Last mile refers to the final stage of the delivery process — the movement of goods from a distribution centre, fulfilment hub, or local depot to the end customer’s location. It’s the part of the supply chain that the customer actually sees.
Despite being the shortest segment by distance, the last mile is typically the most expensive and logistically complex part of shipping.
You’ll hear this when…
“Last-mile delivery” is a constant topic in e-commerce, retail logistics, and urban planning. “We’re optimising our last mile” means a company is working on making final deliveries faster, cheaper, or more reliable.
The last mile is where customer expectations are highest (same-day delivery, specific time windows, real-time tracking) and where costs are hardest to control (multiple stops, failed delivery attempts, returns, congested urban routes).
Last-mile delivery providers include traditional carriers (UPS, FedEx, Royal Mail), gig-economy platforms (Amazon Flex, DoorDash), and dedicated last-mile startups. Amazon’s investment in its own delivery network was driven largely by the need to control last-mile costs and speed.
Why it’s so expensive
A long-haul truck carries one full load to one destination. A last-mile van makes dozens of individual stops, each requiring navigation, parking, and handoff. The cost per package is far higher. Industry estimates suggest the last mile accounts for 40–50% of total shipping costs. This is the single biggest unsolved cost problem in logistics.
Source: McKinsey & Company — last-mile delivery research; Capgemini Research Institute