As ecommerce continues to accelerate at a rapid pace, so too is the growth in last-mile delivery. Compound annual growth rate in this sector should sit around 11 percent in the coming few years. Seeing opportunity, in response, truckload and less-than-truckload (LTL) carriers are upping their games in this arena. Previously, this was a playing field typically managed by smaller parcel carriers like UPS and FedEx.
Last-mile delivery can be a costly point on the supply chain, hitting as much as 30 percent to 40 percent of the total cost of transportation. Revenue for truckload and LTL carriers, therefore, has traditionally been a low margin game. As these carriers perfect their models, however, they’re cutting costs and raising profits from the operations. Shippers, in the meantime, will have more choices—and hopefully competitive pricing—in how they manage the last mile in the future. It’s worthwhile to keep your eye on the ball in this arena, looking for cost-saving opportunities.