Last mile

What it means

The last mile is the final leg of delivering a parcel from a distribution centre to the customer's home or a pickup point. Although it is the shortest part of the journey, it is the most expensive part of online store logistics: couriers visit many addresses with small parcels and often find nobody at home.

For the customer, the last mile is also the most visible part of the purchase. Speed, reliability, a choice of delivery slot and status updates strongly affect satisfaction and willingness to buy again. Expensive or inconvenient delivery is a frequent cause of abandoned carts.

That is why pickup points and self-service lockers, which concentrate many parcels in one place, are spreading, along with timed delivery slots. Large cities are also adding greener options such as cargo bikes and electric vans.

How it works in practice

An online shop usually offers several delivery options at different prices and speeds. Pickup points and lockers tend to be cheaper than home delivery and, for many customers, more convenient. Free delivery above a certain order value is a sensible way to raise the average basket.

With external fulfilment or a 3PL provider, the provider often handles hand-over to carriers and negotiated rates too. Small shops get better prices through shipping aggregators that pool the volume of many merchants.

Last-mile costs belong in the costing of every order, together with packaging, cash on delivery and returns. For cheap goods delivery can exceed the margin, in which case the minimum order value or delivery prices need adjusting.

What to watch out for

Liability for a parcel in transit is governed by the contract of carriage and the terms and conditions. When selling to consumers, the seller usually bears the risk of loss or damage until handover, so it needs a clear procedure for claims against the carrier.

Inaccurate delivery promises damage trust and ratings. If the carrier is running late in peak season, it is better to warn customers in advance and reset expectations than to deal with dozens of complaints and negative reviews after Christmas.