Last mile delivery is the final and critical step in the delivery process that involves transporting goods from a transportation hub to their final destination, usually a customer’s doorstep.
With the surge of e-commerce, last mile delivery has become an essential aspect of the logistics industry, and companies are continually looking for ways to improve their delivery speed, efficiency, and customer satisfaction.
In this blog post, we’ll explore last mile delivery statistics that shed light on this crucial aspect of the supply chain.
Key Last Mile Delivery Statistics 2023 – MY Choice
- The global last mile delivery market is projected to reach $55.2 billion by 2025, with a compound annual growth rate (CAGR) of 16.7%.
- In the US, last mile delivery accounts for up to 53% of a product’s total shipping cost.
- The average cost of last mile delivery in the US is $1.50 per mile.
- The top three industries using last mile delivery services are healthcare, retail, and food and beverage.
- In 2020, last mile delivery saw a surge in demand due to the COVID-19 pandemic, with a 46% increase in demand for same-day delivery services.
- The average delivery time for last mile delivery is 3-5 days, but with the rise of same-day and next-day delivery, consumers are increasingly expecting faster delivery times.
- Last mile delivery providers are increasingly using technology like artificial intelligence and autonomous vehicles to improve delivery efficiency and reduce costs.
- Environmental concerns are also driving innovation in last mile delivery, with the use of electric and hybrid delivery vehicles on the rise.
- In the US, the last mile delivery market is dominated by three major companies: Amazon, UPS, and FedEx.
- In a survey of 2,000 US consumers, 87% said that delivery speed was a key factor in their decision to purchase from an online retailer.
Last Mile Delivery Stats
|Global ePharmacy market value by 2026||$177 billion|
|Rise in global ePharmacy market value than current market value||643%|
|Delivery robots market size and share in 2020||$17.13 billion|
|Delivery robots market size and share expected in 2026||$55 billion|
|Expected growth of delivery robots market||20.4%|
|Last mile delivery market growth in North America from 2021 to 2025||16% annually|
|Market growth in the US during COVID-19 pandemic||More than doubled|
|Historical growth of the US market||8% annually|
|Market share of DoorDash in San Jose, Houston, Philadelphia, and San Antonio as of May 2021||Prevailed|
|Market share of Uber Eats and Postmates in Los Angeles and New York City as of May 2021||Led|
|Global last mile delivery market size in 2020||$39,570 million|
|Global last mile delivery market size projected in 2026||$66,000 million|
|Expected CAGR of global last mile delivery market during 2021||8.9%|
|Autonomous last mile delivery market size in 2021||$11.90 billion|
|Autonomous last mile delivery market size projected in 2030||$84.72 billion|
|Expected CAGR of autonomous last mile delivery market||24.4%|
|Global first and last mile delivery market size in 2019||$335.3 million|
|Global first and last mile delivery market size expected by end of 2026||$592.4 million|
|Expected CAGR of global first and last mile delivery market during 2021||8.4%|
|Market share of 50 lbs ≤ weight < 100 lbs in North America last mile delivery for large items market in 2018||41%|
|Last mile delivery for ecommerce market size in 2020||$4043.1 million|
|Last mile delivery for ecommerce market size projected in 2026||$7046.1 million|
|Expected CAGR of last mile delivery for ecommerce market during 2021||9.7%|
|Market share of Indonesia in 2019||32.60%|
|Market share of Thailand in 2019||17.26%|
|Expected growth of last mile delivery market from 2021 to 2025||$146.96 billion|
|Expected CAGR of last mile delivery market from 2021 to 2025||15.06%|
|Self-driving taxi market growth during 2021-2025||56162.96 units|
|Expected CAGR of self-driving taxi market from 2021 to 2025||58.53%|
|Overall revenue for last mile delivery market in North America in 2018||$31.25 billion|
|Expected revenue for last mile delivery market in North America in 2023||$51 billion|
Last Mile Delivery Market Overview
- The global last mile delivery market was valued at $34.2 billion in 2020 and is expected to grow at a CAGR of 16.7% from 2021 to 2028. (Source: Grand View Research)
- The Asia Pacific region is expected to witness the highest growth rate in the last mile delivery market due to the increasing number of e-commerce players and the rising demand for same-day and instant delivery services. (Source: Allied Market Research)
|Customers who believe retailers should offer the ability to choose convenient delivery options||86%|
|Customers who say their desired delivery option is sometimes, rarely, or never available||47%|
|Customers who report that online retail companies have the delivery options they want||61%|
|Direct-to-consumer brands offering desired delivery options||46%|
|Customers who say long delivery time is the key reason for shopping in physical stores||34%|
|Customers who abandon online shopping carts due to long or unavailable shipping times||46%|
|Customers willing to pay more and buy more from companies that offer great customer experience||86%|
|Consumers who do not mind paying for faster delivery||88%|
|Professionals whose companies will compete based on customer experience||81%|
|Last mile delivery cost as a percentage of all delivery operational costs||53%|
|Organizations with optimized supply chains have lower costs than those without optimization||15%|
|Companies with agile organizations||4%|
|Companies that have started building agile delivery||37%|
|Key initiatives in operational optimization that reduce costs||up to 20%|
|Supply chains that see lack of clarity on customer demand as the biggest issue stemming from COVID||51%|
|Most common KPI for delivery logistics monitoring||Daily performance (40%)|
|Other common KPIs for delivery logistics monitoring||Cost reduction (35%), production service rate (29%), inventory turn (28%)|
|Biggest challenge faced by delivery and supply chain professionals||Visibility (21.1%)|
|Other significant challenge faced by delivery and supply chain professionals||Factoring consumer demand (19.7%)|
|Brick and mortar stores serving as distribution centers or depot locations||48.4%|
|Total transportation cost attributed to last mile delivery||53%|
|Increase in instore delivery pick up in May 2020 (YOY)||554%|
|Online deliveries returned by customers||30%|
|Instore purchases returned by customers||8.89%|
|Customers who continue to do business with companies with an easy return process||92%|
|Customers who say returning an item is a hassle or could be easier||57%|
|Customers willing to shop at online stores that offer in-store returns||62%|
|Shoppers who check the return policy page before making a purchase||67%|
|Shoppers who want a no-questions-asked return policy||58%|
|Shoppers who expect to see a return label on their purchase||47%|
|Biggest reason customers return an item||Receiving the wrong item (23%)|
|Other significant reasons customers return an item||Receiving a different item than their order (22%), receiving a damaged item (20%)|
|Customers who want free return shipping||79%|
|Retail companies offering free return shipping||49%|
|Customers willing to spend over $1,000 if offered free returns with their purchase||27%|
|Retail companies considering reverse logistics an important asset||60%|
|Retail companies with an effective solution for managing reverse logistics||32%|
|Last mile delivery cost as a percentage of overall logistics cost||50%|
|Last mile logistics operators who consider ensuring customer experience their top concern||53%|
|Increase in customer concern about delivery after two to three late deliveries||55%|
Delivery Speed and Efficiency
- The average last mile delivery time in the United States is 1.7 days. (Source: McKinsey & Company)
- In 2020, Amazon delivered 3.5 billion packages worldwide, with an average delivery time of 3.8 days. (Source: Statista)
- Same-day delivery is the fastest-growing segment in last mile delivery, with a CAGR of 22.4% from 2021 to 2028. (Source: Grand View Research)
- Drones and autonomous vehicles are expected to play a significant role in last mile delivery, with a potential cost savings of up to 50% compared to traditional delivery methods. (Source: McKinsey & Company)
- According to a survey, 67% of customers expect real-time tracking of their deliveries, while 47% want estimated delivery times. (Source: Convey)
Customer Satisfaction and Preferences
- A survey found that 97% of customers consider delivery speed to be essential, and 54% of customers have abandoned their carts due to slow delivery times. (Source: Business Insider)
- Free shipping is a critical factor in customers’ purchasing decisions, with 88% of customers willing to wait longer for delivery if it’s free. (Source: MetaPack)
- A survey found that 60% of customers prefer to receive deliveries during the evening or on weekends. (Source: Dropoff)
- Customers are willing to pay an average of $5.10 for same-day delivery, with 45% of customers willing to pay more for faster delivery. (Source: Convey)
Last Mile Delivery Challenges and Opportunities
While there are many opportunities for growth in the last mile delivery market, there are also significant challenges that need to be addressed. Here are some of the most pressing challenges, along with potential solutions:
Traffic Congestion and Urbanization
As more people move to urban areas, traffic congestion is becoming a major challenge for last mile delivery companies. One potential solution is to use smaller, more nimble vehicles like bikes and scooters to make deliveries in dense urban areas.
Theft and Package Security
Package theft is a major concern for both customers and delivery companies. To combat this, companies are implementing solutions like package lockers, secure delivery boxes, and real-time package tracking.
Labor Shortages and the Gig Economy
Finding and retaining qualified delivery drivers is a major challenge for last mile delivery companies. To address this, some companies are turning to the gig economy and partnering with independent contractors to make deliveries.
High Delivery Costs
The cost of last mile delivery can be high, particularly for smaller retailers. To address this, some companies are turning to solutions like crowdshipping, where customers can earn money by delivering packages on behalf of retailers.
- Last mile delivery accounts for 53% of the total delivery cost, making it the most expensive part of the delivery process. (Source: McKinsey & Company)
- Traffic congestion is a significant challenge for last mile delivery, with delivery vehicles spending an average of 30% of their time stuck in traffic. (Source: McKinsey & Company)
- The COVID-19 pandemic has accelerated the shift towards e-commerce, leading to a surge in demand for last mile delivery services. (Source: McKinsey & Company)
- Sustainable delivery methods, such as electric vehicles and bike couriers, are gaining traction in urban areas, with potential cost savings of up to 30% compared to traditional delivery methods. (Source: McKinsey & Company)
Trends and Predictions for Last Mile Delivery
As the last mile delivery market continues to evolve, it’s important to stay up-to-date on the latest trends and predictions. Here are some key insights to keep in mind:
Same-Day and Instant Delivery is on the Rise
Customers are increasingly demanding faster delivery times, with same-day and instant delivery becoming more popular. In fact, a study by Dropoff found that 57% of customers have abandoned a purchase due to slow delivery speeds. Companies that can offer fast, reliable delivery will have a competitive advantage.
Use of Drones and Autonomous Vehicles is Growing
Drones and autonomous vehicles are becoming more common in last mile delivery, with companies like Amazon and UPS testing these technologies. According to a report by McKinsey, the use of autonomous delivery vehicles could reduce delivery costs by up to 40%.
Sustainable Delivery Options are a Priority
Sustainability is a growing concern for many customers, and last mile delivery companies are responding by offering more eco-friendly options. For example, companies like UPS and DHL are using electric vehicles and bikes to make deliveries in urban areas.
Increased Emphasis on Contactless Delivery
Due to the COVID-19 pandemic, there has been a greater emphasis on contactless delivery options. Customers are looking for ways to reduce physical contact with delivery drivers, and companies are responding by offering options like curbside pickup and leaving packages at the door.
As the last mile delivery market continues to grow and evolve, it’s clear that companies that can offer fast, reliable, and sustainable delivery options will have a competitive advantage. By staying up-to-date on the latest trends and addressing the most pressing challenges, last mile delivery companies can position themselves for success in the years to come.