Description

The global last-mile delivery market size is expected to grow from USD 34,200 million in 2020 to USD 52,340 million by 2027, at a CAGR of 10.2% from 2021 to 2027. The Last-mile delivery is the movement of goods from a transportation hub to their final destination, commonly the end user.

Last-mile delivery has emerged as a crucial transport infrastructure that shippers and retailers worldwide have gradually focused on, given the increasing imprint on revenue margins. In recent years, global e-commerce companies have made enormous investments in consolidating distribution channels to deal with the changing consumer expectations and cut down on last-mile delivery costs.

Simultaneously, various last mile carriers have proliferated for meeting the demands of small and big shippers to manage the complexity of logistics on the one hand, and eventually endowing their clients in the last-mile delivery market a competitive edge. Subsequently, several deliver-from-store last-mile services are being evaluated by shippers to offer real-time tracking options to consumers across the delivery of goods from their distribution units to final destinations.

MSG's Market Factsheet on the Global Last-Mile Delivery Market

• The e-commerce boom has sparked an increasing demand for parcel shipments, with a 10% year-on-year growth production for online retail for both Europe and US.
• 85% of Australians expect their goods delivered in three days, while 83% expect retailers to offer a same-day delivery option. With this vast demand, only 30% can give this to customers.
• The last-mile delivery can comprise up to 28% of the total transportation cost worldwide.
• The last-mile share in total parcel delivery cost is 50% in the US, making it a positive indicator for stakeholders to gain a competitive edge.
• The US last-mile delivery market is estimated at USD 9.5 billion in 2020. China, the world's second-largest economy, is forecast to reach a projected market size of USD 9.3 billion by 2027, trailing a CAGR of 7.1% from 2020 to 2027. Among the other noteworthy geographic markets are Canada and Japan, each forecast to grow at 6.1% and 7.2% from 2020 to 2027. Within the European market, Germany is forecast to grow at approximately 6.2% CAGR.
• E-commerce companies are opting for these solutions to revolutionize the last-mile delivery services in a commercial scenario. This factor has attracted several e-commerce players and parcel delivery partners such as DHL, Walmart, Amazon, Google, and UPS.

Essential Factors to Consider in Choosing a Global Last-Mile Delivery Market

Fast Delivery

This should be on the top of the list when providing the best last-mile delivery services and solutions. Consumers prefer and opt for fast delivery service, with most even choosing same-day delivery. So, if you can provide the quickest and most efficient, your assistance would be in demand.

Security and Insurance

There is a considerable risk involved whenever consumers decide to leave their purchased goods in your hands and trust you to have them delivered promptly. If you provide a guarantee that they will arrive safely, you have won half the battle. But if you offer an attractive insurance benefit on the off chance the package is mishandled, you are most likely going to get your business going.

This is the reason why courier companies add a relatively low surcharge for insurance, with some offering a warranty already included in their rates up to a certain amount in case the goods are damaged or lost during transit. This kind of guarantee puts your customers at ease and eventually boosts your trust rating.

Precise Order Tracking

The information flow within the last-mile delivery process is crucial, particularly for consumers since they want to know their delivery status. While conventional courier services provide a general indication of where the goods are, a more precise real-time tracker is what consumers want.

Convenience

Gone are when customers would have to bring their parcels to the post office to have them shipped. Since then, it has become more convenient, with courier companies putting up satellite branches in strategic locations for easier access. And while all this is great, technology has now changed the game with apps that took the service to a whole new level of convenience.

Despite having all these factors that could help consumers determine if you are up to the job, you must still address many challenges to be an effective last-mile delivery service provider.

Specialization

At the very least, there should be one feature about your service that sets you apart from the competition. A few more specializations wouldn't hurt, too.

Ultimately, all these add-on services could considerably put you ahead of even the most popular standard courier services that are taking a massive chunk of the market. And once your unique offerings start to gain traction, more consumers will eventually acquire your services.

Global Last-Mile Delivery Market Challenges

As earlier stated, the last leg of this logistics process is no walk in the park, but to become effective, you must first identify these issues to tackle them more effectively.

Transparency

Consumers would always like to be in the know when it involves the items they purchase. This rings particularly true in the logistics industry, where traditional companies started using tracking codes to give their customers information on their delivery status.

In this era where technology rules, tracking codes just don't cut it with customers anymore. They want full disclosure on where their delivery is in real-time so that they know when it's going to arrive.

Efficiency

The nature of last-mile delivery has proved to be a challenge mainly because of the sheer volume of end-users the parcels need to be delivered to. This service would require a massive fleet of vehicles, each driven by personnel needed.

Until recently, it has seen a glimmer of hope in this sector, and we have advances in technology to thank for this.

Cost

Due to its inefficiency, the last mile delivery section of the whole logistics process can be an expensive operational cost. With the vast undertaking involved to send each package to its end user, this is easily one of the biggest challenges of last-mile delivery.

Scope of the Report

The study categorizes the global last-mile delivery market on the basis of range, business, application, and vehicle type at the regional and global levels.

By Range (Revenue, USD Billion, 2017-2027)

• Short Range (< 20 km)
• Long Range (> 20 km)

By Business (Revenue, USD Billion, 2017-2027)

• B2C
• B2B
• C2C

By Application (Revenue, USD Billion, 2017-2027)

• Logistics
• Healthcare & Pharmaceuticals
• Food & Beverages
• Retail
• Others

By Vehicle Type (Revenue, USD Billion, 2017-2027)

• Drones
• Semi-Autonomous Ground Vehicles
• Autonomous Ground Vehicles
• Droids
• Others

By Region (Revenue, USD Billion, 2017-2027)

• North America (US, Canada, Mexico)
• South America (Brazil, Argentina, Colombia, Peru, Rest of Latin America)
• Europe (Germany, Italy, France, UK, Spain, Poland, Russia, Slovenia, Slovakia, Hungary, Czech Republic, Belgium, the Netherlands, Norway, Sweden, Denmark, Rest of Europe)
• Asia Pacific (China, Japan, India, South Korea, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, Cambodia, the Philippines, Singapore, Australia & New Zealand, Rest of Asia Pacific)
• The Middle East & Africa (Saudi Arabia, UAE, South Africa, Northern Africa, Rest of MEA)

North America accounts for the highest market share during the forecast period

Based on the regions, the global last-mile delivery market has been segmented across North America, Asia-Pacific, Europe, South America, and the Middle East & Africa. North America has been a notably lucrative last-mile delivery market. A growing number of collaborations among players for shared delivery logistics and a steady expansion of warehouses and logistics are critical propellers of revenue generation in the regional market. The Asia Pacific is also emerging as a hotbed of opportunities. The rise in e-commerce sales is crucial for new revenue streams in the Asia Pacific last-mile delivery market.

Key Market Players

E-commerce companies are aiming at various delivery innovations to position them uniquely in the minds of consumers, thus expanding the profitable avenues for players in the last mile delivery market. Growing investments in automated customer fulfillment centers and real-time inventory tracking software are two examples.

The use of bots and drones has opened a new proposition for market players to capture value from customers and consumers in the last-mile delivery market. Especially during the pandemic outbreaks, these technologies made contactless delivery of essential items a viable last-mile delivery model in various countries.

On the other hand, AI-based delivery robotics companies are climbing on the bandwagon to offer retailers and e-commerce companies subsidize deliveries and offer competitive gains to early adopters. A startup aiming at automating industrial, urban, and rural logistics, TeleRetail, is keen on capitalizing on the avenue. Such developments expand the prospect in the last-mile delivery market.

Some companies are striving to adopt technologies that enable them to reduce the carbon footprint across last-mile delivery. FedEx Corporation, a prominent player, focuses on offering FedEx Ground to optimize last-mile residential deliveries of heavy goods with safety and sustainability in mind.

The leading last-mile delivery market companies include Ekart Logistics, Amazon.com, XPO Logistics, FedEx Corporation, DHL International GmbH, United Parcel Service of America, Inc., China Post Express Logistics Co. Ltd, Cainiao Logistics, STO Express Co. Ltd, and Deppon Logistics Co. Ltd.

Recent Development

• In November 2021, the online grocer and technology firm Farmstead announced that it has partnered with national real estate companies and multiple national last-mile delivery services to create the first end-to-end same-day e-commerce operations solution for grocers.
• In October 2021, Logistics startup Shadowfax Technologies launched delivery SuperApp to help riders access all companies through one app without registering themselves individually with each company. The SuperApp is specifically designed to address this issue and aid convenience for the delivery partners.
• In October 2021, Mesa Air Group, Inc. signed an agreement with aerospace technology company Flirtey to order four delivery drones, with an option to order an additional 500 aircraft. The deal marks Mesa becoming the first scheduled airline to launch drone delivery in the US. Mesa and Flirtey are initially focusing on the last-mile food delivery industry, enabling Mesa to expand beyond the global airlines market and into the global foodservice market.

Key Issues Addressed

• What is the market size by various segmentation of the last-mile delivery by region and its respective countries?
• What are the customer buying behavior, key takeaways, and Porter's five forces of the last-mile delivery market?
• What are the key opportunities and trends for manufacturers involved in the last-mile delivery supply chain?
• What are the fundamental dynamics (drivers, restraints, opportunities, and challenges) of the market?
• What and how are regulations, schemes, patents, and policies impacting the growth of the market?
• What are the upcoming technological solutions influencing market trends? How will existing companies adapt to the new change in technology?
• The market player positioning, top winning strategies by years, company product developments, and launches will be?
• How has COVID-19 impacted the demand and sales of last-mile deliveries in the global market? Also, the expected BPS drop or rise count of the market and market predicted recovery period.
• Detailed analysis of the competitors and their latest launch, and what are the prominent startups introduced in the target market? Also, detailed company profiling of 25+ leading and renowned companies in the market.