DUBLIN--(BUSINESS WIRE)--The "Last Mile Delivery Market in the United States - Segmented by Service Type - Growth, Trends, and Forecast (2018 - 2023)" report has been added to ResearchAndMarkets.com's offering.
The Last Mile Delivery Market in the United States is proliferating owing to the rapid growth in the e-commerce industry.
The growing consumer preferences for faster deliveries and Omni channel retailing gaining popularity are some other factors that drive the market. Apart from these, the economy, GDP per capita, urbanization, and the logistics infrastructure in the country are some of the underlying factors that drive the online sales and the last mile delivery market.
In order to accommodate the growing demand, the companies are expanding its resources to increase the number of deliveries per day. With this, alternatives, such as click-to-collect locations and local regional carriers are also gaining popularity.
Besides these, the last mile delivery market is associated with some challenges, such as traffic in the urban areas leading to high fuel costs and the regulations of the government on trucks regarding the environmental concerns, which may hamper the growth of the market up to some extent.
The lack of proper tracking systems and transportation management systems (TMS) to handle increasing services may lead to high costs effecting the final mile delivery market.
Last Mile Delivery - Crucial Piece of Logistics
The last mile delivery, being a final leg of logistics is very important, time consuming and also takes a major share in the overall delivery cost. Unlike the normal shipping, where large amount of cargo is transported along a fixed route, the last mile delivery involves transportation of goods in multiple routes with low parcel sizes.
This cost has been vital for the retailers as the customers' expectations toward the fast and free delivery are growing. So, the companies and retailers are looking at advanced technological solutions and new delivery models to improve the overall process. According to various industrial estimates, the costs associated with the last mile stands around 50% of the overall logistics cost.
E-Commerce - Biggest Driver
The rapid growth in the e-commerce is the major driver of the last-mile logistics in the United States. In 2017, the online retail sales in the United States reached USD 453.5 billion registering a growth of 16% from USD 390 billion in 2016.
The physical retail store sales increased by 3.4%. The online retail sales accounted for 8.9% of the total retail sales in 2017. This represents the huge potential that still exists for the penetration of the e-commerce fostering the demand for final mile logistics and fulfillment.
Refrigerated Last Mile Delivery
Cold storage last mile logistics is one of the emerging sectors and the growing consumer preferences for fresh products is driving the sector. The e-commerce industry is responsible for the massive growth of perishable goods sales. According to industrial sources, the share of online grocery sales stands at around 2%, which is expected to reach 20% of grocery retail by 2025. The growing demand is also leading to a rise in the refrigerated warehousing, which is estimated to be worth USD 17.98 billion in 2017.
The US online grocery sales stood at USD 14.2 billion in 2017, which is expected to reach USD 30 billion by 2021. The business for meat kits is expected to grow by 25-30% in the next five years, which stands at USD 2.2 billion in 2017. Pharmaceuticals and Flowers are others, which boosts the cold chain logistics. In April, 2017, Walmart acquired Parcel, a last-mile delivery start-up based in New York for last-mile delivery of general merchandise and fresh and frozen groceries to the customers in New York City.
Technology is Set to Disrupt the Industry
With rapid growth, the last mile delivery also involves challenges in terms of increasing the effectiveness and reducing the costs by optimization. The technologies, such as automation, robotics, data analytics, and Internet of Things (IoT) reshape the way the products are catered by the retailers to consumers.
As the consumers are expecting transparency throughout the fulfillment process, the software services are also crucial in providing better customer experience. The technologies, such as Blockchain are expected to transform the transportation management.
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