Last Mile Delivery Market Size and Share Analysis by Service (B2C, B2B), Application (E-Commerce, Package Delivery) - Global Industry Revenue Estimation and Demand Forecast to 2030

Market Overview

The global last mile delivery market size stood at $27.1 billion in 2022, and it is expected to advance at a compound annual growth rate of 20.6% during 2022–2030, to reach $121.2 billion by 2030. The growth can be primarily ascribed to the increasing use of omnichannel retailing, coupled with a significant rise in internet penetration in developing economies, such as India, Thailand, and Indonesia.

Moreover, with an increase in trust among online buyers and improved website experience, coupled with the level of comfort that is provided to online shoppers, e-commerce has gained significant popularity in the last 10 years. Thus, the e-commerce sector boom in emerging economies is expected to drive the demand for last-mile delivery services during the forecast period.

Furthermore, according to estimations by the United Nations (UN), around 66% of the population across the world will be living in cities by 2050, which will be increased from 55%, at present. It is estimated that by 2030, there will be around 41 megacities, each with a population of above 10 million people. These megacities will offer a rigid challenge for logistic companies for making last-mile deliveries speedily in a populated metropolis. Thus, this factor drives the demand for improved last-mile delivery services.

North America Holds Significant Share

North America holds significant share in the market generated around $9 billion in 2022. This is attributed to the high adoption level of advanced technologies in the region, coupled with the increasing level of efficiency projected by last-mile delivery. The region includes developed countries, such as the U.S. and Canada, which are prominent markets for last-mile logistics and e-commerce. According to a report, U.S. shoppers spent $10.7 billion on Cyber Monday and there were around 2.14 billion online shoppers in 2022.

In addition, in the region, the digital platform is becoming significantly important, which enables small-sized companies to have a worldwide reach and can compete with the industry’s established players. The use of updated technologies and management techniques in business processes to provide enhanced services to both suppliers and end users is shaping the regional industry.

In North America, the U.S. market holds the leading position, and it will grow at a CAGR of around 20% during the forecast period. This is attributed to the rising demand for personalized workflow, automation, and streamlining complicated operation processes that have significantly contributed to the shift in how businesses operate. Moreover, the presence of a large number of companies that are offering last-mile delivery services, which are one of the services highly in demand in the country.

On the other hand, the LAMEA last mile delivery market is expected to witness the fastest growth. This can be ascribed to the economic development taking place in major LATAM countries like Brazil and Mexico, the improving state of logistics, and the growing e-commerce industry in the region.

Moreover, companies operating in the regional market are focusing on efficient order management, as it is the centerpiece of any last-mile delivery solution and enables them to have access to an interface where they can arrange pick-ups and deliveries for drivers. The fully integrated order management system provides complete end-to-end visibility of the on-demand delivery business, as it helps in time-saving and keeping track of orders and potential delays for scheduled last-mile deliveries.

B2B Dominates the Market

The B2B category accounted for the majority of revenue share, around 50%, in 2022. This is because it offers several advantages to online retailers to attract B2B consumers, such as easy payment options, reduced time of delivery, heavy discounts on bulk buying, and doorstep delivery of heavy parts reducing management costs.

Whereas, the B2C category is expected to witness faster growth during the forecast period. This can be due to changing consumer purchasing behavior, growth in organized and omnichannel retailing, and increasing technical knowledge regarding the use of smartphone apps and online platforms. Moreover, with continuous growth in emerging economies, an increasing global middle-class population, and expanded internet access, the amplified demand for e-commerce will necessitate logistic companies to deliver products to end consumers present at remote locations in these countries.

E-Commerce Application To Register Fastest Growth

The e-commerce application category is expected to register the fastest growth, advancing at a CAGR of over 20%, in the coming years. This can be attributed to the increasing customer base, the changing customers’ buying behavior, fast and free shipping expectations of consumers, competitive pricing, and demographic shift. Thus, organizations are now concentrating on their strategies to overcome the demanding delivery schedule challenges of traditional logistics.

Adoption of Autonomous Vehicles for Delivery Is a Key Industry Trend

Artificial intelligence (AI) is a key technology for autonomous driving systems, as it is the only technology that enables reliable and real-time recognition of objects around vehicles. The adoption of autonomous vehicles is expected to allow for a drastic reduction of delivery costs, thus boosting growth in the e-commerce sector. New types of vehicles and new logistic structures are expected to evolve during the forecast period, to improve delivery services.

In addition, there are significant investments in the automotive industry, specifically in the optimization of self-driving technology, and automakers are working on autonomous trucks and other vehicles for commercial purposes, including delivery services.

Moreover, companies like Amazon.com Inc. are heavily invested in drone technology for last-mile delivery services. The company announced that it will start drone delivery service by the end of 2022 in California and Texas. The drone will be able to carry a weight of less than 2.2 kg and deliver packages in less than an hour. This will be a future transportation system of goods from a company to customers in 30 minutes or less in a safe manner using unmanned aerial vehicles, also known as drones.

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Real-Time Tracking Technology Boosts the Industry

The transportation and logistics industry is confronting significant changes, with the integration of real-time technology. The internet of things (IoT) is becoming prevalent within several industries, with transportation and logistics being considered as a major sector. In order to help companies to cater to the surging demands, technology is transforming last-mile delivery services, by providing real-time tracking solutions during the dispatch process.

Last-mile tracking provides customers with real-time insights into their deliveries and gives businesses a holistic view of transporter logistics and inspires them to be more customer-centric. Also, real-time visibility enables companies to identify potential problems and resolve them before escalation. Moreover, the e-commerce industry has thrived on this technology, as it has become important for e-commerce players as well as logistic service providers to have a robust IT infrastructure in place, which allows efficient tracking of each transaction and movement of shipment at any time.

The industry has witnessed various new start-ups entering the market, which provide last-mile management solutions. For instance, LogiNext Solutions Inc. offers logistics and field service management solutions. Through its LOGINEXT MILE, the company provides real-time tracking, real-time estimated time of arrival (ETAs) calculation, automated planning & route optimization, and electronic proof of delivery, among others.

This provides customers with a feeling of control and makes them aware of order status, but mostly it helps in ensuring the safety of products and reduces the chances of theft and losses. Thus, with the integration of real-time tracking technology and the introduction of AI and IoT technologies, the last mile delivery market is expected to witness a significant boost during the forecast period.

Key Players in the Last Mile Delivery Market Are:

• United Parcel Service Inc.
• FedEx Corporation
• LogiNext Solutions Inc.
• Deutsche Post AG
• J.B. Hunt Transport Services Inc.
• ArcBest Corporation
• DSV A/S
• Flexe Inc.
• Onfleet Inc.
• Postmates Inc.

Last Mile Delivery Market Size Breakdown by Segment

The study offers a comprehensive market segmentation analysis along with market estimation for the period 2017-2030.

Based on Service

• B2C
• B2B

Based on Application

• E-Commerce
• Package Delivery

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • U.K.
  • France
  • Italy
  • Spain
• APAC
  • Japan
  • China
  • India
  • South Korea
  • Australia
• LAMEA
  • Brazil
  • Mexico