Last-Mile Deliveries Grow Bigger and Bulkier
Big and bulky last-mile delivery will be one of the fastest growing third-party logistics (3PL) segments for the next three years, driven by expanding e-commerce product categories that include furniture and appliances, predicts Making it Count: Big and Bulky Last-Mile Delivery in the United States, an Armstrong & Associates report.
The report estimates the 3PL big and bulky market size to be $9.3 billion and shows a compounded annual growth rate of 11.8% between 2022 and 2025 for this specific delivery segment.
Although the last mile is the shortest leg of a delivery, it can be a costly one. The costs associated with shipping a package from a fulfillment center to final delivery can represent up to 40% of the total cost of transportation, according to Armstrong & Associates.
In addition, revenue per shipment for last-mile providers averages less than $90 per shipment, which is low based on traditional less-than-truckload standards.
This can vary, however, depending on the product being delivered and the value-added services offered. For example, a whole bedroom set delivery may generate $50 in revenue for the last-mile provider, but that could balloon up to $250 by providing installation to the customer.
Armstrong and Associates partnered with the National Home Delivery Association for the study, which identifies current market size, historical growth and outlook, key providers, customers and verticals served, e-commerce’s role, employment, and other trends.