Last-mile Delivery Optimization for Retail Growth Opportunities

Despite Mounting Pressure on Supply Chains, Demand for Autonomous Vehicles and Route Optimization Software Drives Growth Strategies

This study focuses on last-mile delivery optimization achieved through autonomous vehicles (AVs) and route optimization software. It explores market definitions, size, forecasts, drivers, restraints, trends, competition, and growth opportunities.

Last-mile delivery involves the movement of products from a distribution center to the end destination (customer) through a logistics network that is either self-operated or handled by a third-party logistics (3PL) provider.

Traditionally, human workforces have carried out last-mile deliveries, but as supply chains come under more pressure and human resources are increasingly strained, demand for AVs and route optimization software has increased to enable more efficiencies and to optimize the last mile of the supply chain.

In this report, the global market is segmented by North America and Latin America (NALA); Europe, the Middle East, and Africa (EMEA); and Asia-Pacific (APAC) (the individual regions are not broken out).

Although online shopping was gaining traction in the pre-pandemic world, consumers still favored brick-and-mortar establishments. However, the COVID-19 pandemic created a surge in online shopping, which left businesses with very little time to adapt. Brick-and-mortar businesses still account for a majority of shopping, but eCommerce and the buy online, pick up in-store (BOPIS) phenomenon have led to much higher demand for last-mile delivery optimization and intelligent inventory management. With worker shortages and unprecedented demand putting immense pressure on the last mile of the supply chain, businesses are finding it very expensive to meet customer expectations.

And because customers have numerous choices online, businesses are trying to use last-mile delivery as a competitive advantage by promising the quickest delivery possible. To do so, they must expand the workforce and execute orders in shorter time frames. Yet considering labor shortages, businesses are now increasingly exploring technology to augment their last-mile delivery capabilities.

Current pressures on global supply chains coupled with geopolitical instability, especially in Europe, are further straining companies’ ability to provide effective last-mile delivery. These challenges increase demand for fossil fuels, which leads to higher fuel prices and subsequently higher costs for last-mile delivery.