The growth of online shopping and food deliveries, combined with moves to improve air quality in cities and businesses seeking to cut costs, has sparked a huge growth in the last-mile delivery market.
How big is harder to quantify. Straits Research valued the global last-mile delivery market at £33.6 billion in 2021, predicting it would grow to £102.6bn by 2030. But Precedence Research valued it as £149.3bn, with a predicted 2030 valuation of £352.1bn.
Those wildly different estimates reflect different definitions of what constitutes last-mile delivery. While manufacturers have enjoyed success with electric variants of traditional vans (think the Ford E-Transit or Citroën ë-Dispatch), there’s increasing emphasis on the wider delivery ecosystem. Electrification presents huge opportunity to reduce last-mile delivery costs, which some estimates suggest account for up to 28% of the total shipment cost.
It’s a shift to multi-modal solutions that presents both challenge and opportunity to the commercial vehicle (CV) divisions of traditional manufacturers – who are racing to develop bespoke vehicles and solutions to meet that growing demand. Kia, for example, has plans for a full range of Purpose Built Vehicles (PBVs), with the aim to sell millions by 2030.
In a race against time as various regions introduce stricter regulatory measures, manufacturers face competition from new rivals, including both ambitious EV start-ups such as Arrival or Canoo and some of the key last-mile delivery firms themselves.
In the US and Europe, arguably the most significant player in the last-mile delivery space is internet retail giant Amazon. Having long relied on third-party carriers such as the Royal Mail, Fedex and UPS, it has built up its own formidable delivery operation in the subscription-based Amazon Prime.
According to reports based on internal Amazon documents in The New York Times, the firm had around 175,000 vans on the road by the end of last year, the vast majority diesel-engined and sourced from automotive firms.
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