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The last mile delivery market is estimated to grow by USD 60.82 billion at a CAGR of 5.12% between 2023 and 2028. The growth of the market depends on several factors, including the growing global e-commerce industry, premiumization of goods and merchandise delivery, and a growing number of warehouses.
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Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing global e-commerce industry is the key factor driving the market growth. Due to the rise of e-commerce, the market has experienced significant growth in recent years. The e-commerce industry in China and the US is growing rapidly. For instance, e-commerce retail sales in the US increased by 39% in Q1 2021 over that in Q1 2020, whereas total retail sales showed a growth of only 16.4% in Q1 2021. Similarly, China is home to a large number of e-commerce players, which significantly contributes to the growth of the B2B last-mile delivery segment.
Currently, some of the major logistics providers, such as XPO Logistics, also provide last-mile delivery services and deliver around 13 million packages in a year. Last-mile deliveries account for a significant portion of this market share. The online retail market in North American countries is expected to witness continuous growth and investments during the forecast period. This will increase the demand for services during the forecast period.
A strong focus on offering services to specific end-user segments is the primary trend shaping market growth. Logistics services companies have started operating new logistics supply models for the medical and pharmaceutical sectors in response to the growing challenges in the healthcare industry. These include the rising cost pressure on medical devices due to the growing demand from the aging and active population. For instance, DHL's supply chain arm has introduced advanced logistics solutions for the medical devices and healthcare industry, which bring together field inventory, valuable medical devices, and quality management systems at a single location to ensure better traceability and control over shipments. Additionally, the demand for fast and efficient delivery services has led to the adoption of technologies such as drones and autonomous vehicles.
In addition, this model reduces the need to actively maintain and operate a large stock of medical devices. All critical medical devices are provided at the last mile and on a same-day delivery basis. This supply chain model is already being utilized by major medical device vendors across North America and is expected to grow further, which, in turn, will drive market growth and trends during the forecast period.
The operational challenges faced by companies are hindering market growth. A key challenge associated with last-mile delivery operations is to provide transparency and improve delivery efficiency while maintaining profitability. Long-distance transportation (logistics) is mainly carried out in bulk via sea, rail, and road, which results in lower delivery costs. However, last-mile delivery requires separate deliveries to many locations within a region, thereby increasing logistics costs.
Furthermore, real-time tracking requires additional geolocation-related infrastructure and the use of technologies such as radio frequency identification (RFID) sensors and the generation of tracking codes at each delivery station. These technologies are expensive, which leads to further escalation in the delivery charges. Thus, the operational challenges faced by last mile delivery companies are expected to impede the growth of the market during the forecast period.
The market research and growth report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market growth analysis report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The B2C segment is estimated to witness significant growth during the forecast period. B2C-type last-mile delivery refers to the delivery of various parcels and goods from adjacent transportation hubs to consumers. In most cases, last-mile delivery involves the direct delivery of goods to consumers' homes. The B2C segment consists of the delivery of small and lightweight products, unlike B2B delivery. With the increasing sales of products through e-commerce sales channels, the importance of last-mile delivery is growing significantly.
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The B2C segment was the largest segment and was valued at USD 96.08 billion in 2018. The growth of the B2C services market has also encouraged last-mile service delivery operators to introduce new services that are specifically designed for residential customers. Such services include next-day delivery, same-day delivery, and parcel returns. B2C customers also have the option of availing of real-time shipment tracking and package delivery status updates. Thus, such emerging trends will positively impact the growth of the market through the B2C segment during the forecast period.
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APAC is estimated to contribute 46% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. China is a major revenue contributor in APAC. This is attributed to the e-commerce market in China, which is the fastest-growing in APAC. For instance, e-commerce sales in China grew at a rate of 28% over the last five years. Furthermore, domestic e-commerce sales are largely influenced by the presence of major vendors such as Alibaba and Jingdong (JD.com). In addition to the presence of global players, APAC has been witnessing rapid growth in the number of small and medium-sized regional e-commerce players. Therefore, the growing e-commerce sector will boost the demand for last-mile delivery services in this region. Hence, such factors are expected to drive market growth in this region during the forecast period.
In the global market, the final step in the delivery process from distribution centers to the doorstep plays a pivotal role. With the rise of e-commerce and the pandemic accelerating online shopping, retailers and businesses are redefining their delivery solutions to meet the changing needs of people worldwide. Last mile logistics, facilitated by innovative technology and integration with courier and fulfillment networks, streamline shipping and ensure timely delivery of items. Developments in software platforms and delivery vehicles further enhance efficiency, particularly in urban areas. From South Korea to countries across the world, last mile delivery remains crucial in satisfying customer orders, addressing questions of volume, and shaping the future of retail and logistics industries.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
Last Mile Delivery Market Scope |
|
Report Coverage |
Details |
Page number |
172 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.12% |
Market Growth 2024-2028 |
USD 60.82 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.68 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 46% |
Key countries |
US, China, India, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Accenture Plc, CMA CGM SA Group, Deutsche Bahn AG, Deutsche Post AG, DSV AS, FarEye Technologies Inc., FedEx Corp., FM LOGISTIC CORP, Honeywell International Inc., Infosys Ltd., J B Hunt Transport Services Inc., Kuehne Nagel Management AG, Mara Labs Inc., Nippon Express Holdings Inc., Royal Mail Plc, Schneider Electric SE, SNCF Group, United Parcel Service Inc., Werner Enterprises Inc., and XPO Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
Customization purview |
If our market forecasting report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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