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.

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