Last Mile Delivery Market Expected to Reach $288.9 Billion by 2031

According to a new report published by Allied Market Research, titled, “Last Mile Delivery Market," The last mile delivery market was valued at $131.5 billion in 2021, and is estimated to reach $288.9 billion by 2031, growing at a CAGR of 8.13% from 2022 to 2031.

Last mile delivery is the final logistics stage in the order process. It takes place after the products have been received, placed in the warehouse, sorted, picked, packed, and shipped to the appropriate distribution centers. Last-mile delivery is all about shipping the products from delivery hubs directly to the customer’s door. The inclination of consumers towards quick and timely delivery is likely to promote the growth of the last-mile delivery market. The spectacular rise in online and e-commerce sales in developing countries has increased the need for parcel shipment. This aspect may trigger the growth of the last-mile delivery market. Apart from this, the omnichannel supply chains are boosting the business in the logistics and transportation sector which further may facilitate the growth of the last-mile delivery market. Furthermore, same-day delivery is one of the major market drivers which has grabbed consumer attention. This aspect is likely to support the growth of the last-mile delivery market. For instance, in January 2022, DPD Group collaborated with Asendia USA to provide quick and cost-effective e-commerce package delivery services to Europe from the U.S. enabling exceptional growth potential in the region.

In addition, the last mile delivery market has witnessed significant growth in recent years, owing to the improved customer service, reduction in operating costs, and advancements in the conception of delivery services such as automated delivery and aerial delivery. Furthermore, the companies operating in the last mile delivery market have adopted partnerships, investments, and business expansions to increase their market share and expand their geographical presence. For instance, in September 2021, Matternet announced its first establishment of the Matternet Station at EOC hospital group in Switzerland, Lugano. The Matternet M2 drone including its cloud platform, as well as the Matternet M2's beyond-visual-line-of-sight (BVLOS) technology, will be used to enable autonomous drone delivery.

The factors such as development of e-commerce industry, increase in trading activities due to globalization, technological advancements in delivery vehicles, and increase in demand for fast delivery of packages drives the last mile delivery market growth. However, poor infrastructure & higher logistics costs, lack of control of manufacturers and retailers on logistics service, and imprecise postal address system is expected to hamper the growth of the market. Further, the adoption autonomous delivery to reinforce the demand, cost cutting & lead time reduction due to adoption of multi-modal system, and growing e-commerce industry coupled with rise in B2C deliveries is expected to create numerous opportunities for the growth and expansion of the last mile delivery market.

COVID-19 Impact Analysis

COVID-19 has created a short-term disruption and long-term structural changes due to which the e-commerce sector is experiencing a sluggish growth in new online categories such as groceries and home care. Due to COVID-19 pandemic, the overall sales of e-commerce business in the U.S. have increased by over 30%. As per the industry experts, with the increased urbanization, approximately 60% people will be living in cities in the near future and among those, 2.1 billion customers are expected to buy goods online by the year 2021. Also, in March 2021, the AIN pharmacy in town began autonomous delivery of medication to patients' homes. In 2020, Starship Technologies started delivering food during the pandemic. Factors such as rise in demand for contactless delivery from customers, growth of the e-commerce sector during pandemics, and partnership and collaboration between various companies and autonomous vehicle and ground delivery bot manufacturers, are expected to boost the market growth during pandemic.

KEY FINDINGS OF THE STUDY

• By service type, customer-to-customer (C2C) segment dominated the global last mile delivery market in terms of growth rate.
• On the basis of vehicle type, the drones segment is anticipated to exhibit a remarkable growth during the forecast period.
• On the basis of mode of operation, the autonomous segment is the highest contributor to the last mile delivery market in terms of revenue.
• By delivery mode segment, the same-day delivery or express delivery segment is anticipated to exhibit a remarkable growth during the forecast period.
• By application, the retail & FMCG segment is anticipated to exhibit a remarkable growth during the forecast period.
• On the basis of destination, the international segment is anticipated to exhibit a remarkable growth during the forecast period.

Global key players profiled in the last mile delivery market report include A1 Express Services Inc., Amazon.com, Aramex, BEST Inc., DB Schenker, Deutsche Post AG (DHL GROUP), DPD, Drone Delivery Canada, Dropoff, Inc., DSV (DSV PANALPINA), FedEx, Flirtey, Flytrex, Geodis, Jet Delivery, Inc., Kerry Logistics Network Limited, Marble Robot, Matternet, Power Link Expedite, Savioke, SF Express, United Parcel Service, Inc. (UPS), USA Couriers, XPO Logistics, Inc. and YTO Express Group Co. The key innovators operating in the industry includes companies such as Care to Beauty, Desertcart, Fetchr, JAZP and Jeebly LLC.