Last Mile Delivery Market - 2025: Extensive Analysis of Key Driving and Restraining Factors

The movement of goods from a distribution center to the end-user which is usually the last delivery destination is known as last mile delivery. The focus of last mile delivery companies is mainly on delivery of good to the end-user as fast as possible. The most efficient and cost-efficient manner of shipping is the transportation of goods through rail networks and container ships. However, goods arrive at high capacity ports, they must be transported to the last destination. This last phase of the supply chain is less efficient and comprises a major part of total cost to move goods from transportation hub to destination and this problem is termed as Last Mile Problem.

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Retailers should take measures to prepare transportation for fluctuations in traffic caused due to the expected rise in online sales. Retailers have started the search for alternatives to meet the customers need as traditional methods of delivery are not successful in all the regions. Transportation partners have started looking for delivery alternatives such as local regional carriers, drones, click-to-collect locations, and others, to provide faster last mile delivery.

Leading automobile companies are coming up with innovation in the last mile delivery market that are to be commercialized in future. For instance, Volkswagen has started an innovation We, which is now in testing phase in Berlin and is expected to be launched once all the phases of testing are completed. This technology will be launched in partnership with DHL, a leading logistics company, allowing delivery of goods in boot of cars offering a solution for the cases where customer is not present at the time of delivery. In addition, "Vans & Drones" and "Vans & Robots" are projects by Mercedes-Benz in which drones deliver packages to the landing sites or vans roof. This system is developed in partnership with a drone start up company from silicon valley, Matternet.

Factors such as increase in trading activities due to globalization, surge in e-commerce industry operations, and rise in popularity of Omnichannel retailing are driving the growth of last mile delivery market. However, road congestion in urban areas and rise in cost of operation due to high fuel prices is expected to hamper the growth of the market.

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The global last mile delivery market is segmented based on service type, vehicle type, delivery time, topography and region. Based on service type, the market is categorized into Business-to-Business (B2B), Business-to-Consumer (B2C ), and Customer-to-Customer (C2C). Vehicle type is further classified as motorcycle, light commercial vehicle, heavy commercial vehicle, and drones. Delivery time is divided into regular delivery, and same-day delivery. Based on topography, the market is segregated into rural, low density cities, medium-density cities, and high-density cities. Based on region, the last mile delivery market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

The key players of the last mile delivery market analyzed are United Parcel Service of America, Inc., FedEx Corporation, USPS (United States Postal Service), XPO Logistics Inc., DHL International GmbH, Ryder System Inc. / MXD Group, Schneider National Inc., J.B. Hunt Transport Inc., ArcBest Corporation, SEKO Worldwide LLC (SEKO Logistics), and others.

Last Mile Delivery Market Segmentations:

By Service Type

• Business-to-Business (B2B)
• Business-to-Consumer (B2C)
• Customer-to-Customer (C2C)

By Vehicle Type

• Motorcycle
• Commercial Vehicle
• Drones

By Delivery Time

• Regular delivery
• Same-day delivery

By Topography

• Rural
• Low-density cities
• Medium density cities
• High density cities

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