Last Mile Delivery Market

Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2025)


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Urban mobility is witnessing a fresh outlook, chiefly driven by last mile delivery upsurge. Last mile delivery executes the supply chain’s last phase in the entire ecosystem of delivering goods to the end consumers. The last leg involves disbursement of goods from the distribution center to consumer’s doorstep. Inception of rapidly evolving technology has totally disrupted the logistics industry, fostering development of last mile delivery system.

Technology being at its center stage is turning out to be more agile, lean and is constantly re-sculpting itself to meet the ever-changing consumer expectations. In recent years, retail sector underwent modernization through technological advancements, transforming brick and mortar retail outlets into e-commerce platforms with strong online presence.

E-commerce is now playing a critical role fulfilling the demand for daily necessities. It has evolved profoundly over the last couple of years. As a result, the shift from conventional to online shopping has penetrated to the rural areas too. The e-commerce industry is expected to proliferate by over 30% in the coming years on the back of rising consumer demand.

The last mile delivery system is the fulcrum defining the interdependent relationship of e-commerce and logistics sector. For improved efficiency, technologies Last mile delivery systems have observed rapid deployments with technologies being designed to make these systems time efficient. For instance, announcement of droids and fully operational inter-hospital drones have led the change. The future of last mile delivery market is expected to see autonomous vehicles in the coming years.

Digitalization, Online Shopping and Rise in Trade Volume to Drive Last Mile Delivery Market

Tremendous focus on bringing in technological advancements to the e-commerce industry over the recent years have uplifted consumer expectations and influenced their buying behavior. Fairfield Market Research indicates that nearly 25% of consumers are willing to shell out extra money for same day delivery.

Increased digitalization and online shopping platforms have aided the e-commerce market proliferation over the last decade. Growth in online shopping led to increased trade volume requiring swift deliveries. Quicker deliveries including same day deliveries have been prime focus areas for the e-commerce and logistic sectors to ensure customer satisfaction. This in turn is anticipated to propel the last mile delivery demand.

As per World Economic Forum, urban demand for last mile delivery in world’s top 100 cities is expected to surge by 60% over the next decade.

Eradication of capital investment in the physical brick and mortar structures is expected to propel the market demand. E-commerce model waives off brick and mortar structures and additional maintenance overheads of such structures from the expense books. Additionally, such business models aid in curtailing redundant expenses. These programs have assisted manufacturers and companies in minimizing their cost centres, thus boosting their profit margins through direct online sales. Thus, traded volumes over ecommerce platforms are highly attributable towards a positive development of the last mile delivery market growth.

Impact of COVID-19 on Last Mile Delivery Market

The COVID-19 pandemic led to short term disruptions, while it assisted in long term changes in structure. These changes have been executed based on the soaring demand witnessed from groceries and home care products. Demand for last mile delivery spiked with supply of daily needs and FMCG essentials relying on e-commerce. In the light of the new normal defined by social distancing, the pandemic is predicted to act as a catalyst in spurring unattended, contactless and autonomous delivering techniques.

FMCG Sector to be Key User of Last Mile Delivery

The FMCG sector is likely to retain its leading position in the last mile delivery market. Rising e-commerce platforms will chiefly drive the demand for online shopping, boosting sales of perishable items such as food and beverages. This will generate a high usage of last mile delivery systems for quick delivery to ensure product integrity. Improved internet access will future boost e-tailing market, creating a lucrative ground for market in question. The other key end user of this market will be pharmaceutical industry.

Asia to Offer Incredible Opportunities Turning Huge Consumer Base into its Strength

Asian countries are likely to retain their forefront position in terms of market share contribution. Introduction of e-commerce platforms gaining momentum due to their convenient utility have been the biggest selling point in Asian countries amidst the pandemic.

Rising volume traded over these platforms have been instrumental in keeping the last mile delivery demand upbeat over the recent years. Intensifying foreign investments like have been few other parameters helping the regional share swell over the recent past.

A strong population base, characterized by Generation Z and Millennials have also been pivotal in this regional success. As growing number of youngsters with a decent disposable income prefer online shopping, the last mile delivery systems in the region are likely to be pushed in the upward direction. In addition to FMCG, sale of personal care products, apparel and fitness gear will see a high demand that will require last mile delivery solutions in the immediate future.

JVs, Mergers and Acquisitions and Collaborations to take Top Priority

Competitiveness amongst the key players and new entrants is resulting into stiffer competition. To stay ahead of the game, competitors to find new arrays of strategies such as joint ventures, mergers & acquisitions and collaborations. Many players are examining new ways to sustain the rising cost involved in the last leg of journey during goods delivery. Additionally, the restaurant operators and retail outlets have collaborated with last mile delivery service suppliers to overcome the issues related to management of supply chain and logistics. During their efforts to attain cost efficacy, delivery models like direct to customer are undergoing innovative advancements.

Few players have diversified their businesses and are turning out to be a tough competition to the incumbents. For instance, Uber and similar other cab aggregators are utilizing their resources to establish their last mile delivery services.

Some of the key stakeholders steering the market growth are Cargo Carriers, CJ Logistics,   CEVA Logistics,Concargo Private Ltd, DB SCHENKER, Interlogix Pty Ltd., DHL Paket GmbH, Estes Express Lines, FedEx Corporation, Kuehne + Nagel, Nippon Express Co., Ltd., J&J Global Limited, KART, SNCF Geodis, Swift Transportation, TNT Holding B.V., Procet Freight, Tuma Transport, Yamato Holdings Co., Ltd. and United Parcel Service Inc. among others.

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