What Is Last Mile Delivery? Process & Meaning

TL;DR: Last-mile delivery refers to the final leg of a product’s journey – from a local distribution hub or warehouse to the customer’s doorstep or pickup point. It is the most customer-facing and costly segment of the supply chain, often accounting for roughly half of total shipping costs (onfleet.com, trackonomy.ai).

For businesses, success in last‑mile execution is critical to customer satisfaction and loyalty (frayt.com). The process involves order entry, routing, real‑time tracking, and proof of delivery. Key factors include delivery speed, reliability, and flexibility (e.g. offering different delivery options). Regulations in Belgium now require greener choices (e.g. parcel lockers or bike couriers) (transport.ec.europa.eu, nshift.com).

Leading carriers in Belgium and the EU – such as bpost, PostNL, DHL, VPD and others – differentiate themselves by coverage, speed, and eco-friendly services (ingrid.com). Advanced technologies like AI routing and live tracking are helping to reduce costs and improve on‑time rates (fareye.com, trackonomy.ai).

Definition & Cost

1. Definition: Last mile delivery is the final step of the logistics journey, taking goods from a local hub to the end customer (onfleet.com, ryder.com).
2. Cost‑Intensive: It often makes up the largest share of shipping cost (often 40–50% of total delivery cost) (onfleet.com, ryder.com).
3. Customer Experience: This stage heavily influences customer satisfaction, loyalty and brand perception (frayt.com).
4. Delivery Options: Modern regulations and consumer demand require multiple delivery choices (home, locker, pickup) and at least one sustainable option (transport.ec.europa.eu, nshift.com).
5. Technology: AI and tracking technologies are crucial for optimizing routes, reducing delays and giving real‑time visibility to businesses and customers (fareye.com, trackonomy.ai).

What is last‑mile delivery in logistics?

Last-mile delivery is the final stage of the shipping process – moving parcels from a local depot or transportation hub to the end recipient’s address (home or business). In other words, once an order leaves the warehouse or distribution center, the very last leg to the customer’s door is known as the “last mile” (onfleet.com, ryder.com).

This step is critical because it is the customer’s most direct interaction with the delivery service. It is also the least efficient and most expensive segment of shipping (onfleet.com, trackonomy.ai). Industry studies note that last‑mile delivery often accounts for over 50% of total delivery costs (onfleet.com).

Customers today expect fast, transparent service at this stage – including tracking updates and tight delivery windows – so businesses strive to make it as quick and reliable as possible (onfleet.com, ryder.com). Any delays or failures here directly impact customer satisfaction and brand reputation (frayt.com).

The last mile is especially challenging in dense urban centers due to traffic and parking constraints, and in rural areas due to distance and low package density. European cities like Brussels and Antwerp have introduced Low-Emission Zones (LEZ), restricting older diesel vehicles, which affects which delivery trucks can operate there (transport.ec.europa.eu, trackonomy.ai).

In response, carriers are using cleaner vehicles and even e-bikes or lockers for the final drop-off. In Belgium, new regulations (the 2‑option delivery rule) legally require at least one eco-friendly delivery choice at checkout (nshift.com, transport.ec.europa.eu).

Key Points

1. Definition: Final segment from a local depot to customer’s doorstep or store (onfleet.com, ryder.com).
2. Customer Touchpoint: Last‑mile delivery quality greatly shapes customer satisfaction, loyalty, and repeat business (frayt.com).
3. High Cost: It is the most expensive part of shipping; e-commerce studies report it can be ~50% of total logistics cost (onfleet.com, ryder.com).
4. Regulated for Sustainability: Belgian law now mandates multiple delivery methods (including green options) to reduce congestion and emissions (nshift.com, transport.ec.europa.eu).
5. Visibility & Speed: Real‑time tracking and guaranteed delivery windows have become standard expectations for modern consumers (onfleet.com, ryder.com).

What are the steps in the last‑mile delivery process?

The last‑mile process typically involves order processing, sorting, route planning, and final delivery with proof of receipt. Once a customer places an order, it is scanned into the carrier’s system and sent to a local hub or depot (onfleet.com, ryder.com).

There, parcels are sorted and assigned to a delivery person based on address and delivery route (onfleet.com, ryder.com). The driver then follows an optimized multi‑stop route, often using software to account for traffic, delivery time windows, and vehicle capacity (ryder.com, fareye.com)…

1. Order handling: Customer orders are logged and sent to the local distribution center (onfleet.com, ryder.com).
2. Hub sorting: Packages are scanned and sorted by delivery area. Orders are grouped by route and vehicle (onfleet.com, ryder.com).
3. Route planning: Delivery routes are optimized (often with AI) for distance, traffic, and time windows (fareye.com, ryder.com).
4. Final delivery: Drivers load parcels, follow the planned route, and deliver to each address. They capture delivery proof (signature/photo) (onfleet.com, ryder.com).
5. Confirmation: Customers and sellers receive confirmation (tracking update), and any exceptions (missed delivery) are handled.

How do B2B and B2C last‑mile delivery flows differ?

B2B deliveries are usually scheduled, bulk shipments to businesses with fixed time windows, while B2C deliveries are one‑off, consumer‑address shipments requiring flexibility and tracking…

1. Schedule vs. on‑demand: B2B routes are pre‑scheduled regular deliveries; B2C deliveries happen continuously as customers order (track‑pod.com).
2. Order size: B2B shipments tend to be larger (pallets, bulk goods); B2C shipments are usually individual items.
3. Delivery options: B2C offers multiple options (home drop‑off, lockers, click‑&‑collect); B2B usually uses a single agreed service (track‑pod.com).
4. Time windows: Businesses have fixed delivery windows; B2C may allow narrow 1‑hour slots or evening delivery.
5. Transparency & Service: B2C customers expect live tracking, notifications and easy returns; B2B focuses on DIFOT and billing.

Why is last‑mile delivery important for business performance and customer satisfaction?

Excellent last‑mile performance is critical because it directly affects customer experience, loyalty, and a company’s bottom line…

1. Customer loyalty: A positive delivery experience (on‑time, intact) greatly boosts satisfaction and loyalty (frayt.com, trackonomy.ai).
2. Brand reputation: Failed or delayed deliveries lead customers to switch brands – 84% won’t return after a bad delivery (frayt.com, trackonomy.ai).
3. Sales impact: Clear delivery promises can increase online conversion rates and sales (frayt.com).
4. Competitive edge: Fast, transparent service improves differentiation.
5. Cost control: Efficient last‑mile logistics reduce wasted trips and protect profit margins (onfleet.com, ryder.com).

How does technology (e.g., tracking, AI routing) improve last‑mile delivery?

Modern technology is central to optimizing the last mile – for example, AI‑driven route planning slashes travel time and real‑time tracking boosts visibility and customer trust…

1. AI route optimization: Uses algorithms to plan efficient, dynamic routes – can reduce delivery times and fuel use by up to 20% (fareye.com).
2. Real‑time tracking: GPS‑enabled tracking provides transparency and reduces failed deliveries – live tracking can cut costs by ~20% (trackonomy.ai).
3. Dynamic scheduling: Systems reassign routes on‑the‑fly to maintain on‑time rates.
4. Customer communication: Automated notifications (ETAs, updates) reduce no‑shows.
5. Sustainability: Use of EVs, cargo bikes, and EU green logistics initiatives (transport.ec.europa.eu).

Cost factors, delivery success rates & operational challenges

1. Labor & fuel: Driver wages and fuel/charging costs per delivery (ryder.com, onfleet.com).
2. Delivery failures: 6–8% of deliveries fail, costing ~$17 per failed attempt (trackonomy.ai).
3. Traffic & access: Congestion, parking limits, LEZs slow down deliveries (transport.ec.europa.eu, trackonomy.ai).
4. Fleet diversity: Vans, bikes, EVs – higher capital costs.
5. Regulatory compliance: EU driver status laws and Belgian parcel-distributor rules add costs (europarl.europa.eu, paycover.be).

Key last‑mile delivery players in Belgium and the EU

1. bpost (Belgium): National postal service, 3,000+ pickup points; ~21% emission‑free delivery (ingrid.com).
2. PostNL (Netherlands): ~800 pickup locations in Belgium (ingrid.com).
3. DHL: Global leader for fast domestic & international delivery (ingrid.com).
4. VPD (Belgium): Specialist courier emphasizing agility and service (ingrid.com).
5. Trunkrs: Same‑day/next‑day, eco‑focused Benelux courier (ingrid.com).
6. Other EU carriers: DPD, GLS, UPS, FedEx – all growing tech & green fleets.

Frequently Asked Questions (FAQ)

Q: What distinguishes last‑mile delivery from other shipping stages?

A: It’s the final handover—most complex, costly phase requiring individual stops, with focus on timing, condition, and communication.

Q: How can companies reduce last‑mile costs?

A: Optimize routes (AI), consolidate deliveries, use micro‑hubs or lockers, shift deliveries off‑peak, and use eco‑vehicles.

Q: What are “delivery lockers” and why are they important?

A: Secure automated boxes for parcel drop‑off; reduce failed deliveries, eco‑friendly, and part of Belgium’s green delivery rules.

Q: How do low‑emission zones (LEZ) affect delivery?

A: Cities restrict high‑emission vehicles; carriers must use compliant EVs or face fines—driving green fleet investment.

Q: What is an acceptable last‑mile success rate?

A: Top carriers aim for ≥ 95% same‑day success. Average failure rates: 6–8%. Communication and flexibility help improve scores.

Q: Why is real‑time tracking important?

A: Tracks transparency, reduces failed deliveries; live tracking can cut delivery costs by up to 20% (trackonomy.ai).

Q: How are regulations changing delivery in Belgium?

A: Belgian Commercial Code now mandates ≥ 2 delivery options (one green). New parcel‑distributor law requires courier registration and worker protections (nshift.com, paycover.be).

Q: Who regulates last‑mile standards?

A: EU: Platform Work Directive and Zero‑Emission Logistics framework. Belgium: national laws and city LEZs.

Q: How do technology and sustainability intersect?

A: AI for EV routing, smart lockers, bike couriers, and EU policies align to make last‑mile both green and efficient (transport.ec.europa.eu, fareye.com).