After the arrival of goods at high-capacity freight stations or ports, they need to be transported to their final destination and this last leg of the supply chain is often referred to as the "last mile problem.” The aim of last mile logistics is to ensure both increased efficiency and minimized cost in delivery. In a 2017 global retail supply chain survey carried out amongst retailers and manufacturers worldwide, reducing costs and improving margins were considered the most important priorities of last-mile delivery initiatives.
The last mile problem can also include the challenge of making deliveries in urban areas with safety and congestion problems. In a breakdown of parcel delivery costs in developed and dense cities, labor cost accounts for the majority of expenditure in either traditional B2B delivery or diesel-based deliveries from urban consolidation centers. In 2017, the mileage used in the delivery of a parcel using diesel-based delivery from urban consolidation centers amounted to 1.9 kilometers per cubic meter, 45 percent less than a traditional B2B delivery.
Last mile delivery is also becoming more important than ever due to the surge in digital buyers worldwide, as retailers try to secure transportation networks for traffic fluctuations caused by the growth in online sales. In an April 2017 survey on American consumers who shop online, most of the respondents stated that United Parcel Service (UPS) is the parcel service that usually delivers the items they purchase.