Retail and consumer goods
Last mile
The final step of delivery, from a local hub to the customer's door.
Last reviewedWhat does Last mile mean?
The last mile is the final leg of a delivery, from the nearest warehouse, store or hub to the customer. It is often the most expensive part of delivery per parcel, because each stop is separate, addresses are spread out and failed deliveries need a second attempt. Cost per delivery falls with drop density, meaning how many deliveries a rider or van makes per hour. Example: a rider costing 300 a shift who makes 20 deliveries costs 15 per order; at 30 deliveries it is 10. Parcel lockers, pickup points and batching orders are ways to cut last-mile cost.
Where does it come up in case interview prep?
- How e-commerce and marketplaces make moneyLesson in E-commerce, marketplaces, and quick commerce
- Order economics: last mile, dark stores, and returnsLesson in E-commerce, marketplaces, and quick commerce
- How logistics works: carriers, forwarders, warehouses, ports and the last mileLesson in Logistics, shipping, ports and supply-chain services
- Logistics economics and operations: voyages, rerouting, warehouses and the last mileLesson in Logistics, shipping, ports and supply-chain services
Related terms
- Dark storeA small warehouse, closed to shoppers, used only to fill online orders quickly.
- Quick commerceDelivering groceries and daily items in about 10 to 30 minutes.
- Unit economicsThe revenue and cost of one unit: one product, order or customer.
- Capacity utilizationActual output as a share of the most that could be produced.
- Like-for-like sales (LFL)Sales growth from stores open in both periods, leaving out new and closed stores.
- Sales per square metreStore sales divided by selling space: how productive the space is.
- Shrink (shrinkage)Inventory lost to theft, damage, errors or spoilage.
- MarkdownA lasting price cut to clear stock that is not selling.