What is the Vehicle Miles Traveled Tax?

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The vehicle miles traveled tax is known by multiple names: the mileage tax, road usage charging (RUC), distance-based user fees (DBUF), vehicle miles traveled tax (VMTT), or mileage-based user fees (MBUF). It is simply a tax based on how many miles a driver travels. It is an excellent option to replace the gas tax as a means to fund the Highway Trust Fund. This fund is how our nation pays for maintaining and building infrastructure projects such as roads, bridges, and tunnels.  

Why Do We Need the Vehicle Miles Traveled Tax?

The gas tax is an antiquated way of funding our infrastructure and has been inadequate for over a decade. It has not kept up with inflation in the last 25 years, causing it to drop in value by over 40%. In the last quarter-century, traffic has only increased as the population has grown. The wear and tear on our infrastructure worsens, but our ability to maintain it can’t keep up. 

Furthermore, electric and fuel-efficient cars pay very little, if any, gas tax. They still use the roads and contribute to their degradation, but the drivers do not help pay for their upkeep. While electric and fuel-efficient vehicles are better for the environment, it is still important that these drivers pay their fair share of taxes for the roads. 

How Would We Implement the Vehicle Miles Traveled Tax? 

This tax is already in place in Oregon and Utah on an opt-in basis. Washington, Colorado, Hawaii, Minnesota, California, Delaware, and Pennsylvania have researched road usage charging programs in their states with success. Oregon’s fully functioning road usage charging program, OReGO, is the leading example of how to implement a mileage tax nationwide. 

OReGO uses Azuga Insight to automatically track driver miles and collect revenue without any staff needed or driver intervention. Drivers simply install hardware into their OBD port and set up a wallet online. As they drive, Azuga Insight tracks their miles and removes funds automatically from the wallet. 

Participation in OReGO is optional, but drivers have the incentive of not having to pay increased registration fees based on mpg rating. Drivers who opt-in have to meet these vehicle requirements: 

  • Light-duty
  • 20 miles-per-gallon or better rating
  • Registered to an Oregon resident

OReGO has been implemented smoothly and is easy to sustain. 

Benefits of the Vehicle Miles Traveled Tax

Safer

Roads in poor condition cause 14,000 highway fatalities annually. It’s necessary for communities everywhere to obtain the funding to repair and maintain their roads. Streets all over the country are aging rapidly, and more funding in the Highway Trust Fund would help us stay on top of maintenance before more fatalities happen. 

Fairer

Most drivers will pay the same as they are currently paying under the gas tax, but all drivers will be paying instead of just some. This means that electric vehicles and fuel-efficient vehicles will contribute their fair share as well. Everyone pays for what they use, so drivers who don’t drive very much won’t have to worry about paying very much.

More Funding

Experts believe that implementing a vehicle miles traveled tax across the US would increase the Highway Trust Fund by $340 million. This would fund improvements to existing infrastructure, along with new infrastructure for areas that have grown in the past 25 years. 

Conclusion

The vehicle miles traveled tax is the most likely solution to the issue of our country’s crumbling infrastructure. It may be a long time before it is implemented across the nation, but as states pick it up, it is important to know what it is and how it will affect you. To keep up with the latest updates regarding the vehicle miles traveled tax, follow Azuga Insight’s blog.

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Last Mile Delivery

Last mile delivery is the step in delivery when something moves from a transportation hub to its final destination, such as a residence or a retail store. This step must be as quick and efficient as possible to ensure that customers are satisfied, and products move as much as possible. What is last mile delivery, and how can businesses perfect it? 

Steps of Last Mile Delivery

There are five steps to last mile delivery to go through to ensure it is accurate and efficient. 

  1. Enter orders into a centralized system
    You've been tracking the order all along. At this point, the customer is most likely also tracking it through a tracking number. It’s essential that you track the order to know precisely where it is if they have any questions along the way. 
  1. Orders arrive at the transportation hub. 
    Last mile delivery begins at this step. From here, the business must ensure that the order gets to the customer as quickly and efficiently as possible. 
  1. Designate delivery personnel. 
    Designate delivery personnel to deliver the parcel using a last-mile logistics solution. 
  1. Load orders onto delivery vehicles. 
    Scan each item before loading them onto the delivery vehicles. This is an important part of tracking as it updates the sender and the recipient as to the order's status. You don’t want anything to get lost along the way. 
  1. The order reaches the recipient. 
    Once the order reaches the customer, the last mile delivery process is complete. Be sure to update the tracking information to indicate the item has been delivered. 

Last Mile Delivery Challenges

Big-name companies like Amazon and Walmart are replacing last mile delivery with middle mile delivery. With middle mile delivery, the company owns the fulfillment, so the delivery process goes from the port to the fulfillment center. The problem with last mile delivery is that it is expensive: it can account for 53% of a shipment’s total costs. Supply chain inefficiencies are increasing as need grows, and so costs are only going up. It’s vital to optimize last mile delivery if you want to use it for your business. 

How to Optimize Last Mile Delivery

Technology is the answer to optimizing last mile delivery. Route planning software, for example, can minimize delivery costs and cut the time that it takes to deliver. Auto dispatching also helps to cut down on mistakes and time. Finally, gathering data and getting detailed reports can help identify problems in your operations and tell you how to improve upon your weaknesses. Fleet management software like Azuga offers all of these features and more to help optimize your last mile delivery options. 

Conclusion

Last mile delivery is still the standard way smaller businesses do their deliveries, and Azuga makes it possible to keep last mile delivery, even while competing with big retailers. Find out more about Azuga by reading our blog or visiting our website.

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Last Mile Carrier

Last mile carriers are the shipping companies that carry out last mile deliveries. Examples of last mile carriers include UPS, FedEx, USPS, and regional carriers. Last mile delivery is the step in delivery when something moves from a transportation hub to its final destination, which may be a residence or a retail store. Last mile carriers offer many benefits, which we will outline below. 

Tracking

Many last mile carriers allow customers to track their package on a map or see how many stops away it is. Other providers give customers a very specific estimated arrival time. Previously, it could only be estimated within windows of several hours, so this is an impressive and essential feat for customer service. 

Ability to Communicate with the Driver

If anything is needed when delivery drivers are on the road, it used to be impossible to get in touch with them. Now, apps allow customers to communicate directly with their drivers to update them on any changes that come up during the delivery window. 

SMS Updates

One benefit of tracking drivers is sending SMS updates if a package is ever delayed, and even update customers on when it arrives so they can plan their day accordingly. They no longer need to worry about expensive packages being lost or stolen, since they can pick them up right away. It’s ideal for keeping customers updated and satisfied. 

Delivery Ratings

Customers can rate how their deliveries went and leave feedback that delivery companies can use to improve their methods and improve customer service even further. Customers appreciate their voices being heard, and companies need to hear how their employees are doing. 

Conclusion

Last mile carriers are an integral part of the last mile delivery system. Last mile fleets must have the technology to track delivery drivers and update customers with necessary information. Azuga offers this technology and more to help streamline operations and keep everything running smoothly with the entire last mile delivery process. Find out more on our website.

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Middle Mile Delivery

The middle mile in logistics is the part of a supply chain that moves goods from the port to the warehouse or distribution center. It’s also known as local distribution and offers cost-saving opportunities that companies using last-mile delivery don't see. How exactly does middle mile delivery work, and how is it different than last mile delivery? 

Middle Mile versus Last Mile Delivery

Last mile delivery is the delivery of products from a fulfillment center to a retail store or customer. Meanwhile, middle mile delivery takes products from a factory or port to a fulfillment center. Middle mile delivery uses technology to track vehicles, schedule deliveries, and determine the capabilities of the truckers and fulfillment centers. 

Advantages of Middle Mile Delivery

Reduces Costs: Since middle mile delivery involves owning the distribution center and the retail store, you control both ends of the supply chain. Therefore, you reduce inefficiencies and inaccuracies and have complete control over where the money goes. 

Can Change Quickly: Because you have complete control over the supply chain, you can make changes quickly and adapt to them easily. It’s easy to grow your business and meet demands as they shift. 

More Competitive: Many companies take advantage of middle mile delivery to cut costs, which helps you stay on par with your competitors. It’s crucial to compete with retail giants like Walmart and Amazon, who have perfected middle mile delivery. 

Third-Party Logistics Services

Many third parties offer logistics services to help manage middle mile delivery. On-demand service providers create the most efficient and quickest deployment of middle mile delivery. Some of these services offer smaller hauling vehicles to make LTL deliveries or single-pallet deliveries. They also harness freelancers to get a cost advantage over competitors. There are many third-party logistics companies available. Just be sure to research what you are looking for and ensure they are a good fit for your needs. 

Conclusion

Middle mile delivery is the new trend in logistics that large companies are adopting, and small companies will likely join in as well. To find out more about the trends in logistics, check out more of Azuga’s glossary, or read our blog.

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