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The last mile delivery market size is forecast to increase by USD 60.82 billion at a CAGR of 5.12% between 2023 and 2028. Last mile delivery, the final leg of the supply chain connecting warehouses or transportation hubs to delivery destinations, is a critical component of the food delivery market. The industry's growth is driven by the expanding e-commerce sector and the increasing focus on technological advances. Cloud kitchens and food delivery platforms have gained significant traction, enabling efficient order processing and faster delivery times. However, last mile delivery companies face operational challenges, including route optimization and company costs. Mobile applications play a crucial role in streamlining operations, allowing real-time tracking and communication between drivers and customers. Incorporating warehouse and transportation hub strategies can further enhance efficiency and reduce delivery times.
The market is a critical component of the logistics process, focusing on transporting goods from distribution centers to the customer's doorstep or retail store. With the increasing popularity of e-commerce and on-demand services, consumer expectations have shifted towards faster, more convenient delivery options. Urban congestion poses a significant challenge in last mile delivery, making it essential for companies to optimize their routes and employ sustainable solutions. Sustainability considerations, such as reducing carbon emissions and minimizing traffic congestion, are becoming increasingly important to both consumers and retailers.
Real-time tracking is a crucial technology insight for the market. By providing customers with up-to-the-minute information on their orders' location and estimated delivery time, companies can enhance the overall customer experience. This transparency not only builds trust but also allows customers to plan their day accordingly. Non-autonomous technology, such as optimized routing and mobile applications, plays a significant role in last mile logistics. These technologies enable companies to streamline their operations, reduce shipping costs, and improve delivery accuracy. Brick-and-mortar retailers are also embracing omnichannel retailing, which involves integrating online and offline channels to provide a seamless shopping experience for customers.
Autonomous technology, such as autonomous vehicles and drones, is gaining traction in the market. These technologies offer the potential for faster, more efficient delivery and reduced company costs. However, they also come with challenges, such as regulatory requirements and public acceptance. Peer-to-peer marketplaces have emerged as a popular trend in the market. These platforms allow individuals to sell or rent out excess capacity in their vehicles or even their own time to deliver goods for others. This sharing economy model can help reduce transportation costs and provide additional income opportunities for individuals. Food delivery platforms and cloud kitchens are other significant players in the market.
These services cater to the growing demand for convenience and flexibility, allowing customers to order meals online and have them delivered to their doorstep. Route optimization is essential for these companies to ensure timely and cost-effective deliveries. Transportation hubs and warehouses serve as crucial infrastructure for last mile delivery. These facilities enable companies to consolidate shipments, optimize routes, and efficiently manage their inventory. Delivery destinations, such as customers' homes or retail stores, require flexible and adaptable delivery solutions to accommodate varying needs and schedules. In conclusion, the market is a dynamic and evolving landscape that requires companies to adapt to changing consumer expectations, urban congestion, and sustainability considerations.
By leveraging technology insights, such as real-time tracking and route optimization, and embracing innovative solutions, such as autonomous vehicles and peer-to-peer marketplaces, companies can meet the demands of today's consumers and stay competitive in the market.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The B2C segment is estimated to witness significant growth during the forecast period. Last mile delivery in Business-to-Consumer (B2C) commerce refers to the transportation of parcels and goods from nearby transportation hubs to consumers' doorsteps. A significant portion of last mile delivery entails the direct delivery of goods to consumers' homes. In contrast to Business-to-Business (B2B) last mile delivery, B2C last mile delivery primarily focuses on delivering small and lightweight items. The growing trend of online shopping has led to a substantial increase in the significance of last mile delivery. For instance, between 2012 and 2021, e-commerce sales in the US as a percentage of total retail sales expanded by approximately 10% in Q1 year-over-year.
However, B2C last mile delivery poses unique challenges for delivery operators compared to B2B deliveries. This is due to the fact that most B2C deliveries consist of individual, standalone purchases that must be delivered to distinct residential locations. The Internet has revolutionized shopping, leading to a wave in product delivery services, necessitating the use of ground delivery vehicles and, in some cases, delivery robots like Scout, to ensure timely and efficient last mile delivery. Despite the challenges, effective last mile delivery is crucial for ensuring customer satisfaction and retention in the competitive e-commerce landscape.
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The B2C segment accounted for USD 96.08 billion in 2018 and showed a gradual increase during the forecast period.
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.
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The market in the Asia Pacific region is experiencing substantial growth due to the region's thriving e-commerce sector. China, in particular, is a significant contributor to this market's revenue growth. The rapid expansion of China's e-commerce industry, which is the fastest-growing in APAC, is a major factor driving this growth. For instance, e-commerce sales in China grew by approximately 28% over the past five years, and in 2020, they increased by more than 20% compared to the previous year. The presence of major e-commerce players such as Alibaba and Jingdong (JD.Com) in China significantly influences domestic sales. Furthermore, the emergence of numerous small and medium-sized regional e-commerce players is contributing to the market's growth in APAC.
Transport costs and inventories are essential financial considerations in last mile delivery, and the development of transport infrastructure and warehousing space is crucial to addressing these concerns. The use of autonomous delivery systems is also gaining traction in the region as a potential solution to reduce transport costs and improve efficiency.
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.
Growing global e-commerce industry is the key driver of the market. The market in the US and other regions is experiencing significant growth due to escalating consumer expectations for real-time tracking and on-demand services. The logistics process from distribution centers to the customer's doorstep is becoming increasingly complex, particularly in urban areas with high levels of congestion. Sustainability considerations are also becoming a priority, with consumers and retailers seeking eco-friendly delivery options. The e-commerce industry's expansion, driven by the increasing penetration of the Internet and online shopping, is a significant factor fueling the growth of the market. In the US, e-commerce retail sales waved by 39% in Q1 2021 compared to the previous year, while total retail sales grew by only 16.4%.
In China, major e-commerce players like Tmall and JD.Com are leading the way in the B2B last mile delivery segment. With internet access now exceeding 65% globally, more consumers are able to engage in online shopping. Retailers are focusing on enhancing the customer experience by offering seamless and efficient delivery services. Real-time tracking and transparent communication are essential components of this strategy. The market is expected to continue its growth trajectory as the e-commerce industry evolves and consumer preferences shift towards convenience and sustainability.
Strong focus on technological advances is the upcoming trend in the market. In the market, the integration of advanced technology is a significant trend, enabling real-time tracking for consumers to manage and modify their package deliveries via user-friendly online tools. This technology enhances transparency and offers customers control over their deliveries.
However, for large or high-value packages, customers are required to collect them directly during delivery due to security concerns. This presents a challenge for delivery service providers, leading them to offer web and mobile applications for managing the scheduling of such deliveries. Effective route optimization and the use of transportation hubs and warehouses further streamline the last mile delivery process, reducing company costs and ensuring timely delivery to customers.
Operational challenges for last mile delivery companies is a key challenge affecting market growth. Last mile delivery, the final leg of the supply chain connecting merchants to consumers, presents unique challenges for e-commerce businesses. While long-distance transportation costs are relatively lower due to economies of scale, last mile delivery involves multiple individual deliveries within a region, leading to increased logistics expenses. The primary costs in last mile delivery are labor and fuel. With numerous last mile delivery companies vying for market share, competition is intense, primarily driven by pricing and delivery speed. Consumers prioritize cost-effective options, making it essential for service providers to optimize their operations.
Autonomous technology, such as drones and autonomous vehicles, offers potential solutions to reduce labor and fuel costs, but consumer acceptance and regulatory approval remain hurdles. Peer-to-peer marketplaces and technology insights from non-autonomous solutions like optimized routing and real-time tracking also contribute to enhancing last mile delivery efficiency. Brick-and-mortar retailers embracing omnichannel retailing face similar challenges, requiring them to adapt to the evolving last mile delivery landscape.
The market forecasting 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis 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.
Accenture Plc - The company offers last mile delivery services that can reduce traffic congestion and air emissions and provides a seamless experience in buying, receiving, paying and returning.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key 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.
Last mile delivery refers to the final leg of the supply chain process, where products are transported from a distribution center or transportation hub to the customer's doorstep or retail store. With the rise of on-demand services and consumer expectations for real-time tracking, last mile delivery has become a critical aspect of the logistics process. Urban congestion poses a significant challenge to last mile delivery, leading to increased logistics costs and longer delivery times. Sustainability considerations are also becoming important in last mile delivery, with companies exploring the use of autonomous vehicles, drones, and delivery robots to reduce carbon emissions and improve efficiency.
Moreover, consumer behavior is driving the adoption of technology insights, such as route optimization and mobile applications, to provide better delivery services and improve the customer experience. E-commerce industry growth and the increasing popularity of peer-to-peer marketplaces have put pressure on retailers to offer multiple shipping options and expected delivery times. The logistics market is responding with the integration of autonomous technology and non-autonomous technology to optimize transportation infrastructure, reduce transport costs, and improve inventories and financial costs. The postal address system and poor infrastructure in some regions present challenges to last mile delivery, but companies are finding innovative solutions to overcome these hurdles and meet customer demands for easy returns and overseas market expansion.
Further, freight transportation companies and supply chain activities are also adapting to the changing landscape of last mile delivery, offering fulfillment services, warehousing, and distribution to help retailers stay competitive. Skilled workers and IT standard system integration are essential to ensuring seamless last mile delivery and maintaining customer satisfaction.
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Market Scope |
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Report Coverage |
Details |
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Page number |
172 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 5.12% |
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Market growth 2024-2028 |
USD 60.82 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
5.68 |
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Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 46% |
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Key countries |
US, China, India, Germany, and UK |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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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. |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Service
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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