The 3PL market is absolutely booming right now, and last mile delivery capabilities can help individual 3PLs capture a disproportionate share of the opportunity.
In 2022, the global 3PL market was valued at $1.1 trillion. By 2031, that number is expected to grow to a staggering $2.3 trillion. This is where the importance of last mile delivery capabilities enters in. As the 3PL market grows significantly, more and more service providers will flood into the space, hoping to grab a portion of that market. 3PLs are already operating in a competitive space, but the level of competition will only heat up in the coming years.
Last mile delivery can be your differentiator and revenue generator.
Continue reading to learn more about the role last mile delivery capabilities can play in your business, and get in touch with us at FRAYT to learn more about securing a partner to help you offer last mile delivery services.
Last Mile Delivery Capabilities Meet a Growing Need
The 3PL market is rapidly growing right now, but the last mile delivery market is keeping pace. The global last mile delivery market was estimated at $79.9 billion in 2023, and it’s expected to grow by more than 8.1% through 2030. The growth in last mile delivery is powered by growth in e-commerce. In 2017, e-commerce revenue was a mere $2.45 trillion. That figure will reach $6.95 trillion by 2024.
The challenge with last mile delivery is this: It’s a complex task that requires specialized knowledge, a wealth of experience, and the infrastructure needed for success. If a 3PL can offer effective last mile delivery capabilities, it creates turnkey fulfillment and delivery services for its customers while making a service of incredibly high value available. The value in last mile delivery services comes from the impact they make on customer satisfaction/experience and repeat purchases.
Exploring Your Last Mile Options
As a 3PL, where do you start when building out your last mile delivery capabilities? First, it’s important to know your options. Here’s a look at the three ways you can choose to add last mile delivery capabilities to your business.
Self-Manage Last Mile Delivery
The biggest shippers in the world are able to design and implement their own last mile delivery programs. Self-management of last mile delivery services is both time- and money-intensive, which is why only the largest shippers (like Amazon) are able to do it. Self-managed last mile delivery service requires:
- Hiring drivers.
- Investing in a diverse collection of vehicles for your fleet.
- Establishing a presence in important markets.
- Implementing modern last mile technology.
- Handling all emergency and urgent delivery needs in-house.
Needless to say, few shippers or 3PLs choose to self-manage because running a last mile delivery service is complex.
Collaborate With a Third-Party Last Mile Partner
Many more 3PLs choose to work with a third-party last mile partner. These partners have drivers and fleets that are ready to provide capacity at a moment’s notice, which is most important during peak seasons. These partners also have existing technology ready to deploy for communication, route optimization, tracking, and other important components of last mile delivery. When you find the right partner, you’re able to scale your last mile delivery program up and down as needed, saving both time and money.
The growth of the 3PL market in the next few years will require existing 3PLs to carve out a competitive advantage. Working with a delivery partner can help you quickly scale your last mile delivery capabilities to create that competitive advantage and grow revenue alongside the industry’s growth.
Hybrid: Using Third Parties to Complement In-House Teams
There’s a third option that is particularly attractive to 3PLs: A hybrid approach that includes running a portion of your own last mile delivery program while using a partner to add capacity, handle urgent deliveries, and bring expertise as needed.
In some cases, 3PLs need last mile delivery partners to rescue and/or recover pallets that require urgent attention. In other cases, they may just need assistance during peak seasons. They may also need a third party for some markets where the 3PL does not have an existing presence. No matter the driving factor, a hybrid approach that includes a trusted third party for last mile delivery capabilities can be a momentum builder for your business in the years to come. These partnerships help you get ROI out of your last mile program.
FRAYT: The Last Mile Delivery Partner to 3PLs
At FRAYT, we work with 3PLs around the country, sometimes operating as their sole last mile delivery partner and sometimes working in a hybrid arrangement to add capacity as needed. 3PLs choose to work with FRAYT because we offer:
- Drivers who know how to provide a high level of customer service.
- A diverse fleet of vehicles for executing different types of shipments.
- A presence in key markets around the United States.
- Modern technology for managing the last mile effectively.
- Capacity that scales when you need it to.
Are you ready to seize the opportunity by adding last mile delivery capabilities? Ship with us.
