Last-Mile Delivery Metrics: Key Performance Indicators for E-Commerce Success

Last-mile delivery is the final and most crucial stage of the e-commerce fulfillment process. It ensures that goods reach the customer’s doorstep from a distribution hub. This phase is key in shaping customer satisfaction and overall operational efficiency. Given its significance, businesses must optimize it to enhance logistics performance.

However, several challenges complicate last-mile delivery. Traffic congestion, fluctuating delivery windows, and failed delivery attempts can increase inefficiencies. Additionally, the growing demand for same-day and next-day shipping further strains logistics operations, driving up costs and requiring businesses to adapt quickly.

To overcome these challenges, companies must track and analyze last-mile delivery metrics to improve performance. These metrics provide valuable insights into delivery times, costs, and success rates, helping businesses refine their logistics strategies. By leveraging last-mile delivery metrics, companies can enhance route planning, minimize delays, and improve customer satisfaction. 

Measuring Success in Last Mile Deliveries

The Importance of Measuring Performance in Last-Mile Logistics

Precise measurement in last-mile delivery operations enables companies to identify inefficiencies, reduce costs, and enhance service levels. Without quantifiable data, determining whether delivery processes meet expectations becomes nearly impossible. Tracking the right metrics allows businesses to optimize routes, reduce failed delivery attempts, and improve customer satisfaction.

Last-mile logistics is the supply chain’s most expensive and complex segment, often accounting for over 50% of shipping costs. Delivery speed, accuracy, and efficiency directly impact competitive positioning. Companies that analyze their performance data generate opportunities to streamline operations, reduce delivery costs, and increase reliability.

Key Performance Indicators (KPIs) for Last-Mile Delivery

Tracking key performance indicators (KPIs) provides actionable insights for improving last-mile logistics. Businesses leverage these metrics to maintain operational efficiency and meet customer expectations. The most critical KPIs include:

Metric	Definition	Key Insights
On-Time Delivery Rate (OTD)	Percentage of deliveries completed on or before the promised time.	Low OTD signals inefficiencies in route planning or fleet management.
Delivery Success Rate	Proportion of orders successfully delivered without requiring reattempts.	Influenced by failed attempts, incorrect addresses, and recipient unavailability.
Cost Per Delivery	Average expense per completed delivery, including fuel, labor, and operations.	Lowering this metric improves profitability.
Customer Satisfaction Score (CSAT)	Evaluates delivery experience based on customer feedback and surveys.	High dissatisfaction links to delays, damaged packages, or poor communication.
Delivery Density	Number of deliveries per route within a geographic area.	Higher density reduces cost per stop by minimizing travel distance.
Failed Delivery Rate	Percentage of unsuccessful delivery attempts.	Helps identify address inaccuracies, recipient availability, and security concerns.
Average Time Per Stop	Measures efficiency of drop-offs, including unloading and verification.	Lower times improve overall operational throughput.
Package Condition Upon Arrival	Tracks reports of damaged or compromised shipments.	Indicates potential handling or packaging issues.

With real-time tracking and data analytics, businesses continuously monitor these KPIs, adjusting operations to meet performance targets and maximize efficiency.

Optimizing Delivery Time and On-Time Performance

Factors Impacting Delivery Timing

Several variables influence how quickly a package reaches its destination. Traffic congestion, weather conditions, and route inefficiencies cause unpredictable delays. Inadequate workforce allocation leads to bottlenecks during peak demand periods. Package volume fluctuations affect processing speed at distribution centers.

Customer availability introduces another layer of complexity. A failed delivery attempt increases overall transit time due to reattempts or rerouting. Additionally, regulatory constraints such as delivery time windows or restricted zones dictate schedule feasibility.

Strategies to Enhance On-Time Delivery Rates

Efficiency in last-mile logistics depends on precise coordination and technology-driven approaches. Companies achieving higher on-time percentages implement proactive planning and real-time adaptability. Key strategies include:

• Dynamic Route Adjustments: AI-powered route optimization tools analyze real-time traffic data, adjusting paths instantly to avoid congestion.
• Demand Forecasting: Predictive analytics anticipate order volume peaks, allowing efficient fleet and staffing allocation.
• Customer Communication: Proactive notifications accurately estimate delivery times, reducing missed drops and rescheduling delays.
• Time Window Optimization: Tight scheduling based on historical data ensures reduced idle time and maximized daily stops per driver.
• Driver Performance Monitoring: Telematics data tracks driver patterns, identifying areas for speed improvements or better schedule adherence.

Importance of Route Optimization for Efficiency

Route planning directly affects operational efficiency and cost control. Poorly optimized routes increase fuel expenditure and unnecessarily extend delivery time. Advanced route optimization software calculates the most efficient paths by factoring in historical data, real-time location tracking, and external variables.

Clustering techniques, which group orders by proximity to minimize travel distance, significantly benefit multi-stop deliveries. By reducing unnecessary detours, companies maximize vehicle usage and consistently maintain reliable delivery windows. Integration with GPS systems ensures live recalibrations, preventing delays caused by road incidents or last-minute customer requests.

Pro Tip: Implement AI-driven route optimization and real-time tracking to minimize delays and maximize on-time deliveries.

Decreasing Cost Per Delivery and Increasing Success Rate

Analyzing the Cost Components in Last-Mile Delivery

Every last-mile delivery operation involves multiple expenses, each contributing to the total cost per delivery. Understanding these components helps identify opportunities for cost reductions while maintaining service reliability.

• Fuel and vehicle maintenance: Delivery fleets consume fuel at varying efficiency levels, and vehicle maintenance expenses fluctuate based on usage intensity.
• Labor costs: Wages for drivers, dispatch personnel, and customer support teams represent a significant portion of delivery expenses.
• Failed deliveries: Each unsuccessful attempt increases operational costs due to redelivery and customer service handling.
• Route efficiency: Poor route planning leads to excessive mileage, fuel consumption, and delivery time extensions.
• Warehousing and staging: Storage and sorting facilities add to the overall logistics cost, especially when inefficiently managed.

Cost structures vary depending on geography, package volume, and business model, but optimizing each component lowers expenses without compromising service levels.

Approaches to Reducing Logistical Expenses While Maintaining a High Success Rate

Cutting last-mile delivery costs requires balancing expense reduction with maintaining a high first-attempt success rate. Several strategies simultaneously achieve both objectives.

• Route optimization: Advanced route-planning software minimizes unnecessary mileage, reducing fuel consumption and optimizing driver assignments.
• Automated delivery scheduling: AI-driven scheduling tools predict the best delivery windows based on customer availability, minimizing failed attempts.
• Parcel lockers and pickup points: Delivering to designated pickup locations eliminates last-mile inefficiencies and avoids multiple redelivery attempts.
• Dynamic pricing models: Offering incentives for flexible delivery slots reduces peak-time inefficiencies and reallocates capacity effectively.
• Crowdsourced delivery networks: Leveraging gig-economy drivers during peak periods eliminates excess vehicle downtime and trims labor costs.
• Improved address accuracy: Verifying customer addresses before dispatch reduces delivery failures and avoids unnecessary rerouting costs.

Cost efficiency and success rate improvements require continuous monitoring and strategic adjustments. Businesses implementing data-driven logistics enhancements maintain lower operational expenses without sacrificing customer satisfaction.

Customer Satisfaction: The Ultimate Metric

Correlating Delivery Performance Metrics with Customer Satisfaction Levels

Last mile delivery metrics directly influence customer satisfaction. Delays, missed deliveries, and damaged goods translate into negative experiences, while timely arrivals and intact packages foster loyalty. Data from a 2023 survey by Statista shows that most online shoppers consider delivery speed a key factor in their decision to shop with a retailer again.

Additionally, cost per delivery also plays a role. Customers expect low or free shipping, but cost-cutting measures must not compromise delivery quality. Efficient routing and improved delivery density reduce expenses while maintaining service reliability, supporting financial and customer satisfaction goals.

Collecting and Utilizing Customer Feedback

Customer feedback provides actionable insights. Surveys, reviews, and Net Promoter Score (NPS) assessments highlight pain points and service strengths. A 2022 report by Capgemini found that 74% of consumers will switch retailers after just one bad delivery experience.

• Survey Responses: Short post-delivery surveys gauge satisfaction and identify recurring issues.
• Customer Support Data: Frequent complaints about delays or damaged goods signal process failures.
• Review Analysis: Online reviews reveal unstructured but valuable feedback regarding delivery efficiency.
• Live Feedback Channels: Chatbots and customer service lines capture real-time concerns that might go unreported.

Companies that integrate this feedback into operational improvements see tangible benefits. Amazon, for example, uses machine learning to adjust delivery routes based on customer satisfaction trends. This results in higher retention rates and improved brand loyalty.

Improving last mile delivery metrics directly enhances customer satisfaction. Faster, more reliable deliveries translate into repeat business, positive reviews, and reduced customer churn.

Enhancing Delivery Density to Optimize Costs

Understanding Delivery Density and Its Impact on Logistics

Delivery density measures the number of drop-offs within a specific area over time. Higher density reduces cost per delivery by distributing expenses, fuel, labor, vehicle wear and tear across multiple packages. Logistics providers aim to maximize density to improve operational efficiency and profitability.

Due to concentrated demand, carriers operating in urban environments often achieve greater density. In contrast, rural deliveries require longer distances between stops, inflating operational costs. Data from McKinsey & Company indicates that delivery costs in low-density suburban or rural areas can be up to 50% higher than in high-density urban zones.

Higher delivery density benefits not just cost efficiency but also sustainability. Fewer miles traveled per package mean lower carbon emissions and better resource utilization. Crowd-shipping solutions and micro-fulfillment centers further enhance density by reducing last-mile distances.

Increasing delivery density without compromising service requires balancing operational efficiency with customer expectations. Data-driven logistics, shared networks, and innovative fulfillment models reshape last-mile strategies to optimize cost and performance.

Addressing Failed Delivery Attempts

Common Causes of Failed Deliveries in E-Commerce

Failed delivery attempts disrupt logistics operations and inflate costs. Common reasons include inaccurate address details, the recipient’s unavailability, security restrictions in residential or commercial areas, and unforeseen weather conditions.

Incorrect customer information leads to undeliverable packages. If a shipping address contains errors or lacks essential details, delivery personnel cannot complete the drop-off. Residential customers often miss their deliveries due to work schedules, while businesses may have specific receiving hours that limit access. Gated communities and office complexes frequently impose restrictions that prevent couriers from having direct access.

Weather conditions, such as heavy snow or flooding, create unexpected hindrances. Traffic congestion in urban areas further complicates delivery schedules, increasing the likelihood of missed attempts.

Tactics to Minimize Failed Delivery Attempts

Optimizing delivery success requires strategic interventions. Address validation at checkout reduces errors before packages even leave the warehouse. Integrating real-time address verification software ensures that customers enter accurate and deliverable addresses.

• Flexible Delivery Windows: Customers can choose preferred delivery time slots, which reduces missed attempts.
• Real-Time Communication: Sending SMS or app notifications with tracking links provides recipients with timely updates and delivery ETAs.
• Alternative Drop Locations: Offering options like nearby parcel lockers or authorized pickup points prevents repeat delivery failures.
• On-Demand Rescheduling: Enabling same-day or next-day rescheduling through digital platforms ensures successful handovers.
• Driver Communication Tools: Empowering drivers with in-app chat functionality helps them coordinate directly with recipients in case of access issues.

Implementing AI-driven route optimization further enhances efficiency. Predictive models analyze historical data to suggest the best routes, reducing delays contributing to failed attempts.

Some logistics providers leverage crowdsourced delivery solutions, allowing gig workers to complete deliveries outside regular business hours. This approach increases delivery success rates in areas where traditional couriers struggle with restricted access.

With technology and customer-centric solutions, last mile logistics can significantly decrease failed delivery attempts while improving operational efficiency.

Delivery Vehicle Utilization and its Significance

Assessing the Efficiency of Delivery Fleet Usage

Maximizing delivery vehicle utilization reduces operational costs and increases delivery capacity. A well-utilized fleet completes more deliveries per trip, minimizing fuel consumption and labor expenses. Measuring utilization involves analyzing key performance indicators such as load factor, route optimization efficiency, and idle time.

Load factor, expressed as a percentage, represents the actual cargo volume or weight ratio to the vehicle’s maximum capacity. Low load factor indicates underutilization, leading to unnecessary trips and higher costs. Route optimization efficiency determines how effectively vehicles cover delivery zones, reducing unnecessary mileage and wasted time. Idle time measures periods when vehicles remain stationary without operational activity, signaling inefficiencies in scheduling or dispatching.

Companies track these KPIs through telematics systems, GPS monitoring, and dynamic dispatching software. A comprehensive approach identifies bottlenecks in fleet deployment and enables data-driven decision-making.

Techniques to Improve Vehicle Utilization Rates

Optimizing utilization requires a combination of data analytics, strategic planning, and technology integration. Key techniques include:

• Dynamic Route Optimization: AI-driven algorithms adjust real-time delivery routes based on traffic conditions, order urgency, and package density. This reduces travel distance and maximizes vehicle capacity per trip.
• Load Consolidation: Grouping deliveries with similar destinations increases the load factor, decreasing the number of trips required. Advanced warehouse management systems assist in efficient package bundling.
• Flexible Fleet Composition: The fleet’s mix of vehicles, including bicycles, vans, and electric trucks, allows it to match demand fluctuations and access areas with regulatory restrictions on larger vehicles.
• Time Slot Optimization: Assigning prioritized deliveries to specific time slots enhances fleet scheduling, balancing workload distribution across shifts.
• Reverse Logistics Integration: Combining outgoing deliveries with return shipments optimizes backhaul efficiency, eliminating empty vehicle runs.

Implementing these strategies increases the number of successful deliveries per mile traveled, reduces fuel costs, and enhances overall last-mile efficiency.

Pro Tip: Maximize load factor and optimize routes with AI-driven dispatching to reduce costs and boost delivery efficiency.

Analyzing Average Time per Delivery Stop

Impact of Stop Duration on Overall Delivery Time

Every second spent at a delivery stop contributes directly to the total route duration. A longer dwell time per stop reduces the number of deliveries completed within a shift, limiting overall efficiency. When the average stop duration increases from 5 to 7 minutes, a driver making 40 stops daily loses over an hour in additional time.

Traffic, parking constraints, package retrieval, and customer interactions all influence the stop duration. Urban environments tend to have higher stop times due to parking difficulties, while suburban or rural areas might experience delays caused by long driveways or gated property access. Minor inefficiencies, such as searching for the right package in a disorganized cargo hold, quickly accumulate and extend overall delivery time.

Benchmarking stop duration helps businesses assess performance against industry averages. For example, top logistics providers maintain an average stop time under 90 seconds for high-density urban areas, utilizing route optimization and vehicle organization techniques to reduce delays.

Methods for Streamlining Delivery Stops

Companies implement multiple strategies to reduce the average stop duration. Route optimization software minimizes unnecessary detours and helps drivers take the most efficient path to each destination. Real-time traffic data integration further refines estimated arrival times, avoiding congestion whenever possible.

• Pre-Sorting Packages: Organizing parcels inside the vehicle according to the delivery sequence prevents unnecessary searching and retrieval delays.
• Digital Proof of Delivery (POD): Electronic signatures and photo confirmation eliminate paperwork time and ensure quick documentation of completed deliveries.
• Alternative Delivery Methods: Lockers and drop-off points reduce stop duration by enabling secure package placement without direct recipient interaction.
• Driver Training Programs improve turnaround times by educating delivery personnel on best practices for parking, efficient unloading, and customer interactions.
• Dynamic Re-Routing: Adjusting routes mid-shift based on real-time updates ensures drivers take the shortest path to the next stop.

Companies tracking average stop duration can identify bottlenecks, set realistic performance targets, and implement time-saving measures. Reducing per-stop time by 30 seconds can create room for additional deliveries, improving speed and cost efficiency across the supply chain.

Embracing Technology Integration and Automation

The Transformative Role of Technology in Last-Mile Delivery

Technology reshapes last-mile delivery by improving efficiency, reducing costs, and enhancing the customer experience. Route optimization software shortens delivery times and minimizes fuel consumption by calculating the most efficient path in real-time. Automated dispatching systems allocate orders to drivers faster, eliminating delays caused by manual assignments. GPS tracking provides live updates, increasing operational transparency.

Machine learning algorithms analyze traffic patterns and weather conditions, predicting potential delays before they occur. Internet of Things (IoT) devices, embedded in delivery vehicles and parcels, offer real-time location insights, helping businesses monitor shipments with granular precision. These advancements ensure faster, more reliable deliveries.

Technology integration and automation redefine last-mile delivery by enhancing speed, accuracy, and efficiency. Companies leveraging these innovations achieve higher success rates while maintaining cost-effective operations.

Mitigating the Environmental Impact of Deliveries

The Eco-Footprint of Last-Mile Delivery Operations

Last-mile delivery contributes significantly to urban carbon emissions. A 2021 study by the World Economic Forum projected that emissions from last-mile deliveries could rise by 30% in major cities by 2030 without intervention. Delivery vans frequently operate in stop-and-go traffic, increasing fuel consumption and air pollution. The sheer volume of deliveries compounds this issue, especially with the surge in e-commerce.

Packaging waste further amplifies the environmental challenge. The demand for protective materials, often non-recyclable plastics, leads to landfill overflow and pollution. According to the Environmental Protection Agency (EPA), packaging accounts for nearly 30% of U.S. municipal waste. Implementing solutions that reduce emissions and waste is no longer optional, it is a necessity for sustainable urban logistics.

Sustainable Practices to Minimize Environmental Damage

• Electrification of Fleets: Replacing diesel-powered vans with electric vehicles (EVs) significantly reduces operational emissions. A study by the International Council on Clean Transportation (ICCT) found that EVs produce up to 70% fewer greenhouse gas emissions than traditional delivery vehicles over their lifetimes.
• Micro-Fulfillment Centers: Locating fulfillment hubs closer to customers reduces the distance traveled per delivery. This shift cuts fuel consumption and accelerates delivery speed. Retailers like Walmart and Amazon integrate micro-fulfillment into their supply chains to enhance efficiency and sustainability.
• Route Optimization Software: Advanced logistics technology minimizes unnecessary mileage. Software solutions utilizing AI and real-time traffic data enable companies to optimize routes, reducing fuel usage and delivery times. UPS’s ORION routing system saves an estimated 10 million gallons of fuel annually.
• Alternative Delivery Modes: Cargo bikes and autonomous bots offer viable alternatives in densely populated cities. Studies from urban logistics programs show that e-cargo bikes can complete deliveries up to 60% faster than traditional vans while reducing CO₂ emissions by over 90% per delivery.
• Sustainable Packaging Solutions: Brands invest in recyclable and biodegradable packaging to reduce waste. Companies like Dell and Unilever have incorporated mushroom-based and compostable materials to replace conventional plastic cushioning.

Adopting these measures reduces the environmental impact of last-mile delivery while enhancing operational efficiency. Companies that integrate sustainability into their logistics strategies lower costs and appeal to environmentally conscious consumers.

Scalability and Flexibility of Delivery Solutions

Preparing for Demand Fluctuations in E-Commerce

E-commerce demand can surge and decline unpredictably, influenced by seasonal trends, promotional events, and market dynamics. A rigid last mile delivery system struggles to accommodate sudden spikes, leading to delays and inefficiencies. A scalable solution ensures capacity expands or contracts as needed without excessive costs or underutilized resources.

Dynamic routing algorithms help carriers adjust real-time delivery schedules, ensuring optimal resource allocation. Companies employing these technologies reduce delivery vehicle idle time and maximize fulfillment speed. Cloud-based logistics management platforms enhance adaptability by integrating demand forecasting and automated dispatching, allowing businesses to preempt congestion and optimize capacity usage.

Third-party logistics (3PL) providers offer additional flexibility by allowing companies to scale operations without heavy warehouses, vehicles, or personnel investments. By leveraging a hybrid approach—combining in-house fleets for regular demand and external partners for peak periods—businesses maintain service efficiency without excessive overhead during off-peak times.

Flexible Delivery Solutions to Accommodate Business Growth

Businesses expanding their delivery reach require adaptable logistics frameworks. A rigid distribution network limits growth potential, whereas flexible last mile solutions enable seamless regional expansions and service diversification. Localized micro-fulfillment centers reduce transit time by keeping inventory closer to end-users, enhancing responsiveness without burdening centralized warehouses.

Subscription-based logistics models offer further elasticity. Companies utilizing dynamic carrier partnerships avoid tying growth to a single provider, adjusting between multiple couriers based on cost, speed, and reliability factors. This approach allows businesses to experiment with new delivery methods—such as drone or autonomous vehicle deliveries—as they scale, without disrupting core logistics processes.

• AI-driven demand prediction: Enhances preparedness for volume spikes, preventing bottlenecks.
• Hybrid fleet strategies: Balances owned and outsourced resources to maintain efficiency.
• Micro-fulfillment expansion: Positions inventory strategically to reduce last mile costs.
• Gig economy partnerships: Provides instant scalability with an adaptable workforce.

Companies implementing flexible delivery models sustain competitive advantage by adjusting to market shifts without compromising service quality. Logistics networks must evolve to support growth, ensuring operational efficiency and cost control at every stage.

Achieving Real-Time Visibility and Tracking

Benefits of Offering Real-Time Package Tracking to Customers

Real-time package tracking eliminates uncertainty in last mile delivery. Customers see exact locations, estimated arrival times, and status updates instantly. This transparency reduces customer service inquiries and enhances the overall delivery experience.

Research data indicates that 93% of consumers expect visibility into their orders, and 47% will not reorder from a retailer after a poor tracking experience. Offering real-time tracking prevents delivery anxiety and strengthens customer loyalty.

• Reduced Customer Support Costs: Fewer tracking-related queries translate to lower operational expenses for support teams.
• Higher First-Attempt Success Rate: Customers stay informed and available when deliveries arrive, minimizing failed attempts.
• Brand Trust and Retention: Transparent order tracking reinforces reliability and encourages repeat purchases.

Live tracking also integrates with proactive notifications. Automated alerts via SMS or email provide shipment milestones, inform customers of potential delays, and adjust expectations accordingly.

Enterprise-Level Solutions for Enhanced Delivery Transparency

Large-scale logistics operations require advanced tracking solutions. GPS-enabled delivery vehicles and IoT sensors enable second-by-second updates on location, temperature (for perishable goods), and potential route disruptions.

• Telematics Systems: These devices collect vehicle performance data, optimizing route efficiency and fleet utilization.
• Geofencing Technology: Automated notifications trigger when a package reaches designated locations, improving coordination.
• AI-Powered Predictive Analytics: Machine learning evaluates traffic patterns, weather conditions, and historical delivery data to refine ETAs.

Companies use APIs to integrate real-time shipment tracking directly into customer interfaces. This level of transparency reduces uncertainty and provides actionable insights for delivery teams. GPS tracking and AI-driven route optimization also minimize delays, ensuring consistent on-time performance.

Blockchain technology adds another layer of security and transparency. Immutable transaction logs prevent data tampering, assuring couriers and customers of package integrity throughout transit.

Implementing real-time tracking at scale requires investment in infrastructure. However, the long-term benefits include improved customer retention, reduced delivery failures, and optimized logistics.

 Key Takeaways

• Tracking Last-Mile Metrics: Businesses must monitor key performance indicators (KPIs) such as on-time delivery rate, cost per delivery, and failed delivery rate to optimize logistics and improve customer satisfaction.
• Route Optimization & Efficiency: AI-powered route optimization tools and demand forecasting enhance on-time delivery rates, reduce fuel consumption, and improve logistics efficiency.
• Cost Reduction Strategies: Automated delivery scheduling, parcel lockers, and dynamic pricing models help businesses cut logistics costs while maintaining a high delivery success rate.
• Customer Satisfaction & Retention: Delivery speed, accuracy, and package condition significantly influence customer experience, with poor service leading to higher churn rates.
• Technology & Automation: Real-time tracking, IoT-enabled GPS monitoring, and AI-driven predictive analytics are key to improving last-mile delivery visibility and reducing inefficiencies.

Wrapping It Up!

Tracking last mile delivery metrics determines operational efficiency, cost-effectiveness, and customer satisfaction. Delivery time, cost per delivery, success rate, and package condition influence profitability and brand loyalty. Businesses that refine these metrics see reductions in failed deliveries, improved fleet utilization, and enhanced customer retention.

Continuous optimization strengthens last-mile logistics, keeping businesses competitive in a rapidly evolving market. High delivery density, real-time visibility, and effective automation reduce costs while improving reliability. Data-driven strategies ensure scalability, flexibility, and sustainable operations.

Optimize Last-Mile Delivery Metrics with NetworkON. Track, analyze, and optimize your last-mile delivery metrics with NetworkON. With real-time visibility and automation, reduce costs, enhance efficiency, and boost customer satisfaction. Improve fleet utilization, minimize failed deliveries, and scale operations seamlessly.

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