudden downpours to unexpected road closures.

Meanwhile, autonomous delivery vehicles are rolling into the scene, ready to transform the ride from warehouse to doorstep. These self-driving wonders are merging into existing fleets, promising to trim delivery times and peel back costs linked to last mile delivery — a notorious budget-buster. Delivery management systems are becoming the brains of the operation and supporting these tech marvels. They intelligently gauge when to deploy your in-house fleet or when to tap into a third party for that extra lift during peak times. Deliveries are not just on time; but also, they’re intelligently assigned to maximize efficiency and adaptability.

Sustainability Considerations

The reality is that time flies and 2050 is not so far away. The logistics sector stands at a crossroads, with the potential to account for up to 40% of global carbon emissions if left unchecked by then. In response, the industry is going through an eco-friendly overhaul. Electric delivery vans and trucks are increasingly dotting our highways, marking a critical transition toward cleaner, greener logistics operations. Simultaneously, cutting-edge, dynamic routing technology redefines efficiency, enabling real-time adjustments that reduce unnecessary miles and fuel consumption.

Regulatory changes and consumer expectations are further spurring on this transformation. With new sustainability mandates emerging in the EU and US, transparency and accountability are becoming the norm. Consumers are echoing this shift, with 66% now considering a company’s environmental impact before making a purchase.

OneRail: Your Partner for Peak Delivery Performance 

Deciding whether to manage an internal fleet or use an outsourced delivery path is no small feat these days, with last mile logistics increasingly complicated. Each option offers distinct advantages: An internal fleet provides unmatched control and a direct connection to your customers, enhancing brand loyalty and customer satisfaction. Conversely, outsourcing to a 3PL offers immediate scalability, flexibility during demand fluctuations and significant cost efficiencies from shared resources and advanced automation.

OneRail stands out by cohesively integrating these choices through its advanced delivery management platform, linking businesses to an expansive network of over 12 million couriers and 1,000+ carriers nationwide. Whether you need the detailed control of an internal fleet or the expansive capability of outsourced logistics, OneRail’s OmniPoint® Platform and Exceptions Assist™ service keep your deliveries efficient, cost-effective and tailored to market dynamics and consumer needs.

Ready to transform your logistics operations? See OneRail in action firsthand. Schedule a demo today and steer your delivery strategy toward success.


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