Last Mile Delivery Market Heats Up With Raft of New Developments

In spite of holiday season, the last week has seen a number of exciting developments in the last mile delivery sphere, involving DoorDash, Uber, Geodis and Shopify. The global last-mile delivery market has been steadily increasing in value with the rise of e-commerce and online retailing. The pandemic turbocharged the growth of this sector, in not just retail but many other sectors as well, and  is forecast to grow to hundreds of billions of dollars worldwide over the next five years. Enabled by technology platforms and the rise of the gig economy, there have been several new entrants offering delivery from within the hour to same day or evening service. With density being the primary factor in reducing unit costs, almost all the start-ups are aligned with either restaurants, grocers, or retailers to ensure a steady stream of “quick commerce” deliveries. The innovative technology and operating business models have attracted significant stakes from investors.

Probably the most interesting last mile delivery development is Facebook Marketplace’s deal with DoorDash that offers sellers a delivery option to buyers within 15 miles. DoorDash Drive, its B2B service that provides drivers to merchants, is now testing the Facebook service. The trial covers several US cities. All items that can fit into the boot of a car and are located up to 15 miles away are eligible for the service. The service offers security to buyers not wanting to interact with strangers and benefits those without a car to collect or transport items locally.

DoorDash also announced this week that US-based Grocery Outlet has partnered with DoorDash to provide on-demand grocery delivery from more than 398 locations across the United States. The partnership enables DoorDash’s customers to order groceries on demand from Grocery Outlet’s local stores. DoorDash is expanding rapidly and has partnered with a range of clients. It now delivers toiletries, prescriptions, household essentials, clothing, cosmetics and more. The company has partnered with Rite Aid, Bed Bath & Beyond, JCPenney and Sephora, among other retailers.

In separate last mile news, Geodis announced that it has signed an agreement to acquire US company Need It Now Delivers, increasing the former’s position in contract logistics and last mile delivery. Need It Now Delivers operates a broad domestic road freight network, with 65 locations and 300 distribution points, with a particular strength in the eastern US. The company specialises in distribution, last mile delivery and multi channel contract logistics. It is part-owned by management along with private equity firm Palm Beach Capital. The company employs 2,000 staff with revenues of $750m. This acquisition comes a month after its recent acquisition of Keppel Logistics which expanded its activities in ecommerce fulfilment in Asia.

To round off the last mile delivery news, last mile specialist Urb-it announced that its last mile delivery services are now available to all merchants using Shopify. Urb-it’s last mile delivery services are now available in Europe’s largest cities. Founded in 2014, Urb-it is a Swedish company headquartered in Stockholm. The company offers same day, next day, standard delivery and returns, carried out by couriers on foot, bike or via its e-cargo fleet.

Source: Transport Intelligence, 25th August 2022

Author: Paul Chapman