Local Delivery and the Last Mile Defined
The terms “last mile” and “local delivery” describe essentially the same thing. In telecom, the last mile is the wiring that connects the house to the telephone poles. In the power industry, the last mile is the final step in the delivery of electricity (after passing through high-voltage transmission lines and transformers).
In the supply-chain and logistics worlds, “last mile” or “local delivery” refers to deliveries made to a business’s customers, typically from stores or distribution centers to nearby business or consumer buyers. I prefer “local delivery.” Local delivery encompasses a wide range of service levels, including same-day, scheduled, or next-day, and is accomplished using local delivery companies (also called couriers or local carriers) in pickup trucks, cargo vans, box trucks, and sometimes even drivers’ personal vehicles. Over the past five years, local delivery has become more and more associated with e-commerce deliveries.
As far as distance and geography, a local delivery initiates and terminates in a single market. A pickup from a distribution center just outside of Philadelphia and a delivery to the other side of the city is a local delivery. But a delivery originating just outside Philadelphia and delivering to Boston is not. That Philly-to-Boston (intercity) delivery typically goes through a cross-dock in the local market before it is really a local delivery.
All of this may sound obscure, but local delivery is critically important because it’s the one step of the supply chain that actually touches the customer. That makes quality critically important, and service levels become competitive differentiators. And since the last mile represents about 28% of a typical company’s transportation spend, cost control is very important. According the US Census, more than 4,000 local delivery companies serve this market, with annual revenues of $46 billion.
The last mile is a vibrant, yet largely invisible, industry, with a rising level of importance.