Last-Mile Delivery

The last mile is the final leg of a shipment's journey: it runs from the last logistics node (warehouse, distribution center or urban hub) to the recipient's door. It is the phase the customer actually sees and, paradoxically, the hardest and most expensive in the entire chain, because it shifts from moving large consolidated volumes to making single, scattered deliveries, house by house.

In practice, it accounts for a disproportionate share of total distribution cost: according to a Capgemini Research Institute survey of 500 retail and consumer products executives, it represents 41% of total supply chain cost, more than double any other stage (Capgemini, 2019). The reason is structural: every stop adds handling time, the risk of the customer not being home, redelivery attempts and miles that cannot be spread across many packages. That is why it is where traceability and route optimization make the biggest difference.

From a logistics standpoint, the last mile is exactly what tracking and traceability platforms such as Trazzo aim to make visible and efficient: knowing where every order is, anticipating missed deliveries and organizing the day's routes.

For the customer, the last mile is the entire delivery experience. However efficient the rest of the chain is (import, warehousing, line-haul transport), if the package arrives late, damaged or never arrives, what sticks in the buyer's memory is that final failure. That is why it stopped being a background operational issue and became a loyalty and cost lever that logistics leadership watches, not just the warehouse.

Why it is the most expensive stage

Line-haul transport moves a lot of volume in a few long trips, so the cost per unit is low. The last mile flips that logic: many different destinations, short stops, time windows, urban traffic and hard-to-find addresses. Each of these factors adds cost that does not get diluted:

• Delivery density: delivering 5 packages in a neighborhood costs far more per unit than delivering 50 in the same area.
• Redeliveries when nobody is home: if the customer is not there, the second (or third) attempt doubles the driver's mileage and time.
• Imprecise addresses: in much of Latin America, street naming is irregular, which makes geocoding essential to avoid wasting time searching.
• Returns: whatever is not delivered usually comes back, feeding reverse logistics and another cost cycle.

How it is measured and improved

The king of delivery metrics is OTIF (on time, in full), but the last mile is managed with finer metrics: first-attempt delivery rate, stops per hour, cost per delivery and the proof of delivery that closes the loop. Improvement almost always comes from two combined fronts: planning routes better with route optimization and providing real-time visibility both to the logistics team and to the end customer. When buyers know the ETA and receive a proactive notification, anxiety drops, calls to the call center drop and first-attempt deliveries go up.

A concrete example in Argentina

Think of a consumer goods distributor that supplies neighborhood convenience stores in Greater Buenos Aires. The truck leaves the Avellaneda warehouse with 60 deliveries. Without planning, the route is ordered "as the orders came in" and the driver crosses the suburbs from end to end several times; some stores close at noon and miss their delivery. With the last mile well managed, the 60 stops are grouped by zone and time window, the customer gets the notice "your order arrives between 10 a.m. and 12 p.m.," and the office sees on a dashboard what was delivered, what was not and why. The typical result the industry is after: fewer redeliveries, higher OTIF and a cost per delivery that becomes predictable.

Common mistakes

• Treating the last mile as an unavoidable fixed cost instead of measuring and optimizing it stop by stop.
• Not capturing proof of delivery, which later leads to "it never arrived" disputes that are impossible to resolve.
• Ignoring communication with the customer: a lack of information generates more complaints than the delay itself.
• Not connecting data from the street to the central system, leaving the office in the dark until the end of the day.

Last mile vs. line-haul (long-haul) transport

It is important not to confuse the two ends of the chain. They follow opposite logics:

Understanding that difference is what lets you invest where it really moves the needle: the bottleneck is almost never in the long leg, but in those last miles that reach the door.