US
In the United States, the last-mile delivery market is experiencing significant growth. In 2023, it was valued at USD 37.74 billion, and it’s projected to rise to USD 62.42 billion by 2030, growing at a compound annual growth rate (CAGR) of 7.5%.
This explosive growth reflects soaring e-commerce demand but also highlights the cost and complexity of the “last mile” or the final leg of the delivery journey, from depot to customer. For transport and logistics businesses, optimizing last-mile delivery isn’t just about speed. It’s about efficiency, cost control, and customer satisfaction.
What Is Last-Mile Delivery?
Last-mile delivery refers to the final stage of the logistics chain, when goods are transported from a local hub or distribution center to the customer’s door. It might sound simple, but this is where many of the supply chain’s costs and risks concentrate. Because deliveries are fragmented across many destinations, and customers now expect fast and transparent service, the last mile is often the most expensive and challenging part of the journey.
What Are the Challenges of Last Mile Delivery?
Last-mile delivery isn’t easy. Here are some of the most common pain points that transport businesses face:
- High operational costs: Fuel, labor, and inefficient routing make the last mile expensive.
- Inefficient route planning: Without optimization, drivers may take longer paths, waste fuel, or make more stops than necessary.
- Lack of real-time insight: Dispatchers often lack real-time insight into driver locations, which hampers service reliability.
- Manual processes: Staff often rely on manual workflows for tasks like scanning proof of delivery (POD), inputting delivery statuses, or handling dispatch, making processes slow and error-prone.
- Customer communication: Customers expect live updates, accurate ETAs, and quick issue resolution. Without transparency, satisfaction drops.
- Scalability limitations: During peak times (e.g., sales events or holiday seasons), manual systems tend to crumble under the pressure of high volume.
It might sound simple, but this is where many of the supply chain’s costs and risks concentrate. Because deliveries are fragmented across many destinations, and customers now expect fast and transparent service, the last mile is often the most expensive and challenging part of the journey.
How Does a TMS Help Improve Your Transport Business’s Last-Mile Performance?
A Transportation Management System (TMS) can be a game-changer for tackling last-mile challenges. Here’s how:
Smart Route Optimisation
A TMS uses algorithms and live traffic data to generate the most efficient delivery routes. This reduces total mileage, fuel use, and labor costs , helping you deliver more stops in less time.
Real-Time Visibility
With GPS tracking built into a TMS, dispatchers and managers can see where every driver is at any moment. That visibility provides up-to-date ETAs and makes it easier to respond to delays or exceptions.
Driver App Automation
Drivers use mobile apps linked to the TMS to scan packages, collect digital proof of delivery, and send status updates. Everything is digitized, reducing manual data entry and the risk of mistakes.
Accurate ETA Notifications
A TMS can push live ETA updates to customers, giving them more transparency and improving their experience. These messages reduce “when will my parcel arrive?” queries and build trust.
Faster, Smarter Dispatching
Dispatchers can use the TMS to automate workflows (assigning jobs, rescheduling, handling exceptions). This speeds up turnaround, especially when there’s a sudden change or a missed delivery.
Streamlined Communication
The TMS supports in-app messaging between drivers and dispatchers. It ensures instructions are clear, issues get flagged, and everyone stays aligned.
Scalability
As volume grows, the TMS’s automated features scale too. More deliveries, more drivers, more routes — the system can absorb this growth without collapsing under manual load.
Cost Savings
By optimizing routes, reducing manual tasks, and improving transparency, a TMS lowers operating expenses. Over time, savings from fuel, labor, and fewer failed deliveries add up.
Why You Need a TMS to Manage Your Last-Mile Deliveries
| Last-Mile Challenges | How a TMS Solves It |
|---|---|
| Inefficient routes | Route optimization, live traffic integration, turn-by-turn navigation |
| Poor visibility | Real-time GPS tracking, driver status updates, live ETA feeds |
| Slow manual workflows | Automated dispatching, digital PODs, barcode scanning |
| High failure rate or delivery errors | Address validation, geofencing, accurate package scanning |
| Customer frustration | ETA notifications, live tracking links, delivery status alerts |
| Communication gaps | In-app messaging, driver-dispatcher chat, clear task instructions |
| Scaling during busy times | Automated workflows, multi-carrier support, custom business rules |
Why Our Clients Trust Our Logistics Solutions
"Transvirtual helps us by providing a platform with real-time data and information that we can pass on to our customers and exceed their expectations. I would absolutely recommend Transvirtual to every other freight company because of their customer support. Their platform is user-friendly and they offer a complete end-to-end solution."
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Frequently Asked Questions
- What is a last-mile delivery TMS?
A last-mile delivery TMS (Transport Management System) is software designed to help transport businesses manage and optimise the final stage of the delivery process, from the depot to the customer’s door.
It gives you tools like route optimisation, real-time tracking, digital PODs, automated dispatching, and customer notifications. The goal is simple: to help you deliver faster, more accurately, and with fewer manual tasks slowing you down.
- What does it mean when my package is already at the last mile stage?
When your package is “at the last mile stage,” it means it’s now with the local delivery driver or courier who will complete the final leg of the journey.
This is the point where the parcel leaves the closest depot or hub and is scheduled for delivery to your home or business. In most cases, this means your package is very close and will arrive soon, often the same day.
- Why is a Transport Management System essential in last-mile operations?
A Transport Management System is essential because last-mile delivery is the most complex and expensive part of the logistics chain. A TMS helps you stay on top of it by:
Planning smarter, more efficient routes
Giving real-time visibility into every driver and delivery
Automating tasks like dispatching, scanning, and POD collection
Improving communication between drivers, customers, and dispatch teams
Reducing delivery errors and delays
Creating a smoother, more predictable delivery experience
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