Revolutionizing Last Mile Delivery Market: AI-Powered Revolution to Drive Market Growth to US$ 303.6 Billion by 2031

As per the latest market research by Business Market Insights (BMI), the research report “Last Mile Delivery Market Size and Forecast (2021–2031)” forecasts how the market is set to surge 80% by 2031 as Technology Reshapes Global Delivery Ecosystems. The report spotlights AI’s pivotal role in revolutionizing the global last-mile logistics landscape.

/EIN News/ -- US & Canada, April 30, 2025 (GLOBE NEWSWIRE) -- The report forecasts the market to expand from US$ 168.74 billion in 2024 to US$ 303.59 billion by 2031, registering a robust CAGR of 8.8% over the 2025–2031 period.

Technology is emerging as the primary engine of growth, as AI-powered process improvements—such as intelligent routing algorithms, autonomous vehicles, and advanced demand forecasting—are set to revolutionize delivery networks, dramatically cut costs, and raise consumer expectations for speed and convenience. This shift marks a fundamental change in the way goods travel from warehouses to doorsteps across the globe.

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Overview of report findings

      1.   Market Growth

The Last Mile Delivery Market is projected to grow from US$ 168.74 billion in 2024 to US$ 303.59 billion by 2031, registering a compound annual growth rate (CAGR) of 8.8% between 2025 and 2031.

The rapid expansion of online shopping, increasing customer expectations, and growing urbanization and population are key factors propelling market growth. Additionally, the adoption of advanced technologies in consumer delivery is transforming the logistics landscape.

      2.   Technological Advancements

Innovations in last-mile delivery are reshaping urban logistics by offering solutions that enhance efficiency and support decarbonisation to keep pace with changing consumer expectations. Emerging technologies like cargo bikes, electric vehicles, drones, and delivery robots are being adopted to reduce traffic congestion and lower environmental impact. As e-commerce, food delivery, and direct-to-consumer (D2C) services expand rapidly, conventional delivery systems face rising costs and the risk of bottlenecks. Modern last-mile strategies address these challenges by optimizing delivery routes, decentralizing infrastructure, and incorporating alternative transportation methods.

      3.   Sustainability Initiatives

Last-mile delivery, accounting for approximately 30% of supply chain emissions, is revolutionizing toward eco-friendly solutions to reduce environmental impact. Companies are adopting electric vehicles (EVs), optimizing routes via AI to cut fuel use, and deploying micro-fulfilment hubs in urban centres to shorten delivery distances.
Warehouses using Renewable energy, reusable packaging, and crowdsourced delivery models further minimize carbon footprints. Growing consumer demand for green logistics is accelerating the need for partnerships with sustainability-focused carriers and carbon-neutral logistics options. These strategies not only lower emissions by up to 40% but also significantly reduce operational costs and enhance brand loyalty, positioning sustainable last-mile logistics as a competitive necessity.

      4.   Geographic Insights

North America remains a leading last mile delivery market, driven by flourishing e-commerce, rising consumer demand for rapid fulfilment, and ongoing technological innovation. The US and Canada are fuelling growth with industry leaders—Amazon, FedEx, UPS—alongside startups deploying autonomous drones and electric vehicles. While innovations like smart route determination and EVs enhance speed and sustainability, maintaining cost-effective scalability remains essential amidst rising pressure for faster delivery services.

Meanwhile, Europe’s mature logistics infrastructure and a booming online retail sector have spurred zero-emission vehicles, smart lockers, and compact urban micro-hubs in the UK, Germany, France, and the Netherlands. E-commerce expansion and eco-friendly methods will sustain regional growth.

Last Mile Delivery Market Segmentation

• Based on Type, the market is segmented into B2B and B2C. The B2C segmented dominated the market in 2024.
• Based on Vehicle Type, the market is segmented into Motorcycle, Commercial Vehicle, Drones, Autonomous Ground Vehicle. The Commercial Vehicle segment dominated the market in 2024.
• Based on End User, the market is segmented into Groceries, Home Essential/Houseware and Home Furnishing, Restaurant Meals, Clothing and Apparel, Consumer Electronics, Toys/Hobbies/Sporting Goods, Mass Merchants, Jewellery, Specialty, Automotive Parts and Accessories. The Mass Merchants segmented dominated the market in 2024.
  
  

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Competitive Strategy & Development

• Key Players: The Last Mile Delivery Market is populated by several key players, each contributing to its growth and innovation. Some prominent players are:
  1. UNITED PARCEL SERVICES, INC.
  2. FedEx Corp
  3. DSV
  4. DHL
  5. XPO, INC
  6. AMAZON.COM, INC
     
     
• Trending Topics: Green Logistics, Sustainable Delivery Operations, Sustainable Logistics, autonomous Vehicles, e-logistics, AI-Driven Logistics,
  
  

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Global Headlines

• FedEx deploys additional EVs for last-mile delivery in India - As part of its efforts to boost sustainable logistics in India, FedEx has deployed an additional 13 Tata Ace electric vehicles in Mumbai for last-mile delivery services. The additional vehicles bring FedEx’s total number of EVs in operation across Indian cities to 59 and align with the company’s goal to achieve carbon-neutral operations globally by 2040.”
  
  
• J&T Express: Revolutionising Last-Mile Delivery - J&T Express, a leading logistics company with significant operations across Southeast Asia and China, has positioned itself at the forefront of innovation in this crucial segment.” J&T has developed market-specific solutions leveraging advanced technologies such as AI deployment and automation, promoting biodegradable and recyclable packaging etc.
  
  

Conclusion

Last-mile delivery, the ultimate step in the logistics chain, represents more than 45% of total delivery cost and remains a critical worrying point due to rising consumer expectations for speed, transparency, and sustainability. The major challenges facing are urban congestion, high operational costs, and the environmental impact of delivery fleets.

The industry players across the value chain are swiftly embracing these technological changes which is actively reshaping the last-mile landscape. By prioritizing technology, sustainability, and customer agility, the companies are setting a blueprint for the future of logistics. As competitors follow suit, the industry will likely see accelerated digitalization, greener practices, and heightened focus on emerging markets, benefiting consumers through faster, cheaper, and more sustainable delivery ecosystems.

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