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A Deep Dive into Last Mile Delivery

Kate Feyrer

The worldwide last-mile delivery market is forecasted to exceed 200 billion U.S. dollars by 2027, up from 108.1 billion dollars in 2020, due to the rise of online orders from eCommerce businesses, which intensified changes in the industry. Over the last few years, the industry has seen significant growth and changes because it had to meet customer needs. Nick DiNatale, CEO and founder of ShipPlug, attributes this growth to the boom in eCommerce, stating that it has prompted more businesses and delivery companies to enter the final mile delivery market. He highlighted that apps like Uber and DoorDash are now challenging traditional postal models such as UPS and FedEx by offering same-day delivery.

Table of Contents
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  • What is Last Mile Delivery?
  • What Is The Last Mile Problem?
  • Steps in the Last Mile Delivery Process
  • The Challenges of Last Mile Delivery for Logistics Companies
  • Ways to Optimize Last Mile Logistics
    • Multiple Warehouse Locations
    • Optimized Route Planning
    • Choose a Reliable Last Mile Service Provider
    • BOPIS (Buy Online, Pick Up In-Store)
    • Proof of Delivery from Drivers
  • Last Mile Delivery Trends You Shouldn’t Miss
  • Conclusion

The final leg of delivery is commonly regarded as the worst part of being costly and complicated due to the constantly changing customer expectations and the fact that they are still under the heart. All the saints, however, including e-commerce entrepreneurs, logistics managers, or supply chain practitioners, are on the right path with delivery management soft wares-AI technology packaging strategies as well as order tracking systems that run in real-time.

By implementing these strategies, businesses can optimize their last mile delivery systems, leading to enhanced customer loyalty, retention, and profitability. This comprehensive guide covers everything you need to know about the last mile delivery process, from dispatch to final delivery. It includes steps in the last mile delivery process, challenges faced by logistics companies, ways to optimize last mile delivery services, and essential industry trends.

Additionally, understanding the various types of last mile delivery is crucial for businesses looking to streamline their operations. Types of last mile delivery include traditional courier services, on-demand delivery via apps, and even innovative solutions like drone delivery. Each type offers unique benefits and challenges, making it essential to choose the right method based on your specific needs.

As the industry evolves, the importance of efficient last mile shipping cannot be overstated. Last mile shipping involves the final transit of goods from a transportation hub to the final delivery destination, often a personal residence or business. By optimizing last mile shipping, companies can significantly reduce costs and improve delivery times, ultimately enhancing the overall customer experience.

What is Last Mile Delivery?

Last-mile delivery is the final stage of the shipping process, where packages are delivered to customers’ homes or businesses. This phase is often the most expensive and time-consuming part of the journey, demanding specialized expertise and equipment. Companies specializing in last-mile delivery focus on ensuring packages reach their destinations quickly and efficiently. This aspect of delivery has gained increased importance in recent years due to the surge in e-commerce sales. As online shopping continues to grow, the need for enhanced last mile delivery visibility has intensified. Consequently, businesses have experienced a boom, making the process of getting packages from point A to point B faster and more streamlined than ever before.

What Is The Last Mile Problem?

The last mile problem arises from the increasing demand for real-time tracking and precise delivery information by customers. This issue is particularly evident when a package shows as “out for delivery,” but the customer still faces long waits before actually receiving it. In essence, the last mile problem refers to any delay occurring from the moment a package leaves the distribution center until it reaches the customer. These delays often stem from multiple stops and various hindrances in the final mile delivery stage, failing to meet customer expectations.

Sarah Jeffries, who is the Managing Director of First Aid Course Leicester, noted how difficult it was to balance sustainable last mile delivery strategies against customer expectations. In her view With the rise of e-commerce, last mile deliveries have been highly disrupted by customer anticipations. Nowadays they expect seamless, speedy, and clear delivery systems. This change called the Amazon effect has raised this bar. Customers want to track their deliveries in real-time, know precise delivery windows, and have options for same-day or next-day deliveries.

The capability to check packages as they move in real-time is one big thing that customers look out for. In rural areas, long distances between stops can slow down delivery, posing a significant last mile delivery problem. Also, urban areas have traffic congestion and complicated map layouts that create huge problems for logistics companies making the last mile delivery problem worse.

Steps in the Last Mile Delivery Process

Ensuring a smooth last mile delivery process involves five vital steps that help keep your operations efficient and cost-effective:

  1. Order Processing: Step one in processing an order is gathering and organizing important facts regarding the customer’s purchase, such as product description, recipient’s location as well as mode of payment . Once these data have been gathered appropriately one can rest assured that there will be no hitch at any point thereafter.
  2. Order Arrival at the Transportation Hub: On arrival at the transportation hub, the order is taken over by a courier or delivery service. At this point in time, the package undergoes weighing, scanning, and accuracy confirmation.
  3. Assignment to Delivery Personnel: At the transportation hub, delivery personnel are assigned to ensure timely delivery of the package. These personnel can include contracted couriers, third-party services, or in-house staff. Assignments are based on factors such as estimated delivery time and the distance from the hub to the recipient’s address.
  4. Scanning and Loading onto Delivery Vehicle: After the package has been scanned, it is loaded onto a delivery vehicle which transports it to where it is supposed to be. This part of the process might change based on what the courier or the provider can do. There are those who provide an option for tracking the journey from start till end while this is not possible with a few others.
  5. Delivery to Recipient’s Address: The final step is delivering the package to the recipient’s address. Delivery personnel must ensure that the package arrives on time and in perfect condition. They must also verify the accuracy of the delivery by checking that the correct package is delivered to the right person and collecting a signature to complete the delivery and prevent potential fraud.

The Challenges of Last Mile Delivery for Logistics Companies

Logistics companies face several common challenges during the last mile delivery process for online retailers:

  • Rising Customer Expectations: To fulfill customer’s orders, and guarantee that they are satisfied, is the main goal for last-mile delivery. However, as world insurance associates llc principal and division sales manager Jamie Cantrell remarks, the emergence of e-commerce during covid-19 has changed the demand for online shopping. Presently, clients require shorter times of delivery, less expensive prices, and responsive client service. It is hard to meet all these requirements without making a loss in las delivery.
  • Slow Delivery Speed: One major challenge is slow delivery speed, which can lead to delays and increased costs when deadlines are not met. Last mile delivery is focused on getting goods to customers as quickly as possible, and any delay can damage the logistics company’s reputation.
  • Lost Deliveries: When there are numerous orders, it is possible for them to go wrong. In the distribution center or warehouse, just a mistake can lead to delivery at the wrong place or wrong goods reaching customers. On top of that, wrong parcels are likely to be transported to another place because of addresses that are not correct or incorrectly read labels. If such goods fall in the hands of a person who does not redirect them, they find themselves in the worst-case scenarios.
  • Returns: Returns are common in last mile delivery, often due to incorrect or damaged orders. The challenge lies in collecting the returned packages from customers and transporting them back to the warehouse. Reverse logistics are typically used to manage returns, which helps build customer trust and encourages repeat purchases.
  • Environmental Factors: Growing demand for last-mile delivery has led to the importance of environmental issues. However, bad weather could disrupt schedules for final leg logistics, making it a big challenge. Further still, customers expect that brands will reduce their environmental impact in line with rising regulatory pressures for businesses to go green.
  • Visibility and Tracking: One of the toughest challenges in last mile delivery is ensuring visibility and tracking. Logistics companies need to constantly monitor their fleet locations to ensure performance and safety. Customers increasingly demand detailed information about their packages’ whereabouts for greater transparency and satisfaction. Traditional tracking features like tracking numbers and scanning codes provide limited information. Implementing more accurate tracking features, such as estimated time of arrival and driver tracking, can enhance visibility and improve the customer experience.

Ways to Optimize Last Mile Logistics

Optimizing last mile logistics aims to balance customer satisfaction, delivery efficiency, and cost-effectiveness. Here are five effective strategies to enhance your last mile delivery process:

Multiple Warehouse Locations

One major challenge in last mile delivery is the timely delivery of packages. By establishing multiple warehouse locations in various geographical areas closer to customers, delivery times can be significantly improved, and fuel consumption reduced as drivers spend less time on the road. Companies like Shopify and Amazon are expanding into warehousing to keep their products closer to customers, facilitating fast and low-cost last mile delivery. Managing inventory across multiple warehouses ensures all items are readily available to the local market, says Nick DiNatale, CEO and founder of ShipPlug. Following this model can enhance delivery speed and increase the number of completed deliveries.

Optimized Route Planning

Inefficient or manual route planning can lead to delays and order cancellations. Utilizing last mile route optimization software like Detrack provides access to multiple routes for maximum efficiency. Detrack’s route planner can complete route planning in seconds, minimizing distance traveled, saving time, and lowering fuel consumption. This results in increased productivity and cost savings. Additionally, optimized route planning reduces your company’s carbon footprint and boosts customer loyalty. By identifying the shortest and fastest delivery routes, logistics companies can better navigate traffic congestion, bad roads, and complex urban areas.

Choose a Reliable Last Mile Service Provider

Third-party logistics providers specializing in last mile delivery can significantly improve logistics efficiency. When selecting a last mile delivery platform, ensure they track vital delivery metrics and offer features like real-time order tracking. This competitive edge allows for data-driven decisions and enhances customer satisfaction.

BOPIS (Buy Online, Pick Up In-Store)

BOPIS is a strategy that eliminates long wait times for customers by allowing them to pick up their orders from a local store. This method not only speeds up order fulfillment but also improves inventory management. Customers benefit from quicker access to their purchases, enhancing overall satisfaction.

Proof of Delivery from Drivers

Ensuring drivers provide proof of delivery can prevent conflicts and discrepancies that lead to costly returns. Proof of delivery verifies the successful completion of a delivery, protecting businesses and sellers on third-party websites from disputes by providing evidence that the item was delivered and received by the customer.

The last mile delivery industry is evolving rapidly. Staying competitive requires keeping up with these vital trends:

  1. Smart Technology for Tracking: With digital advancements on the rise, adopting smart technology for tracking customers’ packages is essential. This technology provides peace of mind to customers by keeping them informed about their package’s journey. Delivery management software like Detrack offers tracking features that are game changers, giving companies a competitive edge in a demanding market.
  2. Robotic Delivery: The delivery robot market was valued at over $500 million in 2022 and is expected to grow at a CAGR of over 25% from 2023 to 2032. Robotic delivery addresses one of the main cost issues in last mile delivery, such as driver and warehouse employee wages. By reducing these costs, last mile delivery becomes more affordable and often more efficient. Additionally, the capability to include a picture of the delivery reduces porch piracy, benefiting shippers. Nick DiNatale notes, The most successful brands will be those that provide a high-end delivery experience while remaining cost-competitive.
  3. Hybrid Fleet Management Systems: The on-demand nature of final mile delivery often leads to inefficiencies, such as driver and truck shortages and empty running trucks, resulting in delayed deliveries. The hybrid fleet management system is a trend gaining traction to address this issue. It offers businesses extra flexibility by combining their regular fleet system with third-party logistics providers to manage deliveries efficiently.
  4. Insourcing Deliveries: To reduce costs, businesses are increasingly adopting insourcing delivery, which involves handling certain delivery operations internally rather than relying on third-party providers. When managed correctly, insourcing delivery allows businesses to scale operations, minimize costs, and improve customer satisfaction through superior service.
  5. Predictive Shipping: Predictive delivery is becoming more prevalent in last mile logistics due to the increased application of machine learning. Predictive delivery forecasts future outcomes by merging historical data with statistical modeling, prediction models, available data, and machine learning algorithms. In last mile delivery, eCommerce businesses can use predictive delivery to gain vital insights, boost operations and sales, and enhance customer satisfaction.


In summary, the last mile delivery landscape is undergoing significant transformation, driven by the boom in eCommerce and rising customer expectations. Businesses can stay competitive and enhance their last mile logistics by leveraging smart technology for tracking, robotic delivery, hybrid fleet management systems, insourcing deliveries, and predictive shipping. These strategies not only address key challenges but also improve efficiency, reduce costs, and enhance customer satisfaction.

To further optimize your last mile delivery operations, consider partnering with Logity Dispatch. Our comprehensive dispatching services can streamline the last mile delivery process, ensuring timely and cost-effective deliveries. Logity Dispatch offers advanced solutions to help navigate the complexities of last mile logistics, keeping owner-operators ahead in this rapidly evolving industry.

Kate Feyrer

Kate made her first trip as an owner-operator when she was 23 years old.
Her love for big cars came from her brother, who took her on some trips and spent time with her at the auto repair shop.
Today, she is a professional truck driver who has traveled thousands of miles.
Kate loves dogs very much. In her spare time, she plays computer games.

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