DEFINITION of 'Last Mile'

Last mile is used to describe the short geographical segment of delivery of communication and media services, or delivery of products to customers located in dense areas. Last mile logistics tend to be complex and costly to providers of goods and services who deliver to these areas.

BREAKING DOWN 'Last Mile'

Delivery of telecommunications and media content is instantaneous and very fast for physical products to the perimeter of a densely-populated area. Imagine a trunk line leading to the edge of a city or metropolitan area. The branches and leaves must then spread out across the tightly-packed buildings and streets to serve customers working and living there. The edge of the city to the customer inside the city is the last mile. Communications and media providers — inclusive of broadband cable, satellite and wireless — spend heavily to upgrade old delivery systems and build out new networks to ensure adequate bandwidth for consumers hungry for data and streaming videos on their TVs, desktops and mobile devices. It takes time for these service providers to implement technology solutions for the "last mile problem," and due to the rapidly changing nature of technology, these solutions are at risk of being obsolete, or not state-of-the-art, upon completion.

Last mile logistics for product delivery have become a central focus for retailers in the e-commerce era. Our instant-gratification society demands fast delivery of products ordered online. Retailers that can achieve this at low or no cost to the customer have competitive advantages. Amazon utilizes third-party services to deliver packages to its customers over the last mile, and is also in the process of building its own fleet to cover burgeoning demand. To compete, other retailers are investing more in setting up distribution centers as close as possible to metropolitan zones, and then contracting with UPS, USPS, FedEx and local courier services to perform last mile delivery services.

RELATED TERMS
  1. Delivery Point

    The delivery point is the place specified in futures contracts ...
  2. Delivery Notice

    A delivery notice is part of a futures contract that defines ...
  3. Delivery Versus Payment (DVP)

    Delivery versus payment is a securities industry settlement procedure ...
  4. Customer Service

    Customer service is the process of ensuring customer satisfaction ...
  5. Spot Delivery Month

    The spot delivery month, also known as nearby month or front ...
  6. Customer

    A customer is an individual or business that purchases the goods ...
Related Articles
  1. Personal Finance

    Is Your Loyalty Paying Off?

    Not always. But here is the way to make the best of an increasingly shrinking rewards universe.
  2. Personal Finance

    How To Travel During Holidays With Frequent-Flier Miles

    Frequent flier miles can be a great boon for your budget. Learn how many you need to travel over the holidays.
  3. Investing

    New App Makes Amazon the Uber of Shipping (AMZN, UPS)

    Amazon's new shipping app strengthens its position as a logistics and delivery powerhouse.
  4. Personal Finance

    How Amazon's Restaurant Delivery Service Makes Money (AMZN)

    Amazon's delivery service acts as a loss leader to corner the market now before providing high margin revenue in the future.
  5. Personal Finance

    Google Express vs. Amazon Prime Now (GOOG, AMZN)

    Google and Amazon are battling for workers and customer dollars as the retail delivery wars heat up.
  6. Investing

    Walmart to Expand Online Grocery Delivery to 100 Metros

    Walmart doubles down on its online delivery investments, following similar moves from Amazon-owned Whole Foods, Kroger and Target.
  7. Investing

    Amazon Tests Delivery Service—Targets FedEx, UPS

    Amazon aims at reducing its reliance on UPS and FedEx and overcrowding in its warehouses.
  8. Investing

    Target: Can Same-Day Delivery Compete With Amazon?

    Traditional retailers have to vie with Amazon Prime's two-day delivery and its new SWA platform.
  9. Insights

    Uber's Self-Driving Cars Need Intervention Every 0.8 Miles

    Tech publication Recode spilled statistics related to the ride-sharing company's tests on its self-driving fleet.
  10. Investing

    Amazon Can Now Deliver to Unattended Homes

    Amazon launched a new Prime service in which it will deliver packages inside unattended homes.
RELATED FAQS
  1. What is the average profit margin for a company in the telecommunications sector?

    Get an overview of the telecommunications sector, and learn the average net profit margins for companies in this highly competitive ... Read Answer >>
  2. What are the Four Types of Economic Utility?

    Understand the four main types of economic utility that apply to transactions between consumers and businesses: form, time, ... Read Answer >>
  3. What are the main problems with a JIT (just in time) production strategy?

    Learn about the just in time (JIT) production strategy and how the precise coordination and timing it requires can end up ... Read Answer >>
  4. How do Internet companies profit if they give away their services for free?

    Learn how companies in the Internet sector make a profit when service, content and user applications are offered at no cost ... Read Answer >>
  5. What is the difference between an investment and a retail bank?

    Learn the primary differences between retail banks and investment banks by examining the business activities, type of clients ... Read Answer >>
Trading Center