Major US centres see surge in last-mile deliveries

The number of last-mile deliveries in major US cities is seeing a surge, with a resulting increase in the number of vehicles on the road.

Between 2020 and 2022, Manhattan experienced a 55 percent increase in the number of stops on last mile delivery routes, accompanied by a 46 percent rise in the number of vehicles making these deliveries.

Chicago witnessed a 116 percent surge in the number of stops, and an 82 percent increase in the number of vehicles dedicated to last mile deliveries.

Phoenix recorded 58 percent growth in the number of stops, along with a 22 percent rise in the number of last mile delivery vehicles.

Houston had a 29 percent rise in stops along last mile delivery routes, coupled with a 39 percent increase in the number of fleet vehicles responsible for deliveries.

The last mile accounts for up to 53 percent of total delivery costs in the United States and significant carbon emissions.

“Urban centres are seeing increases in delivery vehicles, creating concerns about safety and environmental impact. Our data confirms that the spike in e-commerce deliveries in recent years is sustained and maintaining steady growth,” said Jean Pilon-Bignel, vice-president, public sector at Geotab, which produced the numbers.

“In the face of high consumer delivery expectations, Geotab champions data-driven strategies that optimize business and city operations, and prioritizes last mile delivery efficiency, improving sustainability, strengthening safety measures, and mitigating the public impacts of congestion.”

Soaring shipping costs and inefficiencies tied to last mile delivery are worsened by the continued post-pandemic surge in e-commerce sales. For instance, a nearly 64 percent jump in grocery e-commerce sales in the U.S. was seen in 2020, reaching US$109 billion, and by 2025 sales are expected to grow to nearly $243.67 billion.

The United States’ e-commerce sector alone witnessed about $600 billion in total sales in 2019, with e-commerce penetration barely touching 11 percent. This figure is projected to maintain a double-digit growth rate for years to come.

Failed deliveries cost over $17 per shipment, with five percent failing and 84 percent of customers unlikely to return to the same company. Given fierce competition in profit margins, precise data is vital in this supply chain segment.

Geotab’s data suggest that data-driven strategies are essential to improved cost and performance. These include route planning, demand forecasting, and vehicle utilization optimization.