It is no longer enough to simply deliver things to customers reliably and affordably. Now, consumers expect their purchases to arrive quickly, reliably and affordably. Enter last-mile delivery.

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Last-mile delivery, sometimes called final-mile delivery or logistics, is the final step of delivery, where goods are transported to the ultimate destination. It typically refers to the delivery from a distribution center, fulfillment center or warehouse to the customer’s home or business.

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Here is everything you might want to know about last-mile delivery and final-mile logistics, including how businesses optimize their supply chains to stay ahead.

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‍How do last-mile delivery and final-mile logistics work?

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Last-mile delivery or final-mile logistics is the last stage of the supply chain. It generally involves trucks or smaller vehicles, such as vans, cars, and even bikes or scooters, to move goods to their final destination on time and efficiently.

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These are the common steps involved in last-mile delivery and final-mile logistics:

Order placed and delivery tracking begins
Goods arrive at the distribution center, fulfillment center or other transport hub
Delivery route planned
Carrier selected and assigned for pickup
Goods picked up for delivery
Order delivered to the customer with proof of delivery

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What is the difference between first-mile and last-mile delivery?

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In contrast to last-mile delivery, first-mile delivery is the start of the supply chain. It involves transporting goods from a company’s inventory, such as a supplier or manufacturing location, to an intermediary transport hub, like a distribution center, fulfillment center or warehouse.

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First-mile delivery is usually more efficient and less pricey than last-mile delivery because it is more predictable and fixed. Shipment origins and destinations typically stay the same over time, reducing the need for frequent route planning or other operational adjustments.

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‍What are the benefits of last-mile delivery and final-mile logistics?

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As consumers increasingly demand faster delivery, many shippers are investing more in the last mile to improve their sales, enhance reliability and boost customer satisfaction.

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Shippers with the best last-mile delivery and final-mile logistics and operations can increase sales, reduce pressure on their margins and grow their businesses.

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What are the main challenges involved with last-mile delivery and final-mile logistics?

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Last-mile delivery and other final-mile logistics are typically the most expensive and complex steps in the supply chain.

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Common issues with last-mile delivery include poor route planning, road or highway closures, traffic and weather. These events cause shipping delays or operational mishaps and are often unpredictable or time-consuming to resolve.

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Is last-mile delivery expensive?

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Last-mile delivery is generally the most expensive part of a business’s supply chain and logistics operations. It can be as much as 53% of the overall delivery cost, according to recent academic research.

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The most significant contributors to high last-mile delivery costs are:

Equipment, technology and vehicle purchases, maintenance, repairs and insurance
Fuel
Tolls or road congestion taxes
Wages, benefits and other labor expenses
Poor route planning or failed deliveries
Increased handling for returns or the need for specialized equipment
Seasonality costs, such as peak-season prices or increased road or highway closures and traffic

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Last-mile delivery can also be more pricey because of the administrative and operational expenses required to plan efficient routes, monitor and track cargo and deliveries, and manage staff and operations. Unlike the rest of the supply chain, last-mile delivery does not always benefit from economic efficiencies of scale.

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But last-mile delivery does not always have to be expensive.

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Mothership is one of the most trusted, reliable and cost-effective last-mile delivery providers, relied upon by tens of thousands of major shippers. Its marketplace matches shippers and their freight with the nearest carrier in seconds, delivering goods the same day in major cities and markets in the U.S. With rates starting at only $45, Mothership saves shippers up to 50% compared to typical final-mile shipping costs.

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How businesses can improve their last-mile delivery and final-mile logistics

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Companies optimize last-mile delivery through careful route planning, carrier choice, transportation mode selection, inventory management and technology to track goods and deliveries. They usually partner with logistics and transportation providers to manage their last-mile delivery and final-mile logistics.

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Mothership is one of the most reliable last-mile delivery solutions. Its tech marketplace matches freight with top, well-vetted carriers for more reliable, faster deliveries nationwide. It cuts final-mile freight costs by up to 50% with transparent pricing and no surprise charges or junk fees.

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Mothership specializes in less-than-truckload freight deliveries and same-day shipments—with a leading 97% on-time pickup and delivery rate—transporting goods to key U.S. markets on the same day. Its extensive same-day delivery network reaches important markets, such as New York City and southern New Jersey; the Philadelphia area and southeastern Pennsylvania; the Baltimore and Washington, D.C. region; greater Atlanta in the South; Miami and South Florida; the greater Los Angeles area, the Inland Empire, San Diego and its suburbs, and the San Francisco Bay Area in California; the Chicago and Detroit metropolitan areas; and the Dallas metroplex and greater Houston in Texas.

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Rick Chen is the director, communications at Mothership. He was previously the head of communications or company spokesperson for Credit Karma, Gusto, Metromile and Blind and has been featured in accounting, HR, insurance and tech trade publications and national outlets like CNBC, Forbes, Lifehacker, Reuters, Rolling Stone and more.