h1>Last Mile Delivery: Why It’s the Hardest and Most Expensive Part of Shipping

Last mile delivery refers to the final leg of a shipment’s journey — from a distribution hub to the recipient’s address. It sounds simple. In practice, it is the most expensive, most failure-prone, and most customer-visible part of the entire supply chain. A shipment can cross an ocean on schedule and still arrive late because of what happens in the last ten kilometres.

Why Last Mile Delivery Is So Expensive

Ocean freight moves thousands of packages in a single container. A last mile delivery vehicle moves perhaps 80–120 stops per day. The cost per package is therefore dramatically higher, and it does not scale. Furthermore, urban density creates congestion that makes routes unpredictable. Rural delivery adds distance with no density benefit. Consequently, last mile delivery typically accounts for 40–53% of total shipping cost, according to logistics research. That percentage is rising as e-commerce volumes grow and customer delivery expectations tighten.

Failed Deliveries: The Hidden Multiplier

A package that requires a second delivery attempt costs roughly 1.5 times the first attempt. A third attempt costs more still. Moreover, failed deliveries often lead to package holds at depot facilities, which generate customer service contacts, complaints, and sometimes returns. The number one cause of failed first-attempt delivery is the recipient being unavailable at the listed address. In addition, incorrect or incomplete address data on the shipment label causes a significant share of failures.

What Businesses Can Do

Address verification at checkout is the single highest-impact intervention for e-commerce businesses. Clean address data reduces failed deliveries, reduces returns, and reduces customer service volume. Beyond that, offering delivery time windows — even broad ones — dramatically increases first-attempt success rates. Therefore, work with carriers who offer pre-delivery notifications via SMS or email. Most major carriers offer this at no additional cost.

For business-to-business shipments where last mile delivery is to a commercial address, coordinate delivery windows with the receiving team in advance. A dock that is unmanned at delivery time is the commercial equivalent of nobody home. Read our full international shipping guide or contact our team for help on specific routes.

External reference: McKinsey: Last Mile Delivery.