Business, Feature, Freight News, Logistics

US Big-and-bulky, Last-mile Deliveries Dip

[ August 8, 2024   //   Gary G Burrows ]

US Big-and-bulky, Last-mile Deliveries Dip

            Last-mile e-commerce orders are typically seen as small packages and transported by parcel carriers. However, other last-mile options are significantly growing with expanding e-commerce product categories bulky items such as furniture and appliances, according to Armstrong & Associates Inc., or A&A, the third-party logistics consultant.

            A&A estimates that the 3PL, big and bulky last-mile delivery market experienced a compound annual growth rate of 13.7 percent from 2017 through 2023 but anticipates a dip in CAGR of 9.5 percent from 2024 through 2026, when a rebound is projected.

            A&A partnered with the National Home Delivery Association for the study, Making it Count: Big and Bulky Last-Mile Delivery in the United States, to identify market size, growth, and outlook, key providers, customers and verticals served, estimated route costs and average stops by geography, as well as employment and other trends. They found that 3PLs with last-mile delivery revenues from US$1.2 million to US$1 billion in 2023, representing about 34 percent of the estimated US$10.3 billion U.S.

            This report details and compares the use of independent contractors versus employee drivers, customer and revenue trends by vertical industry, and the growing use of freight brokerage to source last-mile carrier capacity.

            For this report, last-mile delivery is defined as the transportation of big and bulky shipments (not parcels) from the last warehouse or terminal to the final consignee for commodities such as furniture/mattresses, appliances, electronics/high-tech, exercise equipment, construction materials, industrial machinery, or medical equipment to a destination within the U.S. where they will be used or consumed. These can be business-to-business or business-to-consumer shipments.

            Third-party logistics providers with fleets of independent contractors and freight brokerage operations deliver many last-mile orders. In addition, less-than-truckload, last-mile, household goods and truckload carriers are expanding last-mile services for big and bulky items to accommodate the rapid growth in e-commerce retail sales.

            The final transportation leg for an e-commerce order – the last mile – may be short but extremely costly, A&A said in the report. Transportation costs for a shipment from a distribution center or fulfillment center to a customer’s doorstep can account for 30 percent to 40 percent of the total cost of transportation. Last-mile provider revenue per shipment is low by traditional LTL standards and averages less than US$90 per shipment. Total shipment revenue varies depending on the value-added services performed during delivery. A whole bedroom delivery and setup can generate US$250, while a less service-intensive shipment may only generate US$50.

            The NHDA was founded in 2013 among 10 leading home delivery companies specializing in the “white glove” delivery of appliances, furniture and large electronics to homes came together to address common interests. The NHDA has grown to more than 70 member companies representing the leading companies in this logistics industry segment. Collectively, NHDA members account for more than 70 percent of residential “bulky goods” deliveries and setups, utilizing thousands of delivery teams and logistics professionals across the country.

            More information on this report, Making it Count: Big and Bulky Last-Mile Delivery in the United States, and other market research, please visit https://tinyurl.com/5c4nyy8k.

Tags: Armstrong & Associates Inc