Bulky delivery segment to see fast growth

by Inside Logistics Online Staff
The big and bulky last-mile delivery sector is predicted to be one of the fastest growing 3PL segments over the next three years.
The National Home Delivery Association (NHDA) and Armstrong & Associates, Inc. (A&A) partnered for a study covering the third-party logistics big and bulky U.S. last-mile delivery market segment to identify current market size, historical growth and outlook, key providers, customers and verticals served, e-commerce’s role, employment, and other trends. The 3PLs analyzed had last-mile delivery revenues from US$7 million to $1 billion and represent approximately 40 percent percent of the estimated $9.3 billion U.S. third-party logistics big and bulky U.S. last-mile delivery market.
A&A estimates the segment experienced a compound annual growth rate (CAGR) of 18.2 percent from 2017 through 2021 and will have a CAGR of 11.8 percent from 2022 through 2025. These projections make it one of the fastest growing 3PL segments over the next three years.
In the report, last-mile delivery is defined as the transportation of big and bulky shipments (not parcel) from an origin to a destination within the United States where they will be used or consumed. These can be business-to-business (B2B) or business-to-consumer (B2C) shipments.
Typically, last-mile e-commerce orders are shipped as small packages and transported by parcel carriers. However, with expanding e-commerce product categories such as furniture and appliances, other last-mile options are growing in significance. Third-party logistics providers with fleets of independent contractors and freight brokerage operations deliver many last-mile orders. In addition, less-than-truckload (LTL), last-mile, household goods, and lruckload (TL) carriers are expanding last-mile services for big and bulky items to accommodate the rapid growth in e-commerce retail sales.The final transportation leg for an e-commerce order—the last mile—may be short, but it can also be extremely costly. Transportation costs for a shipment from a distribution centre to a customer’s doorstep can account for 30 to 40 percent of the total cost of transportation.
Last-mile provider revenue per shipment is low by traditional LTL standards and averages less than $90 per shipment. Total shipment revenue varies depending upon the value-added services performed at the time of delivery. A whole bedroom delivery and setup can generate $250 while a less service intensive shipment may only generate $50.