16 Last Mile Opportunities Delivery Businesses Need for 2024

1. High-stakes delivery: the rise of high-value item shipping

E-commerce’s expansion has led to a notable shift in consumer and retailer confidence, with the parcel, post and delivery sector increasingly entrusted with high-value items.

Carriers like UPS have already defined specific thresholds for what they classify as high-value items. Like musical instruments over $10,000 and jewelry exceeding $3,000.

• Delivering high-value goods requires new procedures, including comprehensive insurance and robust ID verification technology to ensure secure and verifiable delivery.
• Adapting to this trend requires postal and delivery services to implement stricter security measures and more reliable delivery confirmation methods.

2. Prescription for success: pharma in the last mile

The drug delivery market is projected to reach $2.89 trillion by 2032 presenting a huge opportunity for last mile delivery firms.

By the end of 2024, new US regulations come into force for pharmaceutical manufacturers and their supply chain trading partners. They will be required to implement a 100% electronic and interoperable system for the secure exchange of item-level product traceability information.

• Technological advancements for greater visibility real-time tracking solutions, and reliable proof of delivery with ID verification technology are key.
• Investment in temperature-regulated transportation and storage facilities is crucial for the secure and punctual delivery of pharmaceuticals.
• Compliance is also important. Secure transport and track & trace solutions should be implemented for pharmaceuticals.

3. Cross-border commerce: navigating the taxation hurdle

The global nature of e-commerce allows consumers to easily purchase goods from international platforms like Aliexpress and Teemu directly from China.

This convenience also introduces complexities such as additional tax charges. There is an opportunity to make it simpler for customers to pay on the doorstep, rather than visit a depot or pay online.

• Innovative solutions are emerging to assist in collecting these taxes, with last mile delivery personnel increasingly being equipped to handle payment transactions.
• The use of smart devices for mPOS by delivery workers in the last mile is a growing trend. It enables delivery drivers to process these additional payments efficiently without needing extra equipment.

4. E-commerce delivery: the fast track to growth

E-commerce is still a pivotal area for delivery businesses. And with it is the demand for rapid and efficient delivery services.

Companies poised to revamp their last mile strategies can expect to grow.

• E-commerce remains a robust sector, with 84% of last mile delivery businesses prioritizing it for the upcoming five years, as per Escher’s Future of Posts report.
• Postal services are uniquely positioned to leverage their existing networks for e-commerce, offsetting dips in traditional mail.
• Competitiveness hinges on bringing in the right technology for automation and last mile optimization, such as smart data capture-enabled devices, to speed up delivery speeds.

5. Return to sender - the untapped potential of reverse logistics

Postal operators are presented with the challenge and opportunity of refining reverse logistics. Surprisingly, 42% of postal services report no increase in demand for returns. Yet global trends point towards a significant rise in return volumes.

• The Future of Posts report suggests that offering enhanced return services could be a lucrative move for the postal sector.
• Postal operators should look to streamline at-home return admin to make the process more user-friendly and efficient. For example, label printing or more drop-off choices like lockers.
• Batch scanning with products like MatrixScan Count is essential to make the return from the PUDO point, or the van to the depot, more efficient.

6. A greener last mile: sustaining ROI and the planet

Pursuing sustainability is a well-established goal in last-mile logistics. Yet the rapid rise of next-day delivery demands presents a complex balancing challenge.

Businesses that successfully combine sustainability with efficiency stand to gain a significant edge. Especially if they avoid incurring steep costs. Better still, it can be offered as a premium service.

• 60% of consumers are interested in using more environmentally friendly delivery methods (Descartes, 2023)
• A competitive advantage awaits those who can integrate sustainability into their rapid delivery models.
• Dynamic routing and innovations like adopting electric vehicles, as demonstrated by Swiss Post’s 60% electric delivery fleet, are at the forefront of this initiative.

7. Identity checking on the doorstep: revenue from new technology

The ability to capture identity document data with smart devices opens up the door to new revenue streams. A good example of this is the French postal service La Poste, a Scandit client.

La Poste innovation manager Jose Vazquez said: “When you deliver signed letters with a mobile device, you can do much more,” Vazquez said. “You can create services. For example, taking timed pictures or legal validations. This can become a new service that you can sell.”

• Deutsche Post offers a secure identity verification service for sensitive deliveries. It includes opening a bank account or accessing personal health information.
• Organizations are under pressure to move more high-risk interactions online. However, the need to establish trust in the user’s real-world identity must be balanced with expectations for minimal friction in the user experience (Gartner).

8. Government services: last mile market's growth trajectory

The last mile delivery market, essential for the secure and timely delivery of items like legal documents, credit cards, and passports, was valued at $132.71 billion in 2022 and is projected to grow at a CAGR of 8.8% from 2023 to 2030, according to Grand View Research.

• The Escher report also called out that government services like delivering passports have increased from 9% last year to 19% this year. This is an investment priority for post offices.
• FedEx offers a one-stop shop for renewing US passports. Its Postal Service revenue from passport applications was $337.3 million.

9. Post office revival: reinventing the postal experience

Postal operators should recalibrate their retail strategies to the customer experience. According to Escher, over 56% of postal companies are rethinking their retail strategy.

Retail post offices still have a part to play. In the UK, a survey conducted by Public First Research found 43% of small businesses believed that the Post Office is important to their business.

• Modernizing customer experience in retail postal channels is a key priority for postal operators.
• Investment is going into in-store operations, digital interactions, and self-service facilities like modern post counters, online services, and smart lockers.
• Leveraging post offices to offer financial services and identity products presents another opportunity to diversify revenue streams.

10. PUDO progress: a strategic shift for the last mile

PUDO solutions for service efficiency is a growing trend in e-commerce. Europe is leading the way with a surge of 51% since 2021, contributing to a 7% year-on-year growth in total PUDO points, according to the Last Mile Experts.

• The adoption of PUDO solutions within EMEA has surged to 51%, up from 37% the previous year, illustrating a growing trend.
• Postal services plan a 30% expansion in PUDO locations to manage costs and adapt to variable delivery volumes more effectively.
• Give PUDO point staff the right tools. For example, keeping on top of inventory management and ID scanning for proof of identity.

11. Navigating the future: dynamic routing in postal delivery

Dynamic routing stands out in the ‘Future of Posts 2023’ report as a key driver for delivery operation improvements in the postal sector, though its role is often understated in broader strategic conversations.

Data-driven optimized routing can be key to reducing costs and improving efficiency.

• 47% of last mile businesses use dynamic routing to enhance reverse logistics efficiency.
• Dynamic routing is employed by 58% of postal operators to effectively handle spikes in parcel volumes, underscoring its importance in operational strategy.
• By optimizing delivery routes, businesses can reduce the number of vehicles needed for deliveries. This can result in lower fuel costs, reduced maintenance costs, and improved resource efficiency.

12. Express delivery - an e-commerce battleground

Next-day delivery is emerging as a critical e-commerce service offering, outpacing other options. Companies recognize that providing rapid fulfillment is not just a nice-to-offer but a necessity to stay ahead.

• Next-day delivery is a primary focus for e-commerce businesses, highlighting the importance of speed in customer service.
• 1-hour or 10-minute delivery is nothing new for consumers. So delivery companies need to be fast, but not at the cost of quality and profitability.
• According to the ‘Future of Posts’ report, on a scale of 10, next-day delivery holds an 8.5/10 priority, overshadowing other logistical considerations in e-commerce.
• The European Express Delivery Market size is anticipated to reach a valuation of $90.6 billion by 2027 and register a CAGR of 7.1% from 2022 to 2027.

13. Efficiency unboxed - leveraging logistics hubs

Operational efficiency is a perpetual quest. There is evidence that organizations lack an understanding of the opportunities digital technologies can bring to workflows.

Here are some leading initiatives to streamline warehouse and distribution center operations. They include faster order shipping, managing inventories effectively, reducing costs of errors, and providing adaptable space to accommodate seasonal demand fluctuations.

• Investments in logistics infrastructure and assets enable economies of scale while distributed logistics networks reduce strain on individual facilities and provide redundancy.
• Automation and technology adoption improves throughput and efficiency. This includes giving employees access to the best tools.

14. Deliver and build: customer expectations in the fast lane

Consumers’ desire for convenience has shifted to assembly services. The willingness to pay for assembly services is growing, driven by busier lifestyles and a decline in do-it-yourself skills.

A significant 70% of consumers are willing to pay extra for products to be assembled upon delivery.

• Major retailers like Amazon, IKEA, and NordicTrack offer a range of delivery services, with fees based on the size of the item and the delivery location. Delivery times can vary from a few weeks to as fast as 1-2 days for expedited service.
• While IKEA and NordicTrack provide instructions for self-assembly, professional service is available for those willing to pay extra, usually between $79 and $250.

15. Bulky business: the booming last mile market

The delivery of large items, such as furniture and appliances, is becoming a lucrative niche in the logistics industry, with an 18.2% annual growth from 2017 to 2021.

It is expected to expand at 11.8% each year up to 2025, driven by increased e-commerce transactions for substantial products.

• A surge in online purchases of large items like mattresses, fitness gear, and patio furniture propels this rapid market growth.
• The complexities of bulky item delivery, including higher costs and intricate service requirements, present logistical challenges for companies.
• Investing in optimization strategies and specialized equipment, such as lift gates, is essential.

16. Smart deliveries: The future of home reception

The proliferation of smart home devices offers last mile delivery services a chance to put convenience and personalization first.

As homes become more connected, these services are poised to integrate with the smart home ecosystem, allowing for secure and innovative delivery options. Although this is a niche market right now, it could grow further in the future.

• Smart locks are revolutionizing package security by granting couriers one-time access to deposit parcels safely inside customer homes.
• Home scanning, such as Scandit’s Web SDK, allows customers to scan in their details rather than filling them in.
• Voice-activated smart speakers are enhancing customer convenience, providing updates on delivery status and tracking without the need for manual checks.

Looking ahead - what to do next

As we look to 2024, last mile delivery businesses face a challenging landscape but one with opportunities for innovation and growth.

You may have noticed one half of this list focuses on how to optimize and automate existing services to save costs and increase profitability. The second looks at building and scaling new revenue streams through service diversification.

Technology can be the solution. If it is applied to employee smart devices it offers the ability to scale easily.

Interested in discovering more? Get in touch, and we’ll show you how.