Why your carrier budget is under fire (and how to fix first-mile collection)
I'm guessing you've been in meetings where leadership questions why your carrier costs are so high, or suggests "there must be cheaper options out there".
It's frustrating because they're not wrong that rates can vary wildly - but they may be missing the crucial detail:
for e-commerce and marketplace operations with multiple drop-ship locations, your carrier requirements eliminate 90% of those "cheaper options" from consideration.
Let me explain what I mean.
When I was at Farfetch, I was constantly approached by last-mile delivery companies offering sustainable solutions in restricted areas - within the M25, Barcelona, Amsterdam... On paper these looked cost-effective. In practice, they were built for warehouse models, not marketplaces.
The first-mile collection challenges you're probably dealing with daily:
Seller diversity: different dispatch speeds, remote locations, varying packaging compliance
Pickup complications: unusual opening hours, vehicle restrictions, orders not ready when driver arrives
Volume unpredictability: no guaranteed consolidated collections = higher per-pickup costs
Visibility gaps: not all orders scanned on collection, data black holes before hub scan
Competing priorities: what works for sellers doesn't always work for buyers (and vice versa)
This is why I find it puzzling that carriers and tech providers focus relentlessly on last-mile innovation when, for marketplaces, first-mile is where operations break down.
Only DHL, FedEx, and UPS have genuinely invested in collection automation that works everywhere - one API integration, every country, reliable “FROM-everywhere-TO-everywhere” capability at scale.
For marketplaces with £2-3M carrier spend, these first-mile inefficiencies typically cost 5-10% of budget - that's £100-£300K annually in failed pickups, customer compensation, and operational firefighting. More importantly, it's burning your time on reactive problem-solving, instead of strategic improvements.
Why act now?
With Q1 General Rate Increases landing in January, now is the moment to audit your first-mile operations before renewal negotiations close. Even small optimisations - better routing logic, automated seller compliance, consolidated regional pickups - can reduce costs by 15-25% without changing your seller network or customer experience.
I've spent 15+ years helping marketplace logistics teams solve exactly these challenges. We've built both technology and operational frameworks specifically for multi-location collection models.
I'm offering free diagnostic calls throughout January and February to help you pinpoint where first-mile inefficiencies are happening - and quantify the cost impact. You'll walk away with a clear picture of potential savings, regardless of whether we work together.
Because ultimately, great delivery experiences always start at the beginning - and right now, that's where your budget savings are hiding.
Chloe Harris
Contact Carrie - carrie@carriboo.co.uk or +44 203 536 4784