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30% more delivery capacity, 20% lower fuel bill: How this S’pore courier found a greener route to growth

Home-grown SME XDel uses real-time route planning to cut wasted mileage and increase delivery capacity, while emissions tracking and e-waste collection help it pursue larger contracts and new services

Getting a parcel to your door quickly is not simply a matter of taking the shortest route. For logistics firms juggling multiple deliveries, every additional kilometre costs time and fuel.

That calculation became increasingly important for home-grown courier company XDel as it faced thin margins, rising operating costs and tight labour supply. Rather than cut back, the last-mile business-to-business specialist has invested nearly $4 million since 1999 in technology to make each delivery run more efficient.

Its proprietary Vehicle Route Planning (VRP) system dynamically recalculates routes in real time as delivery conditions change. The result: XDel increased delivery capacity by 30 per cent while cutting its monthly fuel bill by 20 per cent.

What began as a push for efficiency also reduced fuel consumption and strengthened XDel’s sustainability credentials – increasingly an advantage as larger customers seek greener supply-chain partners.

Harold Lee, XDel’s founder and managing director, explains: “If you can’t increase your selling price in a competitive market, the only way to grow is to lower your operating costs.

“Our automated system does exactly that by eliminating wasted mileage, which directly translates into fuel savings and also strengthens our sustainability efforts.”

Smarter deliveries with route planning

XDel started in 1993 as a humble courier service delivering flowers and hampers across Singapore. As the business expanded, many core operations remained manual, recalls Lee.

Delivery manifests were printed on paper, drivers planned their own routes, and operations staff manually sorted shipments and coordinated deliveries.

The turning point came in 2015, when XDel worked with A*STAR through an innovation programme managed by Enterprise Singapore (EnterpriseSG), then known as SPRING Singapore, to develop its proprietary VRP system. EnterpriseSG also supported the project with funding.

Unlike conventional route-planning software that fixes delivery schedules before vehicles leave the depot, XDel’s system recalculates routes throughout the day as traffic and delivery conditions change, says director Eddie Lee, who joined the company in 2012.

The company also introduced mobile apps that send updated routes directly to drivers’ phones while allowing operations staff to monitor deliveries in real time, avoiding the need to issue dedicated devices.

“Through better systems, automation and workflow visibility, we were able to reduce manual processes, improve job coordination between customer service and operations, and lessen operational constraints on the ground,” Eddie says.

That investment proved its worth when the Covid-19 pandemic disrupted supply chains.

Having entered healthcare logistics in 2019, XDel was able to respond quickly to surging demand for medications and vaccines without increasing manpower.

Lee says: “This would have been impossible if XDel did not have the technology it had built.”

Today, the company handles around 2,000 deliveries a day, with pharmaceuticals, lab samples and clinical trial shipments for hospitals accounting for much of its business.

Winning corporate clients with green logistics

Many of the changes XDel introduced to improve efficiency later became sustainability advantages as customers placed greater emphasis on environmental performance.

In healthcare logistics, for example, the company chose specialised medical-grade cooler boxes instead of refrigerated vehicles for temperature-sensitive deliveries.

This approach allowed it to provide cold-chain services while avoiding the additional energy use and emissions associated with refrigerated fleets.

The company has since expanded into electronic waste logistics.

Through a partnership with PC Dreams – established after the companies connected through an EnterpriseSG programme around 2022 – XDel collects and returns used electronic devices for refurbishment and recycling, supporting Singapore’s circular economy.

Lee explains: “The partnership has given us the opportunity to develop operational capabilities in reverse logistics, asset recovery and sustainable processes – areas that we believe will become increasingly important in the future logistics landscape.”

Those capabilities are also helping XDel compete for larger corporate contracts.

As more companies incorporate environmental, social and governance criteria into procurement, factors such as carbon emissions, fleet efficiency, waste reduction and sustainability reporting are becoming increasingly important when selecting logistics partners.

Recognising this shift, XDel has started tracking vehicle mileage more closely to better understand its carbon footprint and identify further opportunities to reduce emissions.

EnterpriseSG director for enterprise capabilities Ong Lixia says XDel’s experience shows how investments made to improve business performance can also strengthen sustainability outcomes.

“By investing in smarter systems and greener operations, XDel has not only improved its efficiency but also positioned itself to capture new business opportunities. When done right, sustainability drives growth and is not a trade-off. This is the kind of transformation we want to encourage and support,” she says.

The company is also trialling electric vehicle usage, reporting a 75 per cent drop in monthly diesel use after converting one vehicle.

Looking ahead, XDel plans to explore artificial intelligence to automate routine processes, improve customer experience and further optimise operations.

For Lee, the lesson is straightforward.

He says: “The question is not whether you should invest, but whether you are investing with a clear purpose, scalable vision and long-term strategy.”

This story is part of a series on how companies can grow their business through sustainability, with the support of Enterprise Singapore.