The Future of last-mile delivery: Trends and Predictions

19th January 2024

In today’s world, where convenience and speed are paramount, the last-mile delivery has become the backbone of the modern supply chain. The last mile is the final step in the delivery process, from a distribution centre or a store to the customer’s doorstep. This leg of the delivery process presents unique challenges and opportunities. As technology continues to advance and consumer expectations evolve, the future of last-mile delivery is expected to undergo significant changes. In this blog, we will discuss the current trends and predictions that are shaping the future of last-mile delivery.

The Rise of E-commerce 

The growth of e-commerce has caused significant changes in the last-mile delivery sector. Due to the COVID-19 pandemic, online shopping has surged and now makes up 32% of all purchases, a trend that is expected to continue. With the increase in online shopping, there is a growing demand for fast and efficient last-mile delivery services. Retailers and logistics companies are investing heavily to expand their e-commerce capabilities and optimise their delivery networks to meet this rising demand.

Same Day Delivery 

Today’s consumers have higher expectations than ever when it comes to delivery of their online purchases. They want fast and convenient delivery options, and waiting for days is no longer acceptable. To meet these expectations, many companies are offering same-day or even instant delivery options. For example, Amazon and Uber already provide same-day delivery in many areas. As these expectations become more common, other retailers and industries are likely to follow suit. To keep up with these faster delivery time expectations, it is expected that businesses will keep experimenting with new technologies like drones and autonomous vehicles to aid in their last-mile delivery efforts.

Urbanisation and Micro-fulfilment centres 

As more people migrate to urban areas, executing last-mile deliveries in these cities becomes increasingly complex. Congested streets, limited parking, and strict environmental regulations make traditional delivery methods less efficient. To overcome these challenges, many companies are turning to micro-fulfilment centres. These small, automated warehouses enable faster order picking and reduce the distance between the distribution centre and the customer, resulting in shorter delivery times.

Sustainable Delivery Practices 

As the impact of climate change and its environmental consequences become more apparent, governments, businesses, and individuals alike are taking steps to reduce their carbon footprint and promote sustainability. To make last-mile delivery more eco-friendly, companies are employing various strategies. One such strategy is the use of electric delivery vehicles, which emit zero emissions and have lower operating costs over time. Another strategy is using bike couriers, which reduce emissions and have the added benefit of being faster in urban areas with heavy traffic.

Companies are also utilising renewable energy sources to power their delivery operations, such as solar or wind power. This approach reduces dependence on fossil fuels and helps minimise delivery operations’ carbon footprint. In the future, we expect to see more rigorous regulations and a growing consumer demand for sustainable delivery options, further encouraging innovation in this area.

Automation and Robotics 

The future of last-mile delivery is set to undergo a significant transformation as a result of automation and robotics. Self-driving cars and drones, which are autonomous delivery vehicles, have the potential to revolutionise the industry. These technologies can operate round the clock, thus reducing labour costs and increasing delivery speed significantly. Despite currently facing regulatory and safety challenges, companies such as Tesla, Waymo, and Wing are making active efforts to develop and test autonomous delivery solutions to change the future. 

Subscribe to the OTS News weekly email roundup:

* indicates required

The GigEconomy 

The rise of the gig economy has brought about a significant transformation in the last-mile delivery industry. With the advent of companies like Uber Eats, DoorDash, and Instacart, there has been a shift towards a model that relies heavily on the use of independent contractors to fulfil customer orders. This unique business model offers a range of advantages, including greater flexibility and scalability, especially during peak demand periods. 

However, this new paradigm also raises important questions about the labour rights and job security of these gig workers. Many experts argue that the independent contractor status of these workers fails to provide them with the same level of benefits and protections as regular employees. Moreover, the lack of job security, coupled with the absence of long-term contracts, means that gig workers are often left with little to no protection against sudden dismissal. It is essential that we address these issues as the gig economy continues to grow and evolve. Policymakers, industry leaders, and worker representatives must work together to create a more equitable and sustainable work environment for gig workers. By developing new policies and regulations that protect the rights of these workers, we can ensure that the gig economy benefits everyone involved and remains relevant in the future.

Customer-Centric Delivery Options 

In the coming years, last-mile delivery is predicted to become more customised to meet individual customer preferences. Customers will have greater control over the timing and location of their deliveries. They might be able to select delivery time slots, designate drop-off points, or even choose contactless delivery options. This level of personalisation will necessitate sophisticated logistics systems and real-time communication between customers and delivery providers.

Security and Privacy Concerns 

With drones, autonomous vehicles, and other cutting-edge technologies, data security and privacy concerns have become more complex. Customers now demand assurances that their personal information is being handled responsibly and that the technology used in delivery is protected against cyberattacks and misuse. As such, it has become imperative for businesses to prioritise data security and privacy to build trust with their customers. This trend and preference is likely to persist into the future. 

Regulatory Changes 

The rapid evolution of last-mile delivery technologies will pose regulatory challenges for governments worldwide. Policymakers must strike a balance between fostering innovation and ensuring safety, security, and fairness in the industry. Regulations regarding drone flights, autonomous vehicles, and gig economy workers must be developed and adapted to remain up-to-date with the changing landscape of last-mile delivery.

In summary, the future of last-mile delivery will be characterised by innovation, automation, and customer-focused strategies. The trends and predictions we have discussed in this blog are already influencing the industry, and we can expect further advancements in technology and logistics to continue driving change. With the growth of e-commerce, last-mile delivery will remain a vital component of the supply chain. Therefore, businesses that can adapt to these evolving trends will have a better chance of success in the years to come. The future of last-mile delivery promises to be exciting and transformative with the advent of same-day delivery via drones, eco-friendly electric vehicles, and personalised delivery options.