LAST MILE DELIVERY MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2025-2032)

Global Last Mile Delivery Market Size and Forecast 2025-2032

The global last mile delivery market is estimated to be valued at USD 190.00 Bn in 2025 and is expected to reach USD 343.12 Bn by 2032, exhibiting a compound annual growth rate (CAGR) of 8.8% from 2025 to 2032.

Key Takeaways of the Global Last Mile Delivery Market

• The B2C (Business to Consumer) segment in the global last mile delivery market is expected to contribute 65. 8% of the market share in 2025.
• The road segment is expected to account for 72% share in the global last mile delivery market in 2025.
• North America has been the dominant region in the global last mile delivery market with an estimated market share of 37. 7% in 2025.

Market Overview

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The last mile delivery process involves the transportation of goods from local distribution centers to the final delivery destination. It aims to deliver shipments as fast as possible using various modes of transportation like roadways and airways. This can be attributed to the rising demand for faster delivery options driven by booming e-commerce sales.

Additionally, improvements in route optimization and adoption of new technologies like drones, autonomous vehicles and IoT is making last mile logistics more efficient and cost-effective. Key players are focused on offering value-added services and innovative delivery solutions to consumers.

Impact of Artificial Intelligence (AI) on the Global Last Mile Delivery Market

Artificial Intelligence (AI) is significantly reshaping the last mile delivery landscape by enhancing operational efficiency, delivery speed, and customer satisfaction.

• Amazon leverages AI across multiple last-mile delivery innovations. Its machine learning algorithms power real-time delivery window predictions, improving customer satisfaction through accurate time estimates. In addition, Amazon’s Scout delivery robots use AI-based obstacle detection and navigation to autonomously deliver small packages in suburban neighbourhoods. Furthermore, the company’s Prime Air drone program, guided by AI and sensor fusion technology, is being tested in select U.S. locations to support rapid, contactless deliveries in both urban and remote areas, aiming to complete deliveries in 30 minutes or less.
• FedEx utilizes deep learning models that factor in real-time weather patterns and traffic conditions to generate more accurate delivery time estimates. The company employs AI to predict and reduce package theft, helping to safeguard shipments and improve customer trust.

Market Trends

• Rapid growth of e-commerce and online shopping

The fast rise of e-commerce, supported by growing internet access, smartphone use, and round-the-clock online availability, has changed how people shop, making online platforms the preferred choice for many. This shift has led to a large increase in the number of last mile deliveries, pushing delivery companies to expand their services with more delivery vehicles, better tracking systems, and additional storage space.

For instance, Flipkart, a major Indian e-commerce company, has teamed up with neighborhood shops and small storage centers to speed up deliveries in smaller towns, helping improve last mile services and customer happiness.

• Increasing consumer demand for quick and efficient delivery

Amazon’s promise of one-day and same-day deliveries has raised customer expectations significantly in recent years. Shoppers now want their online purchases delivered quickly, especially for urgent or time-sensitive needs. In today’s fast-moving urban lifestyle, people are less willing to wait, making fast delivery options sometimes within hours more appealing than ever.

Businesses are setting up small local warehouses and using smaller vehicles to reach customers faster. Strong partnerships between retailers and logistics providers are helping to build an efficient system that supports fast and hassle-free deliveries.

For instance, in October 2023, DPDgroup, Europe’s biggest parcel delivery network, merged with a local delivery firm to boost its role in the fast-growing same-day delivery market. This move aims to offer better and quicker delivery options to customers and meet the rising demand for efficient logistics services.

Market Opportunity - Adoption of innovative delivery technologies (e.g., drones)

One of the key opportunities for the global last mile delivery market is the adoption of innovative delivery technologies such as drones. With advancements in drone technology, delivering shipments through drones can help address the challenges associated with the last mile operations like reducing delivery time and costs involved. Drone delivery has potential to automate the delivery process and bypass traffic complexities in crowded cities.

Major logistics players are testing drone deliveries to analyze their benefits. Wider integration of drones for delivery alongside regulatory changes can improve efficiency, sustainability and open new revenue prospects. It can optimize routes through aerial paths. Drone technology can enable on-demand and same day delivery models which is a fast-growing customer requirement, presenting lucrative opportunities for last mile delivery market.

Current Events and their Impact on the Global Last Mile Delivery Market

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Market Concentration and Competitive Landscape

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Analyst View

• Last mile delivery is no longer a support function it's a brand differentiator. In today’s hyper-competitive e-commerce landscape, over 80% of consumers say delivery speed influences their loyalty to a brand. Companies that fail to meet same-day or next-day delivery expectations risk losing customers to faster rivals. The success of Amazon Prime, with its 200+ million global subscribers, proves how delivery speed has become central to the consumer value proposition.
• Technology adoption is the single most decisive factor shaping last mile efficiency. Leaders like UPS and FedEx are heavily investing in AI-driven routing systems and IoT-based fleet management. UPS’s ORION system reportedly saves 100 million delivery miles annually, showing how algorithmic route optimization directly cuts operational costs and carbon emissions something traditional logistics models can no longer achieve at scale.
• Urban congestion and labor shortages are forcing a shift toward micro-fulfillment and automation. With over 60% of delivery costs tied to the last mile, firms are deploying local delivery hubs and autonomous solutions to reduce inefficiencies. In 2023, Amazon expanded its drone delivery program in California and Texas, targeting 30-minute fulfillment windows this isn’t just innovation, it’s necessity. Players that fail to embrace decentralized infrastructure and automation will be left behind.

Segmental Insights

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Global Last Mile Delivery Market Insights, By Service Type - B2C (Business to Consumer) drives the market, owing to the growing online shopping trends

The B2C (Business to Consumer) segment in the global last mile delivery market is expected to contribute 65.8% of the market share in 2025 due to increasing online shopping activities of consumers worldwide. As more people embrace the convenience of ordering goods with a click on their mobile phones and computers, the need for fast and reliable delivery of purchased items rises steadily.

Key demographic groups driving this trend include tech-savvy millennials and Gen Z consumers who have integrated online shopping into their lifestyles. Their preference for quick access to a wide range of products is fueling the expansion of e-commerce platforms. The availability of a diverse selection of goods coupled with competitive pricing and cash-on-delivery options also encourages more consumers to shop online rather than visiting brick-and-mortar stores.

Consumers' rising expectations for fast delivery times within strict deadlines poses challenges to last mile logistics. However, it presents opportunities for delivery companies to differentiate themselves through innovative services. Several firms now offer same-day or instant deliveries in major cities leveraging their large fleets and strategically located warehouses. Time-slot booking for convenient receipt of packages has also gained popularity.

Moreover, value-added services like option for signature-free drop-off, click-and-collect from pick-up points, and notifications for delivery status updates enhance customer satisfaction with B2C deliveries. Continuous technology upgrades in logistics infrastructure and adoption of fleet telematics further aid in meeting tight delivery windows. The hyper-personalized experience appeals greatly to busy urban consumers.

Global Last Mile Delivery Market Insights, By Delivery Mode - The road segment dominates the market due to the extensive logistics infrastructure

The road segment is expected to account for 72% share in the global last mile delivery market in 2025 owing to a well-established transportation infrastructure across regions. Vast road networks allow for flexible deployment of light commercial vehicles to transport parcels within short distances of the final destination addresses efficiently.

Countries worldwide have invested heavily in highway and intercity road construction over the years to facilitate the movement of people and goods. Major logistics companies leverage this accessibility through ownership of large private fleets or partnerships with independent owner-operators. Last mile routes can be readily mapped and optimized based on traffic conditions with navigation support on mobile applications.

Furthermore, land transport is more cost-effective compared to other modes when it comes to delivering average sized packages on a large scale. Trucks have greater capacity to hold shipments for multiple stops on a single trip. Regulatory compliance is also streamlined for road transport of goods in national as well as international routes.

While other innovative delivery modes gain ground in certain geographies and applications, road infrastructure provides a universal backbone for reliable last mile connection. Integration of advanced technologies like telematics, analytics and IoT further augment operational efficiency of ground transportation fleets. This positions the road segment strongly as the mainstay of urban logistics networks.

Regional Insights

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North America Last Mile Delivery Market Trends and Analysis

North America has established itself as the dominant market for last mile delivery. The region is expected to hold 37.7% of the market share in 2025. With the rise of e-commerce and demand for fast shipping options, customers expect quick and reliable delivery from major retail markets like Amazon and Walmart. North America's dense population near major consumption centers allows for efficient multi-stop routes that keep costs low. Strong domestic consumption and wealth levels have fueled larger basket sizes that have benefited last mile operators through economies of scale.

For instance, in June 2023, Amazon unveiled a new program aimed at collaborating with small businesses across 23 U.S. states to bolster its last-mile delivery capabilities. The initiative, known as Amazon Hub Delivery, welcomes participation from a wide range of small enterprises, including clothing boutiques, florists, and convenience stores. According to Amazon's estimates, small business partners could potentially generate up to USD 27,000 in additional annual revenue by fulfilling delivery duties as part of this program.

Asia Pacific Last Mile Delivery Market Trends and Analysis

The Asia Pacific region has emerged as the fastest growing market for last mile delivery services. Countries like India and China are experiencing major expansion of the consumer class who increasingly prefer online shopping. Rapid urbanization is creating dense population clusters near tier 1 and tier 2 cities that serve as profitable coverage areas. Local logistics companies have invested aggressively to cater to the evolving needs through innovative delivery models. For instance, partnerships with motorcycle taxi services allow for last mile connectivity even in congested areas.

The varying landscape across different APAC markets allows operators to experiment with new technologies and customer-centric approaches. For example, consolidating parcels from different sellers into a single delivery minimizes the number of trips while enhancing environmental sustainability. Lockers at central pickup points enable secure, flexible collection of packages even when customers are not home. As disposable incomes continue rising across Southeast Asia, we expect the APAC region to further its leading position in the global last mile delivery industry over the coming years through continued modernization and optimization of fulfillment networks.

Middle East Last Mile Delivery Market Trends and Analysis

Rapid urbanization in cities like Dubai, Riyadh, and Cairo is driving the demand for fast last-mile delivery, pushing providers to adopt same-day and two-hour services. Companies are deploying smart technologies like drones, IoT, and smart lockers to reduce delivery times and costs in congested urban zones.

Many customers are also choosing greener options, around 50% indicate willingness to pay extra for eco-friendly delivery. For instance, Dubai’s Careem launched its first fleet of electric motorbikes and charging stations in 2024, aiming to reduce CO₂ emissions by up to 24 tons daily.

Latin America Last Mile Delivery Market Trends and Analysis

The Latin America last mile delivery market is experiencing rapid growth, fueled by the booming e-commerce sector and increasing urbanization. This expansion is driven by the adoption of advanced technologies like AI for route optimization and a growing focus on sustainable delivery methods. Major players like Mercado Libre are making significant investments in extensive distribution networks and warehousing across countries such as Brazil and Mexico to enhance delivery speed and coverage, showcasing the market's dynamic evolution.

Europe Last Mile Delivery Market Trends and Analysis

The Europe last mile delivery market is undergoing substantial growth, propelled by the continued rise of e-commerce and a strong focus on environmental responsibility. A dominant trend is the rapid shift towards green delivery initiatives, with a notable increase in the use of electric vehicles and cargo bikes for urban deliveries. Ongoing technological innovation, such as sophisticated route optimization software and the expansion of automated parcel lockers, is also a significant driver. This is evident as major logistics providers continue to integrate sustainable fleets and diversified delivery points across the continent.

Market Report Scope

Global Last Mile Delivery Industry News

• In May 2025, Uber Technologies expanded its international operations by acquiring an 85% stake in Turkish delivery platform Trendyol Go for USD 700 million. This acquisition is part of Uber's strategy to bolster its delivery services and diversify its global footprint amid plateauing growth in North America.
• In May 2025, DoorDash, the leading U.S. food delivery platform, announced its acquisition of UK-based Deliveroo for USD 2.9 billion. This strategic move aims to strengthen DoorDash's presence in the European market. The deal, priced at 180 pence per share, represents a 29% premium over Deliveroo's prior closing price. Deliveroo, operating in nine markets with 180,000 riders, has faced challenges since its 2021 IPO, making it an attractive acquisition target.
• In April 2025, Poland's InPost acquired a 95.5% stake in a U.K. parcel delivery company, Yodel, becoming the third-largest independent logistics provider in the U.K. The USD 136 million deal, structured as a debt-to-equity conversion, expands InPost's capacity to handle approximately 300 million parcels annually and increases its customer base to over 700 e-commerce retailers. This acquisition builds upon their partnership initiated in October 2024.
• In February 2025, Symbotic entered into a partnership with Walmart, agreeing to a USD 520 million program to develop an automated delivery system for Walmart's stores. As part of the deal, Symbotic acquired Walmart's advanced systems and robotics business for an initial USD 200 million, with up to an additional USD 350 million contingent on future orders. This acquisition aims to enhance Walmart's online pickup and delivery processes using Symbotic's AI-enabled robotics.
• In April 2024, PIESHIP, a logistics company located in Saudi Arabia, implemented AI and crowdsourcing strategies to optimize last-mile delivery routes and schedules, with the goal of reducing costs and improving customer satisfaction. Operating in the rapidly evolving logistics landscape of Saudi Arabia, PIESHIP focuses on providing efficient and reliable last-mile delivery solutions, particularly enhancing the service for e-commerce businesses and their customers through improved delivery processes.
• In November 2023, Shipyaari, a leading SaaS-based logistics solutions provider, announced a strategic collaboration with India Post, postal service provider, to transform last-mile delivery in India. This groundbreaking agreement is expected to significantly alter the last-mile operational landscape, allowing Shipyaari to extend its reach into even the most remote regions of the nation.

Macroeconomic Factors Overview

E-commerce Expansion

• Impact: Global e-commerce growth directly amplifies the demand for last-mile delivery services, as the surge in online retail leads to consumer expectations for faster and more reliable delivery, thereby propelling market revenue.
• Details: North America, for example, with its well-developed infrastructure, represents a significant market. This growth is largely driven by the operational scale of major e-commerce platforms such as Amazon and Walmart.

Urbanization and Infrastructure Investment

• Impact: Increased urban density significantly improves delivery efficiency and reduces costs per shipment. This is further supported by government investments in critical infrastructure, including road networks, airports, and distribution centers.
• Details: Robust infrastructure, particularly evident in regions like North America, is pivotal for handling the high volume of deliveries in urban areas, enabling streamlined and more cost-effective logistics operations.

Environmental Regulations

• Impact: Strict sustainability mandates are serving as a key driver for innovation within the last mile delivery market, particularly in the adoption of greener technologies.
• Details: Policies promoting low-emission vehicles, for instance, are accelerating the integration of electric vehicles (EVs) into delivery fleets. Companies like Amazon are actively deploying EVs to reduce urban carbon emissions, thereby aligning with regulatory requirements while simultaneously achieving operational cost reductions.

Geopolitical and Trade Dynamics

• Impact: Geopolitical events and trade dynamics can introduce significant supply chain disruptions, directly impacting delivery costs, particularly through fuel price volatility.
• Details: To mitigate such risks, diversified strategies, including the establishment of localized fulfillment centers, are becoming increasingly common. The Ukraine conflict's impact on global fuel prices, for example, notably accelerated the adoption of EVs by many companies as a strategy to stabilize operational costs.

Microeconomic Factors Overview

Technological Innovation

• Impact: Technological advancements are profoundly enhancing efficiency and reducing costs in last-mile delivery operations through sophisticated tools.
• Details: AI algorithms used for route optimization, such as UPS's ORION system, save approximately 10 million gallons of fuel annually. Furthermore, the deployment of drones and autonomous vehicles by companies like Wing (Alphabet) for rapid deliveries has shown promising results in pilot programs, cutting costs by up to 40%.

Consumer Demand for Speed and Convenience

• Impact: Rising consumer expectations for rapid and convenient delivery services are compelling firms to continuously innovate their service offerings.
• Details: Walmart's "InHome" service, which utilizes smart entry technology for unattended deliveries directly inside customers' homes, perfectly exemplifies how a focus on extreme convenience can become a crucial competitive advantage in the market.

Cost Structures and Competitive Strategy

• Impact: Firms are actively adopting electric vehicles to strategically lower their fuel expenses and gain a competitive edge in their cost structures.
• Details: The declining cost of EV batteries, which has seen a 30% reduction since 2020, is making this shift more economically viable. Dominant players like FedEx are investing heavily in EV fleets, a move that allows them to compress margins for competitors who lack the necessary scale or capital to make similar investments.

Market Segmentation

•  Service Type Insights (Revenue, USD Bn, 2020 2032)
• B2C (Business to Consumer)
• B2B (Business to Business)
•  Delivery Mode Insights (Revenue, USD Bn, 2020 2032)
• Road
• Drone
• Bicycle
• Walking
• Others
• Regional Insights (Revenue, USD Bn, 2020 2032)
• North America
• U.S.
• Canada
• Latin America
• Brazil
• Argentina
• Mexico
• Rest of Latin America
• Europe
• Germany
• U.K.
• Spain
• France
• Italy
• Russia
• Rest of Europe
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• ASEAN
• Rest of Asia Pacific
• Middle East
• GCC Countries
• Israel
• Rest of Middle East
• Africa
• South Africa
• North Africa
• Central Africa
• Key Players Insights
• Amazon Logistics
• DHL Supply Chain
• FedEx Corporation
• UPS (United Parcel Service)
• XPO Logistics
• Schenker AG
• DPD Group
• JD Logistics
• ZTO Express
• Yunda Express
• Postmates (Uber)
• Glovo
• DoorDash
• Lalamove
• Sendy

Sources

Stakeholders

• Logistics Service Providers
• E-commerce Retailers
• Technology Solution Providers
• Delivery Fleet Operators
• Others

Magazines

• Supply Chain Management Review
• Logistics Management
• Transport Topics
• Smart Transportation Magazine
• Others

Journals

• Journal of Business Logistics
• International Journal of Physical Distribution & Logistics Management
• Transportation Research Part E Logistics and Transportation Review
• Others

Newspapers

• The Wall Street Journal
• Financial Times
• The Economic Times
• Reuters
• Others

Associations

• Council of Supply Chain Management Professionals (CSCMP)
• International Warehouse Logistics Association (IWLA)
• Last Mile Experts Alliance
• International Logistics and Supply Chain Management Association
• Others

Public Domain Sources

• Government Transport and Commerce Departments
• World Bank Logistics Performance Index
• United Nations Conference on Trade and Development (UNCTAD)
• Industry Whitepapers and Reports
• Others

Proprietary Elements

• CMI Data Analytics Tool
• Proprietary CMI Existing Repository of information for last 8 years

*Definition: The global last mile delivery market refers to the market for transportation and delivery services for cargo and goods intended for end customers or recipients. It involves transporting and delivering items ordered online from distribution centers or warehouses to their final intended destination such as homes, businesses, PO boxes or other delivery locations. Last mile delivery serves as the final leg of the supply chain and aims to provide seamless, optimized and cost-effective delivery services to meet the needs and expectations of customers.