The Last Mile: Navigating the Fast Lane of Delivery Logistics

Last mile delivery is the last leg of the supply chain, and for delivery drivers, it can be deadly– in the past 18 months, three delivery drivers in the U.S. have died from heat exhaustion while on the job–as recently as August 2023. There is an urgency to address challenges faced in this segment, and as e-commerce is expected to dominate this market for the foreseeable future,  companies are investing in improving their last mile logistics. 
 

Costly and Vital:

The last mile delivery process, which takes goods from the manufacturers’ base to the consumer's doorstep, is both vital and costly. It accounts for a substantial 53% of total delivery costs, carries a significant carbon footprint, and demands the most time. Most importantly, it plays a pivotal role in customer satisfaction– 46% of consumers ranked reliability as a top consideration when choosing a retailer.
 

Explosive E-Commerce Growth:

This e-commerce explosion has sent us hurtling toward a future of nearly instant doorstep deliveries. By 2025, annual e-commerce revenue is projected to soar to $6.95 trillion on a global scale – up from $2.45 trillion in 2017. The Global Last Mile Delivery Market is valued at U.S. $79.9B in 2023 and is expected to grow over 8.1% from 2023-2030, according to a recent market report by RationalStat. A key player in this growth, the U.S. is set to witness a remarkable 54.59% surge in revenue (2023 and 2027), to reach an astounding $1.6 trillion.  
 

Geotab Insights:

Fleets are embracing technology to improve their performance. The integration of technology, like route optimization, GPS tracking, real-time analytics, can benefit last mile delivery logistics by improving safety, sustainability and the speed of delivery. However, increasing demand for goods is leading to more vehicles on the road, and vehicles are stopping more often. Geotab has conducted assessments of last mile delivery trends across North America, revealing exponential growth:

• Manhattan has witnessed a remarkable 55% increase in the number of stops on last mile delivery routes, accompanied by a 46% rise in the number of vehicles making these deliveries.
• Chicago has experienced a 116% surge in the number of stops, with an 82% increase in the number of vehicles dedicated to last mile deliveries.
• Phoenix recorded a 58% growth in the number of stops, along with a 22% rise in the number of last mile delivery vehicles.
• Houston had a notable 29% rise in stops along last mile delivery routes, coupled with a 39% increase in the number of fleet vehicles responsible for deliveries.

Harnessing Tech:

Emerging technologies will help those who use them to address:

1. Noise Pollution and Traffic Congestion: The surge in last mile delivery vehicles can benefit from route optimization and real time logistics planning to reduce congestion. Electric vehicles have the added advantage of being quieter to operate.
2. Safety Concerns: Route optimization, real-time analytics can create a better environment to plan deliveries, reducing congestion and the risk of accidents.
3. Infrastructure Wear and Tear: Transportation authorities can tap into aggregated data insights to understand where and why to prioritize areas of their road network first.

Despite its challenges, last mile delivery is certainly not immune to finding symmetry with several top-tier solutions:

1. Smart Urban Planning: Invest in smart urban planning that promotes efficient transportation routes, dedicated bike lanes, and pedestrian-friendly infrastructure.
2. Green Delivery Solutions: Encourage the use of electric or low-emission vehicles for last mile delivery, offering incentives and implementing regulations to foster eco-friendly methods.
3. Community Engagement: Involve city residents in the decision-making process, gathering input to create delivery solutions that align with community needs and preferences.
4. Leverage Aggregate Data: Pinpoint trouble areas, like congestion hotspots, allowing for informed and efficient decision-making.

Last mile delivery challenges can be met head-on with telematics, providing real-time visibility, optimization capabilities, and data-driven insights. It's the foundation of urban planning and the key to painting the future of our cities. For more information please visit: intelligent transportation analytics.
 

-Nate Veeh, Senior Business Development Manager, Geotab