Fuel is cheaper in the US, yet failed deliveries cost more

• Julien Crétin

Over the past three posts, we built a bottom-up cost model for failed last-mile deliveries: urban (€15.30), peri-urban (€22.26), rural (€42.14). All three used European benchmarks - specifically French labor costs and fuel prices.

A natural question follows: how does this model hold up in the US?

The answer is worse than expected. Despite cheaper diesel, US failed deliveries cost 67–70% more than their European equivalents across all three contexts. The reason is labor - and the gap is remarkably consistent.

This post runs the same four-component model with US inputs, compares the results side by side, and explains what drives the gap.

Why US costs are higher despite cheaper fuel

Labor is the driver. The fully loaded cost of a US delivery driver is ~$30/h vs ~€17/h in France - a 76% gap that cascades through every time-based component of the model.

Diesel is significantly cheaper in the US - but not enough to offset labor. The average US retail diesel price in 2025 was ~$3.68/gallon ($0.97/L), giving a fuel cost of approximately $0.11/km. The French average was €1.62/L, giving €0.18/km. The US fuel advantage (~39% cheaper per km) is real, but modest relative to the labor gap.

The reason for the price difference is structural: US federal and state fuel taxes represent ~15–20% of the pump price, vs ~60–65% in France (TICPE + TVA). Same crude oil, very different fiscal treatment.

PUDO networks are structurally limited in the US. Europe has over 500,000 out-of-home delivery points, with dense carrier-agnostic networks (Pickup, Mondial Relay, InPost, DHL Packstations). In the US, out-of-home options exist - Amazon Locker, UPS Access Point, FedEx OnSite - but they are carrier-specific, less dense, and not structured around a merchant commission model. For most US operators, redelivery remains the dominant failure resolution path.

We include a PUDO column for the US model for completeness and comparability, but note that it applies only to operators with access to a compatible carrier locker network - which is far from universal.

US model assumptions

Parameter EU (France) US
Driver hourly wage (fully loaded) €17/h $30/h
Fuel cost per km €0.18/km $0.11/km
Vehicle depreciation per km €0.12/km $0.14/km
Dispatch/support hourly wage €15/h $26/h

Vehicle depreciation for US: IRS standard mileage rate 2025, depreciation component for light commercial vehicles, ~$0.14/km. Dispatch/support: estimated at ~$24/h gross × 1.08 employer FICA ≈ $26/h.

Urban context

Component EU Redelivery US Redelivery EU PUDO US PUDO
1. On-site failure €2.70 $4.77 €2.70 $4.77
2. Resolution path €4.30 $6.26 €2.83 $4.07
3. Route disruption €5.90 $10.43 €2.95 $5.22
4. Customer support €2.40 $4.16 €0.80 $1.39
Total €15.30 $25.62 €9.28 $15.45

The US urban redelivery cost at $25.62 is 67% higher than the EU equivalent (€15.30). The gap is almost entirely driven by the labor differential - the fuel saving over a 3 km urban detour amounts to only $0.21 per failed delivery, which barely registers.

Peri-urban context

Component EU Redelivery US Redelivery EU PUDO US PUDO
1. On-site failure €2.70 $4.77 €2.70 $4.77
2. Resolution path €9.23 $14.37 €6.45 $9.97
3. Route disruption €7.53 $13.33 €3.77 $6.67
4. Customer support €2.80 $4.85 €0.96 $1.66
Total €22.26 $37.32 €13.88 $23.07

The peri-urban gap widens further: $37.32 vs €22.26, a 68% premium for US operators. Longer detours amplify the labor cost gap - more minutes of driving at $30/h rather than €17/h.

Rural context

Component EU Redelivery US Redelivery EU PUDO* US PUDO*
1. On-site failure €4.04 $7.14 €4.04 $7.14
2. Resolution path €24.37 $40.26 €14.90 $24.55
3. Route disruption €10.13 $17.92 €5.07 $8.96
4. Customer support €3.60 $6.24 €1.20 $2.08
Total €42.14 $71.56 €25.21 $42.73

*PUDO path in rural US is even more constrained than in rural EU. Apply with significant caution.

Rural is the starkest divergence: $71.56 vs €42.14, a 70% premium.

The full comparison

Failed delivery redelivery cost — EU vs US by context (€/$) Grouped bar chart comparing EU and US redelivery costs across urban, peri-urban and rural contexts. US costs are 67-70% higher in all contexts.Redelivery cost per failed delivery — EU vs US (€/$)EUUS+67-70%€0€20€40€60€80€15.30$25.62+67%Urban€22.26$37.32+68%Peri-urban€42.14$71.56+70%Rural
Context EU Redelivery US Redelivery Delta
Urban €15.30 $25.62 +67%
Peri-urban €22.26 $37.32 +68%
Rural €42.14 $71.56 +70%
Context EU PUDO US PUDO Delta
Urban €9.28 $15.45 +66%
Peri-urban €13.88 $23.07 +66%
Rural €25.21 $42.73 +70%

The delta is remarkably consistent across all contexts and scenarios: US failed deliveries cost roughly 67–70% more than their European equivalents. The consistency of this gap confirms that the cause is structural - labor cost differential - rather than context-specific.

What this means for geocoding investment

The geocoding ROI argument is stronger in the US than in Europe - not because the underlying failure rate differs, but because the cost of each failure is higher. The same logic applies to routing: degraded coordinates add driver time on every route, not just on failed deliveries. We quantified this in a separate routing simulation on 10,000 French addresses - the mechanism and ROI structure translate directly to US operations, with labor costs amplifying the impact further.

Applying the same 20–25% address-related failure rate assumption:

US operator running 50,000 deliveries/month at 8% failure rate: - ~4,000 failed deliveries/month - ~900 attributable to address/geocoding issues - At $25.62 per urban failure: ~$23,000/month in avoidable cost - Cost of geocoding pipeline: typically $20–$200

The return is not structurally different from the European model - but the absolute dollar amounts are larger, and the business case lands harder in a market where labor costs are a daily operational pressure.

A note on model limitations for the US

Labor cost variance is higher. The $30/h fully loaded figure is a national average. In California, New York, or Washington state, driver costs can reach $35–$40/h. In rural Midwest or Southeast markets, they can be closer to $22–$25/h.

The subcontractor structure differs. In the EU, we documented the salaried vs DSP subcontractor distinction explicitly (CCN overtime thresholds, flat-fee margin loss). In the US, the DSP model dominates Amazon's network, while FedEx Ground relies heavily on independent service providers and UPS uses a mix of Teamsters-represented drivers and contractors. The cost absorption mechanisms differ but the underlying economic logic holds regardless of employment structure.

This post completes the four-part series on failed delivery costs. For the full picture: urban EU, peri-urban EU, rural EU, and this EU vs US comparison.

Want to run the numbers on your operation?

Whether you're operating in Europe or the US, the ROI on address quality is substantial. We'd be happy to talk through how geocoding quality affects your specific setup.

Coordable builds multi-provider geocoding pipelines that surface address issues before dispatch, not after. Get in touch if you want to see what this looks like with your own labor costs and route structure.

Sources and assumptions

  1. US driver hourly wage ($30/h fully loaded) - BLS, Occupational Employment and Wage Statistics: Light Truck Drivers, May 2024: median $44,140/year (~$21/h gross). BLS, Employer Costs for Employee Compensation, December 2025: benefits average 29.9% of total compensation for private sector workers. $21/h × 1.43 ≈ $30/h.

  2. EU driver hourly wage (€17/h fully loaded) - CCN Transport routier logistique, May 2025: €11.91–€19.27/h gross. Employer contributions ~30% (Urssaf, 2025). €12.50 × 1.30 ≈ €17/h.

  3. US fuel cost ($0.11/km) - Average US retail diesel 2025: ~$3.68/gallon ($0.97/L). LCV consumption: 11L/100km. $0.97 × 0.11 = $0.11/km.

  4. EU fuel cost (€0.18/km) - Average diesel price France 2025: €1.6186/L (prixdubaril.com / Ministry of Ecological Transition, January 2026). €1.62 × 0.11 = €0.18/km.

  5. US vehicle depreciation ($0.14/km) - IRS standard mileage rate 2025, depreciation/maintenance component for light vehicles, converted from per-mile to per-km.

  6. EU vehicle depreciation (€0.12/km) - French fiscal mileage allowance 2024–2025 (BOFiP, BOI-BAREME-000003).

  7. US dispatch/support wage ($26/h) - Estimated at ~$24/h gross (BLS Office and Administrative Support, 2024) × 1.08 employer FICA ≈ $26/h.

  8. US fuel tax differential - US federal + state diesel taxes: ~15–20% of pump price (EIA / Tax Foundation). French TICPE + TVA: ~60–65% (Ministry of Ecological Transition).

  9. PUDO network comparison - nShift, EU Parcel Locker Growth in 2025, 2025 (500,000+ EU OOH points). US carrier-specific networks: Amazon Locker, UPS Access Point, FedEx OnSite - fragmented, carrier-specific.

  10. First-attempt failure rate (8%) - Composite estimate, last-mile industry reports 2021–2025.

  11. Address-related failure rate (20–25%) - Composite estimate, industry studies 2021–2024.

  12. Geocoding pipeline cost - Estimated using an open-source geocoder (BAN in France, equivalent national APIs elsewhere) as primary, with a premium provider (Google Geocoding API, ~$0.005/address) triggered only on addresses where the primary confidence score falls below threshold - roughly 15-20% of a typical address file. This cascading approach is the architecture Coordable is built around: coordable.co.