The last mile — the final stretch from local hub to customer door — is the most expensive part of delivery. It now accounts for roughly 53% of total shipping costs, up from 41% in 2018 (Statista), and 85% of retail executives say cutting cost-per-order is their number-one priority. For any business promising fast delivery, the last mile is where margins are won or lost. Here are five proven ways to bring those costs down without hurting service.
1. Store inventory closer to customers
Distance drives cost. Local warehousing positions stock near demand, shrinking the last mile before it even begins and unlocking same-day options that distant fulfilment centres cannot match economically.
2. Batch and route intelligently
Consolidating deliveries by zone and optimizing routes reduces kilometres driven and time per stop — the two biggest cost levers in last-mile. A courier with deep local knowledge does this instinctively, routing around congestion that adds hours (and fuel) to a naive route.
3. Set realistic delivery windows
Failed deliveries are the silent killer of last-mile economics: every re-attempt roughly doubles the cost of that order. Tighter, clearly communicated windows — backed by real-time tracking so customers are home — dramatically cut re-delivery waste.
4. Consolidate your vendors
Using one partner for courier, freight, and fulfilment unlocks volume pricing and removes the overhead of managing multiple carriers and reconciling multiple invoices. A single 3PL relationship often costs less than three separate vendors doing the same work.
5. Use real-time tracking
Visibility is not just a customer-experience feature — it is a cost lever. Live tracking reduces “where is my order” support calls, lets dispatch fix problems before they become refunds, and improves first-attempt success. Customers who can see their delivery coming are far less likely to miss it.
The compounding effect
None of these tactics is dramatic on its own, but they compound. Shorter routes plus higher first-attempt rates plus consolidated volume pricing can move last-mile cost-per-order by double digits — which, given that the last mile is the majority of shipping spend, flows straight to your bottom line.
Frequently asked questions
Why is the last mile so expensive?
It involves the most stops, the most labour, and the lowest drop density of any leg — plus the cost of failed deliveries and re-attempts. Labour alone is about half of last-mile cost.
What is the fastest way to cut last-mile costs?
Improving first-attempt delivery success and storing inventory closer to customers usually deliver the quickest wins.
Does same-day delivery cost more?
Not necessarily — when inventory is local and routes are dense, same-day can be delivered economically, and most shoppers are willing to pay a small premium for it.
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Want to lower your delivery costs without slowing down? Contact Intact Courier & Logistics for a free quote and we will help you design a faster, leaner last mile.