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Urban Last Mile Logistics: The Future of City Parcel Delivery

January 26, 2024 | By Joe Weaver
Last Modified: April 3, 2024
Discover the future of urban last mile logistics. Get insights from experienced logistics professionals. We explain the changing urban delivery landscape.

Urban last mile logistics is the final link in the delivery chain that brings goods to your doorstep. However, delivering shipments to highly-populated cities is a big challenge for all shippers. Crowded streets, chaotic traffic, multi-floor walk-ups, and the constant push for faster deliveries are just some of the hurdles shippers have to clear. 

Per the American Logistics Association, urban last mile logistics is the final delivery phase specific to metropolitan areas. Some aspects of city-based delivery are:

  • Dealing with congested routes
  • Reducing emissions
  • Meeting increasing consumer demands

Logistics providers must adapt to keep up with the changing landscape of final mile delivery while still meeting client expectations.

In this article, we’ll show you how urban deliveries pose unique challengers for shippers. You’ll also learn some strategies for simplifying this process and reducing its high costs. 

Urban Last Mile Logistics: What is the Final Mile?

Urban last mile logistics involve managing deliveries in congested areas such as the heavily-trafficked bridge in this image.

The last mile, or final mile, is the last step in the delivery process – when the shipment reaches the purchaser. 

This stage of delivery is crucial for several reasons:

  • It directly impacts customer satisfaction with timely deliveries.
  • It represents a large portion of delivery costs.
  • The efficiency of this step is key to the success of all logistics operations.

Urban areas add another wrinkle to this already challenging task. It’s evident that shippers need specific strategies for this unique environment.

The last mile problem creates hurdles no matter where the delivery takes place. Find out more about them in this informative article.

How Does Urban Last Mile Differ from Rural or Suburban Areas?

Final mile delivery in highly-populated cities and urban areas presents a number of unique challenges: 

  • The high density of structures and people leads to a large concentration of deliveries in a small area. This increases complexity and creates more opportunities for error.
  • Older, outdated infrastructure is commonplace. Oftentimes, these structures can’t handle large volumes of traffic and deliveries.
  • Slow moving, stop-and-go traffic hinders a fast delivery experience.

Planning and executing deliveries in a small area calls for a more refined approach than rural or suburban neighborhoods. A key aspect of this approach is choosing the right delivery vehicles.

Learn about straight trucks and find the one that will work best for your shipment.

What is the Last Mile Mode of Transport in Urban Areas?

A last mile delivery driver using a bicycle to drop off a package.

The choice of transport mode for last mile delivery is crucial from an efficiency perspective. In an urban setting, it may not be feasible for a fleet of large, noisy trucks to make fast deliveries. 

Vehicles used for urban final mile delivery include:

  • Cargo Bikes

These are becoming increasingly popular in dense urban areas. They can weave through traffic and narrow streets, making them ideal for quick deliveries. They also have the benefit of being eco-friendly since they don’t create emissions.

  • Electric Vehicles (EVs)

These small trucks and vans are a popular alternative to their fossil-fueled equivalents. City dwellers like their low noise levels, and the zero-emission design addresses environmental concerns.

  • Delivery Drones

While currently limited to a few areas, drones are the future of last mile delivery. They fly over ground traffic, reducing delivery times and fuel costs.

  • Autonomous Ground Vehicles (AGVs)

These driverless vehicles navigate city streets free of human operators. They hold the promise of lowering labor costs and increasing delivery efficiency.

  • Scooters and Motorcycles

In cities where congested streets are the norm, two-wheeled vehicles are a practical solution. 

The downside with these is that there is limited cargo capacity, especially with something like a bike or drone. Multiple trips to a distribution hub may then be necessary.

Choosing the best delivery vehicle depends on factors like the city’s configuration and the size of the packages. As urban areas continue to evolve, so too will the methods and vehicles used for last mile delivery. 

Autonomous Delivery Vehicles and Sustainability

With each passing year, more and more consumers factor a company’s eco-friendliness into their buying decisions. This customer demand has contributed to advances in driverless vehicles.

By taking the delivery driver out of the equation, AVs provide many advantages in urban final mile delivery. These include:

  • Reduced Labor Costs

The money that would have gone to hiring a driver can be reinvested in the business.

  • Speedier Delivery

Autonomous vehicles don’t need breaks, which leads to faster and more consistent delivery times.

  • Optimized Routes

AVs can calculate the most efficient routes in real-time, avoiding traffic jams and other delays.

  • Energy Efficiency 

Many autonomous vehicles are electric, leading to lower emissions and high fuel efficiency.

These advantages make autonomous vehicles a promising option for reducing emissions during final mile delivery. Availability of these vehicles is still limited to select cities as both technology and local ordinances adapt. 

For more information about AVs, check out our deep dive on last mile automation.

Why is Last Mile Delivery So Expensive?

An out of focus image showing heavy traffic in a city during the evening.

Have you ever wondered why delivering packages can be so pricey? A large chunk of shipping costs comes from final mile delivery. It’s notorious for racking up the final bill. 

A few factors contribute to the cost of last mile delivery operations, including:

  • Slow, dense traffic
  • Driver wages
  • Demand for fast shipping
  • Parking and access restrictions
  • Failed delivery attempts
  • Reverse logistics (returns)
  • Environmental regulations

These and other considerations make last mile delivery a costly affair. To further illustrate the overall impact of final mile delivery fees, consider the following information.

Final Mile Statistics

53 %Percentage of overall delivery costs associated with the last mile.
41 %Percentage of total supply chain costs attributed to the final mile.

It’s clear that reducing the price of this step in the delivery process can have a huge impact on a business’s bottom line. So, how can we drive those costs down?

Reducing Costs in Urban Last Mile Delivery

An individual transporting multiple boxes on a hand truck.

Here’s a look at some practical approaches to reducing last mile delivery costs in urban environments:

  • Route Optimization Software

Advanced software can analyze traffic patterns, delivery windows, and the most efficient paths to take. 

  • Micro-Fulfillment Centers

Working with smaller warehouses in urban areas can significantly reduce travel distances for deliveries. 

  • Electric and Autonomous Vehicles

As mentioned earlier, AVs cut down on fuel and labor costs. They also satisfy increasing environmental regulations in urban areas.

  • Flexible Delivery Options

Offering customers options such as scheduled delivery windows or grouped deliveries. Doing so can optimize deliveries and reduce costs associated with failed delivery attempts.

  • Regular Maintenance of Delivery Fleet

Maintaining vehicle fleets reduces the risk of breakdowns and improves fuel efficiency, saving money in the long run.

With these strategies, businesses can find the right balance of efficiency, cost-effectiveness, and customer satisfaction. If you’re looking for ways to plan or implement them, we can help.

Some of these may be out of your direct control. However, it serves as a checklist of features when looking for final mile delivery providers. When it comes to saving on logistics costs, remember that the lowest quote you get may end up costing you more in the long run. 

Focus on a company that offers value and quality over low cost, and in the long run both you and your customers will be much happier. 

How USA Last Mile Logistics Improves Urban Deliveries

Urban environments do pose unique challenges in last mile delivery. However, partnering with the right logistics specialists can save you time, money, and frustration.

USA Last Mile Logistics specializes in (you guessed it) last mile delivery solutions. From congested cities to remote rural communities, we have the experience and resources to meet your final mile needs.

Trust us with services such as:

  • Business-to-business deliveries
  • Strategic consulting sessions
  • White glove delivery
  • And more

Call our last mile experts at (866) 569-1445 or send us a request for proposal online. We’re ready to help you meet the increasingly demanding needs of urban last mile logistics. 

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