All-In-One tool for Optimizing Connected Operation

How Geofencing Helps In Last-Mile Delivery Optimization

How Geofencing Helps In Last-Mile Delivery Optimization

Executive Summary

Geofencing is the “cool, new technology tool” in the world of Logistics and Distribution. With its significant benefits, it has raised standards of Service Level Agreements (SLA) significantly and is particularly helpful in optimizing Last-Mile Delivery. Given that Last-Mile Delivery builds customer loyalty, drives repeat purchases, and achieves cost-efficiency, companies that are trying to build a loyal customer base across wide geographies must invest resources in identifying the best possible geofencing equipped GPS-enabled fleet tracking software to ensure optimization of their Last Mile Delivery operations.

An early example:

  1. In 2014, Audi drivers used an app on their smartphones to connect to a central Audi control system.

2. If they maintained the assigned delivery schedule, they could go through the gates since their check-in information was automatically recorded via the app.

3. No paperwork, no stopping, no queues.

Audi won the “Volkswagen Group Logistics Innovation” award for the above “geo-fencing process” that automated the entire check-in process.

Contrary to common misconceptions, geofencing technology is not an expensive system that only large companies can afford. Businesses of all sizes can use it to their advantage!

What is a Geofencing solution?

A geofencing solution determines and manages the movement of a fleet (trucks, vans, drivers, etc) within a defined area or zone by using live tracking data to trigger movement alerts eg. notifications, in-app alerts (etc.).

A geofencing API/SDK is integrated with existing systems to trigger notifications and operate a seamless operation.

How does Geofencing work?

Geofencing can be integrated with modern GPS, routing software, hardware (etc) to achieve its objectives.

  1. The logistics team sets a virtual boundary around a location using GPS-enabled fleet and route tracking software.

2. Drivers have smartphones with apps that connect them to the central system that the control center uses.

3. When the driver arrives at a defined location, he enters the virtual geofence within which the location is situated.

4. When entering and exiting the virtual boundary, the driver triggers an automated alert that records his time-stamps (arrival, departure) triggering notifications (etc) to the command center.

5. Those details are matched with the driver’s assigned route details to check details like punctuality, delays, stoppages, emergencies, suspicious – or, unexplained – behavior (eg. unplanned routes taken), etc. Importantly, vast amounts of paperwork are avoided and time saved.

Geofencing – optimizing Last-Mile Delivery:

1) Efficient Fleet Management: Using geofencing to manage fleets, drivers, route-scheduling (etc) enables firms to manage their Last-Mile Delivery with far greater efficiency.

By setting GPS-based geofencing perimeters around Last-Mile Delivery locations, firms track fleet movement in and around the geofence. They match this with assigned times, routes, safety protocols (etc.) to monitor Real vs Actual and achieve operational efficiencies.

This eliminates fuel wastage, unnecessary trips, resource wastage (etc.) thereby saving cost. Additionally, the data collected over time allows companies to improve these processes to further enhance their Last-Mile Delivery. High-value goods, hazardous shipments (etc.) can be monitored with added scrutiny for additional safety.

Since Last-Mile Delivery is a critical component of Customer Satisfaction (especially in today’s ‘on-demand economy’), geofencing helps achieve greater levels of CSat.

2) Projected vs Actual: Clients will hold you to the Service Level Agreements (SLA) that you contract with them. Geofencing allows firms to monitor in real-time whether these pre-assigned metrics are being followed by the members of the task force.

3) Data-Analytics and Insight: As mentioned above, companies receive detailed operational data via geofencing. This not only helps in monitoring actual vs projected but also provides insight for improvement.

Detailed reports about time-stamps, driver movements, breaches, emergencies, etc. are now available for study. Geofencing also provides route details such as weather, traffic, road conditions, (etc) which helps in improving the entire logistical operation and achieve higher efficiency at lower operating costs.

4) Precise Communication: Quality GPS tracking software with geofencing will trigger communication to all stakeholders across the Logistics and Last-Mile Delivery teams. This includes intimating customers about deliveries, return shipments, or simply a progress update.

Timely updates to all participants ensure that there isn’t any confusion or wastage of resources.

5) Preventing Malpractice: Vehicular fleets are expensive investments and costly to maintain. Unfortunately, vehicle theft, damage and misuse are a common occurrence. Geofencing allows companies to protect its fleet via alerts should a vehicle breach geofenced areas.

6) Improved Safety: Incidents within or outside geofenced areas can be quickly managed by providing the required backup and assistance (field force, additional vehicles, medical aid, police, etc). With a ready backup available at all times, stringent safety levels are maintained, especially, during emergencies.

7) Cost-Efficiency: Lastly, GPS-enabled fleet management software with geofencing achieves optimal efficiency across your Logistics and Last-Mile Delivery. This efficiency results in best results at judicious costs. Geofencing gives companies a 24*7 and a fully transparent view of their field resources.

Geofencing – Advantages and Limitations:


1. Productivity increase: 50%+ employees claim their workplace productivity increased due to geofencing.

2. Data-led decisions: Employers make better decisions with the data available via geofencing. For example, managing logistics, factory worker scheduling, managing remote employees, maintaining team-connectedness (etc.)

3. Benefits of automation: Both, companies and employees, that use geofencing say that its automated benefits including notifications, pop-up notes, reminders, helpful tips, emergency handling (etc) have helped in improving productivity.

4. Improves safety, employee accountability: Companies and employees both agree that geofencing has helped immensely in improved safety and accountability. Geofencing protects confidential information by allowing access to authorized personnel. Any attempted security breaches are also easily tracked.


1. Privacy violation: Apprehensions exist with regard to privacy violations. Geofencing apps being overly intrusive is a major concern especially when it comes to sharing your location with marketing companies.

2. Issues with device battery and data consumption: While most employees view geofencing favourably, there exist concerns about the strain it puts on the battery life and data usage of their mobile device. This is particularly true when employees use geofencing apps on their personal devices for work purposes.

3. Maintenance hassles and bugs: Most people who have used geofencing said it did not work all the time. Some had to deal with bugs so annoying they stopped using geofencing completely. Organizations also found that defining, maintaining, and managing the entire process can be tedious and time-consuming.

Geofencing: numerous applications and uses:

While Fleet Management, Last-Mile Delivery, Zoning, Employee-Tracking and Attendance are the most popular uses for geofencing, it has numerous use-cases:

  1. Retail-level establishments (restaurants, retailers) can advertise daily deals to local shoppers and people within the proximity.

2. Cab-sharing services can notify passengers of vehicle availability in their area eg Uber uses geofences around airports and hotels for travelers that need rides.

3. Brands and promotional companies can notify shoppers for deals when app users are at specified locations eg malls.

Geofencing: embedded within modern GPS Fleet Tracking Software:

Modern tech tools such as GPS-enabled Fleet Tracking Software equipped with geofencing technology to manage Last-Mile Delivery, logistics, and distribution enables companies to manage vast operations down to the last detail – something that would have been difficult to imagine even in the recent past.

Conclusion: Geofencing is the “cool, new thing” in optimizing a firm’s Last-Mile Delivery. Companies would do well to spend time and effort in investigating the options that are best suited for their operation otherwise they are surely losing out on achieving greater operational efficiencies.

Fleetroot Last Mile Delivery Software fit for every business.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top