Key Points:
- The last mile is the last stage in the eCommerce fulfillment process
- This stage of delivery is when a courier company transports an item to the customer's doorstep from the local distribution hub, like a USPS distribution center, warehouse, or Amazon fulfillment center
- The first mile refers to the transport of goods from your supplier or manufacturer to your inventory storage location
“The Final Countdown” by the Swedish rock band Europe was awarded the prestigious title of 16th Most Awesomely Bad Song Ever by VH1 Music.
A chart-topping success in 25 countries when released in 1986, the synth-driven power ballad remains a sonic staple of sporting events, bar jukeboxes, and Geico commercials. Today, when people think of Europe's music, they think of "The Final Countdown.”
Last-mile delivery is the final countdown of logistics. When customers think of shipping, they think of the last mile. After all, the last mile is the final leg of an item’s journey from the shipping distribution center to the recipient's doorstep.
Online businesses should pay attention to the last mile because it's the primary cost center for shipping. It’s also where most shipments go awry. An estimated 5-15% of packages are lost, damaged, or stolen in transit, especially in urbanized areas.
Read this blog to learn what last-mile delivery means to your business and your customers. And if you want some rockin’ good deals on shipping rates, try our free shipping rate calculator.
Table of Contents
What is Last-Mile Delivery?
The last mile is the last stage in the eCommerce fulfillment process. The courier company transports an item to the customer's doorstep from the local distribution hub, like a USPS distribution center, warehouse, or Amazon fulfillment center.
Shipping companies use distribution hubs to sort the billions of packages shipped annually before delivery to consumers. The eCommerce supply chain begins with suppliers, continues through distribution hubs, then ends in-home delivery. The last mile, aka the final mile, is the end stage of the eCommerce supply chain.
Here are the three segments of the mile-long delivery process:
- The first mile: The distribution of an item from the manufacturer or supplier to its storage location. Say you source T-shirts from China. The Ts get shipped to LA where they’re stored in your supply room, warehouse, or the fulfillment center of your third-party logistics provider (3PL). Your items can begin their journey once an order is placed.
- The middle mile: An ordered item is transported from your physical store location to the distribution hub nearest your customer in preparation for home delivery. This could be a USPS distribution depot, UPS distributions center, or an Amazon fulfillment center. International shipments must also clear customs and are transported to the foreign delivery hub. Packages are sorted according to their end-destination based on addresses and readied for final delivery.
- The last mile: The ordered item is sent from the local distribution hub to the customer via the selected courier’s delivery truck. Items are scanned at loading to update tracking details. At last, your package is delivered to the customer.
How Long Does Last-Mile Delivery Take?
Shoppers choose their timeline for the last mile when they select their shipping option at checkout.
Of course, there’s a growing pool of online buyers who expect fast and free delivery. (Thanks, Amazon). Savvy brands give shoppers options for shipping and delivery with real-time rates.
The final mile is where the courier takes possession of your item from the distribution hub and brings it to the customer.
The Challenges of Last-Mile Delivery in eCommerce
Amazon Prime set an almost impossibly high bar for eCommerce. Either satisfy shoppers’ demands for fast and free delivery or lose their business. These demands fall in the laps of shipping companies that handle final mile delivery for eCommerce brands.
Couriers, though, are struggling with the global shift to eCommerce. Historically, couriers made fewer daily stops because they were primarily business-to-business (B2B) companies. But with an estimated 100 million packages to be delivered every day by 2026, couriers are revamping their service model for billions of needy consumers. On the heels of the pandemic shakeup, it’s a tough ask.
Last-mile delivery is inefficient for couriers at present. The multiple stops along delivery routes take time. In cities, traffic congestion and delays negate the gains of nearby stops. Missed deliveries and the ever-higher rates of package loss, damage, and theft also contribute to lagging deliveries.
Couriers have partnered with USPS to fulfill deliveries on time. After all, USPS reaches millions of doorsteps every day. And it’s never out of the way for USPS to deliver a single package.
Couriers are developing new procedures and delivery methods to address their shortcomings. But changes on the horizon are little help to merchants – most of whom already pay an estimated 28% of their bottom line for final mile delivery.
All told, sellers are looking for ways to lower delivery costs and keep pace with shopper expectations at once.
4 Smart Ways to Save on Last-Mile Delivery Costs
With shoppers expecting fast and free shipping, use these five tactics to lower last-mile shipping costs.
Use Trusted 3PLs
Third-party service providers (3PLs) are outsourced companies that store inventory and coordinate last-mile delivery on your behalf. Growing merchants use 3PLs to save money on shipping and accelerate delivery lead times.
Say your eCommerce brand wants to ship to Berlin. Using a Berlin-based 3PL helps you sidestep one-off import fees, access cheaper local delivery rates, and get orders out faster. To learn more about partnering with reliable 3PLs, check out this guide to working with 3PLs.
Omnichannel Supply Chains
Omnichannel supply chains give buyers options for purchasing, obtaining, and returning items.
For example, clothing brand Banana Republic lets customers order online, in-store or in-app.
Customers have a range of pickup or delivery options, and returns can be made either in-store, online, or by phone. This helps you save on shipping both to customers and in the case of returns. Meanwhile, options for fulfillment increase the likelihood of a successful purchase experience all around.
Inventory Forecasting
Inventory forecasting uses previous purchase history and trends to predict future demand for specific inventory items. After all, only orders that are in stock can be delivered on time.
Forecasting allows you to move items to fulfillment centers nearest to customer demand, thereby accelerating delivery times and cutting last-mile delivery costs.
Discounted Shipping Rates
The easiest way to save on last-mile delivery costs is to spend less on shipping. Shipping solutions like Easyship partner with all courier companies, and give you access to pre-negotiated rates up to 70% off retail.
For example, here are the cheaper Easyship rates for shipping from New York to Denver with USPS.
As you can see, using Easyship saves you a cool 25% on the best USPS retail rates. You also get last-mile delivery tracking on all orders.
To see how much you’ll save on your next shipment, try our Free Shipping Rate Calculator. Enter your package weight and destination for an instant look at all available discounts from Easyship.
Last-Mile Delivery: The Final Countdown
What is last-mile delivery?
The last mile is when the courier transports your item from the shipping distribution hub to the customer. Amidst the shift to eCommerce and the pandemic, shipping costs and lead times have been in flux. Meanwhile, buyer expectations for fast and free delivery are inflating.
To lower your costs on last-mile logistics, try Easyship. You’ll save up to 70% off all shipping rates instantly. To start, just create your free account with Easyship.
Last-Mile Delivery FAQ
1. What does the last mile mean in shipping?
The last mile is the final leg of the delivery process. The shipping courier transports your item from the distribution hub to the customer’s doorstep.
2. Why is last-mile delivery costly?
Shipping costs have increased due to the glut of eCommerce orders and the pandemic, respectively. Shoppers are also increasingly likely to expect sellers to pay for shipping, which further adds to the cost.
3. What is the difference between Last Mile delivery and Package Carrier delivery?
Last-mile delivery is the final stage of the delivery process. Package carrier delivery is the process of delivery for a single parcel. They’re overlapping terms.
4. What is first-mile shipping?
The first mile is the start of the eCommerce supply chain. The first mile refers to the transport of goods from your supplier or manufacturer to your inventory storage location.
