What is Last-Mile Delivery?

Last-mile delivery refers to the final stage of the shipping journey—the movement of a package from a regional distribution center, local warehouse, or carrier facility to the end customer’s address. Despite covering the shortest physical distance in the supply chain, the last mile is consistently the most expensive and operationally challenging segment. It accounts for an estimated 53% of total shipping costs because it involves individual, low-density drop-offs across dispersed residential or commercial locations rather than the consolidated, high-volume movements that characterize earlier stages of freight transportation.

Why It Matters

Last-mile delivery is where customer experience is won or lost. A product can travel flawlessly across continents through multiple warehouses and sorting facilities, but if the final delivery is late, damaged, or mishandled, the customer’s perception of the entire brand suffers. In the era of same-day and next-day delivery expectations set by major marketplaces, last-mile performance has become a competitive differentiator. Businesses that consistently deliver quickly and reliably earn repeat purchases and positive reviews, while those with unreliable last-mile operations face cart abandonment, customer complaints, and rising return rates.

The economics of last-mile delivery also directly affect profitability. Failed delivery attempts—where the recipient isn’t home or the address is incorrect—require costly redelivery. Urban congestion, rural remoteness, and apartment building access all add complexity. Businesses must balance speed expectations against cost realities, choosing between premium carriers for faster delivery and economy options for cost-sensitive shipments. Without strategic last-mile planning, shipping costs can erode margins faster than any other operational expense.

How It Works

Last-mile delivery involves coordination between multiple systems and stakeholders:

• Carrier Selection: When an order is ready to ship, the business selects a last-mile carrier based on delivery speed requirements, package dimensions, destination zone, and cost. Options range from national carriers like UPS, FedEx, and USPS to regional couriers, crowdsourced delivery platforms, and the business’s own fleet for local deliveries.
• Route Optimization: Carriers use route planning software to sequence deliveries efficiently, minimizing drive time and fuel costs. For businesses managing their own last-mile operations, route optimization can reduce delivery costs by 20–30% compared to unoptimized routing.
• Tracking and Communication: Real-time tracking updates keep customers informed about their delivery status. Proactive notifications—out for delivery alerts, estimated delivery windows, and delivery confirmation with photo proof—reduce “where is my order” inquiries and failed delivery attempts.
• Delivery Execution: The driver navigates to the address, verifies the delivery location, and completes the handoff. Options include doorstep delivery, signature-required delivery, locker pickup, and curbside handoff. Each method carries different cost and security trade-offs.
• Exception Handling: When deliveries fail—wrong address, customer not available, access issues—the carrier initiates exception workflows. These may include reattempt scheduling, redirect to a pickup point, or return to sender. Each exception adds cost and delays.

How Nventory Helps

Nventory improves last-mile delivery outcomes by connecting order management with carrier selection and shipment tracking in a single platform. Rate shopping across multiple carriers ensures you choose the best combination of speed and cost for each shipment, while real-time tracking integration keeps both your team and your customers informed from dispatch to doorstep. By routing orders to the fulfillment location closest to the customer—whether that’s a warehouse, retail store, or 3PL—Nventory shortens last-mile distances and reduces delivery times and costs.