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last mile delivery

Contributor(s): Matthew Haughn

Last mile delivery is a term used for transportation of merchandise from the nearest distribution hub to the final destination, such as a home or business.

The term is commonly used in the contexts of supply chains and transport for delivery businesses. The term originally comes from telecommunications, where the last mile is the connection from the ISP to the location of the customer premises equipment, such as a user’s home or office.

In delivery businesses, the hubs along delivery routes are located at sites near to the center point of common delivery locations. Deliveries between these hubs normally involve trucks moving large quantities of packages. Because of the greater number of potential locations involved, the use of large vehicles is not cost-effective for last mile delivery and smaller vehicles such as vans are used instead. However, it may also be necessary to make multiple delivery attempts, which can further increase costs and make the last mile delivery the least efficient leg of the delivery process.

As the most inefficient stage in the delivery process, last mile delivery often needs more radical approaches to increase efficiency. Drone delivery and delivery by driverless car are two approaches being tested by transport organizations. Companies also contract with independent drivers for deliveries to save on staff and overhead. Amazon, a major driver of innovation in last mile delivery, has been a developer and an early adopter of these and other various technologies and methods.

This was last updated in May 2018

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