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Home » Big and bulky last-mile delivery segment set for hot growth

Big and bulky last-mile delivery segment set for hot growth

Sector will grow at 11.8% annually from 2022 through 2025, Armstrong & Associates says.

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December 30, 2022
Supply Chain Quarterly Staff
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One of the fastest growing segments of the third party logistics (3PL) segment over the next three years will be big and bulky last-mile delivery, according to a study done by consulting firm Armstrong & Associates (A&A) and the National Home Delivery Association (NHDA).

The joint market research report, titled “Making it Count: Big and Bulky Last-Mile Delivery in the United States,” analyzed 3PLs with last-mile delivery revenues from $7 million to $1 billion that represented approximately 40% of the $9.3 billion U.S. 3PL big and bulky last-mile delivery market.

Wisconsin-based A&A estimates the sector experienced a compound annual growth rate (CAGR) of 18.2% from 2017 through 2021 and will have a CAGR of 11.8% from 2022 through 2025.

Much of that growth is driven by rising e-commerce retail sales for product categories such as furniture and appliances, A&A said. But as opposed to the parcel carriers that transport the small packages purchased through typical e-commerce orders, those large items are hauled over the last mile by 3PLs with fleets of independent contractors and freight brokerage operations. Other groups currently expanding their last-mile services for big and bulky items include less-than-truckload (LTL), last-mile, household goods, and truckload (TL) carriers.

Despite the rising volume of goods, last-mile provider revenue per shipment is low by traditional LTL standards, averaging less than $90 per shipment. However, total shipment revenue varies depending upon the value-added services performed at the time of delivery. For example, a whole bedroom delivery and setup can generate $250 while a less service intensive shipment may only generate $50.

A&A also found that the final transportation leg for an e-commerce order—the last mile—may be short, but it can be extremely costly. Transportation costs for a shipment from a distribution center or fulfillment center to a customer’s doorstep can account for 30% to 40% of the total cost of transportation, the study found.

 

 

Third-Party Logistics Trucking
KEYWORDS Armstrong & Associates
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