Manufacturing, autos and logistics
Cost per drop
The cost of each delivery stop in last-mile logistics.
Last reviewedWhat does Cost per drop mean?
Cost per drop is the total cost of running a delivery route divided by the number of successful stops (drops) made. It is the core unit cost of parcel and grocery delivery. Example: a van with its driver, fuel and lease costs 400 a day and makes 100 drops, so cost per drop is 4. If better routing and denser delivery areas raise that to 125 drops, cost per drop falls to 3.20. Failed deliveries count as cost with no drop, which is why lockers, pickup points and delivery time slots matter.
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Related terms
- Last mileThe final step of delivery, from a local hub to the customer's door.
- Unit economicsThe revenue and cost of one unit: one product, order or customer.
- Capacity utilizationActual output as a share of the most that could be produced.
- OEM (original equipment manufacturer)In autos and machinery, the company that designs, assembles and brands the final product.
- Tier 1 supplierA supplier that sells complete parts or systems directly to the carmaker.
- Vehicle platformA shared set of engineering underpinnings used for many car models.
- Battery pack costThe cost of an electric vehicle's battery pack, usually quoted per kWh of capacity.
- Installed baseThe number of a company's machines or systems currently in use at customers.