10 Last-mile Delivery Challenges and How to Overcome Them

61% of delivery businesses believe that the last mile is the most inefficient part of their supply chain.

Consumers are attracted to eCommerce to shop for everyday needs. The logistics industry is flourishing, and the increase in demand has given birth to last-mile delivery. It is a crucial part of supply chain management, as it refers to the transportation process from a warehouse to customers’ addresses.

The growing demand needs fast, efficient, and cost-effective delivery of products and goods to consumers. Having said this, there might be chances that logistics companies face a number of challenges. 

Herein, we will discuss in detail the growing concern of last-mile delivery and consider the major last-mile delivery challenges with easy ways to solve them. 

Let’s start with why last-mile delivery is a concern.

What is the Last Mile Problem?

The “last mile problem” refers to the challenge of completing the final leg of a delivery, getting an order from a local hub to the customer’s doorstep quickly and affordably. This step sounds simple, but it’s actually the costliest and most complex stage in the entire delivery chain.

Customers today expect same-day, low-cost, or even free delivery, yet the last mile requires the most labor, fuel, route planning, and coordination. As a result, even small delays, route detours, or failed delivery attempts increase operational costs dramatically.

This tension between rising consumer expectations and high delivery expenses is exactly what makes the last mile so difficult for businesses to optimize.

Let’s now find out the challenges faced by delivery management in offering last-mile logistics. 

What are the Challenges in Last-mile Delivery?

1. Traffic congestion 

Urban regions are particularly susceptible to severe traffic congestion because of the high vehicle density and poor road infrastructure. Delivery times are extended, fuel consumption rises, and operational expenses rise as a result of the delivery trucks’ slower delivery speeds. Furthermore, traveling through heavy traffic might result in missed delivery deadlines, irate clients, and a general decline in delivery effectiveness.

To address this issue, businesses can spend money on cutting-edge systems for route optimization that use real-time traffic information to determine the most effective routes. These technologies assist drivers in avoiding traffic jams and cutting down on idle time by integrating historic traffic patterns and real-time updates. 

Additionally, using alternate delivery techniques for short-distance deliveries, such as bicycles, electric scooters, or even pedestrian couriers, might avoid traffic jams and enable faster, more agile deliveries.

2. High costs

The last-mile delivery segment is expensive for both the business and the customers. With the sudden increase in demand, businesses find it costly to integrate the infrastructure to handle the demand for cost-effective and timely deliveries.

The lack of quality last-mile delivery software makes it even more difficult to streamline the complexities of the last-mile delivery process. Adding fuel to the fire, businesses need to allocate money for sophisticated routes, extra stops, failed deliveries, driver’s salaries, and robust fleet management.

If, unfortunately, a package is delayed or fails because of friction in the last-mile delivery logistics or the entire supply chain, the delivery cost doubles and can result in severe losses.

Talking about the rise in delivery cost, half of the customers abandon their carts and don’t proceed further in the shopping process because of the extra shipping cost.

The inefficiencies in last-mile delivery can result in a higher cart abandonment rate, and it becomes difficult for businesses to sustain their delivery business.

3. Limited access to remote areas

Logistical challenges arise when delivery to isolated or rural areas is inadequate and poor. Deliveries may be delayed or possibly fail if some places are inaccessible.

To address this issue, businesses should set up regional distribution hubs that are carefully positioned closer to rural areas. Businesses can streamline processes and accelerate delivery times by cutting the last-mile delivery distance. Customers in remote locations can easily access their orders by working with local shops or community centers to act as delivery or pickup hubs.

4. Last-mile delivery costs

As already mentioned, supply chain networks are under tremendous pressure as a result of the rising needs of continuously shifting client demands. Additionally, when customers are ready to pay more for these expedited shipping alternatives, maintaining such a rigid distribution network still presents a significant logistical challenge.

Additionally, the transport must bear the costs in situations when they cannot be passed along to the final customer, such as failed or delayed deliveries, rejected deliveries, etc.

5. Seasonal demand fluctuations

Peaks in demand around holidays and special events can put a strain on delivery resources, causing deliveries to be delayed and personnel to be overworked.

Businesses can employ seasonal or temporary employees to handle increasing order volumes to manage seasonal swings. Surge pricing during peak hours encourages to implementation of last-mile delivery trends, such as selecting delivery windows that aid in more equally distributing demand. Customers’ expectations are managed, and discontentment levels are reduced through open communication about potential delays during times of high demand.

6. Real-time visibility

Depending on the drivers’ calls from pit stops or the daily activity logs that were kept. Inefficiencies such as communication breakdowns and the inability to handle emergencies quickly. This leads to the failure to maintain the consistency of route optimization. Such inefficiencies might rapidly turn into significant issues given the intense competition today.

Customers of today also expect to know where their packages are in the delivery process, particularly during the last mile. They want to know everything, including where their driver is, how much longer it will take, and the precise ETA.

While it is one thing when everything goes as planned, these kinds of “real-time demands” put a tremendous amount of pressure on the supply chain network and cause a whole new level of complexity.

7. Delayed deliveries

One of the major difficulties that shipping and delivery businesses face is the delay in deliveries. Businesses incur costs when they are unable to meet deadlines. Delays in delivery damage a brand’s reputation, boost customer attrition, and hurt your business’s bottom line. 

Therefore, you require a same-day delivery strategy that enables you to make deliveries on schedule. The answer is to develop a system for route planning and to guarantee openness and seamless communication at all levels.

8. Outdated technologies 

You would be surprised to learn how many logistics companies still rely on antiquated technologies. Even when companies modernize, last-mile delivery is frequently disregarded for some reason. The upgrades typically concentrate on warehouse optimization.

However, last-mile delivery can benefit greatly from minimal modifications. There is absolutely no justification when you take into account the advancements in shipping and transportation and the variety of contemporary choices at your disposal. You may even track and optimize delivery in real time by equipping your drivers with GPS devices and tracking software.

9. Reduced efficiency

The struggle to maintain customer satisfaction fuels last-mile delivery’s growing efficiency. High productivity is essential for increasing fulfillment potential. Inefficient processes lead to increased delivery delays and irate consumers, especially when managing high order numbers.

Use last-mile delivery software to automate the procedure from the warehouse to the customer’s door to solve this issue. Even in the event of last-minute alterations to the plan, it enables the rerouting of your workers.

10. Inefficient route planning

As we’ve already mentioned, when it comes to last-mile delivery, large vehicles are not used to transport items between distribution centers. Instead, it’s a lot of single products traveling to lots of discrete locations, frequently dispersed around a metropolis.

As a result, planning the delivery route becomes a crucial step in the overall last-mile logistics process. Delivery times and mileage can increase significantly due to inefficient routing. However, driver dispatching software like Upper greatly simplifies the automation of the route design process.

10 Benefits of Using a Last-Mile Delivery Solution

1. Faster deliveries and tighter time windows

A last-mile solution helps teams schedule stops more intelligently so drivers can meet same-day and narrow delivery windows. It gives dispatchers the flexibility to adjust drop-off times, reroute shipments, or handle last-minute cancellations without slowing the entire day.

2. Better cost control and higher delivery margins

By analyzing delivery patterns, fuel usage, and driver productivity, a last-mile system highlights inefficiencies you may not notice manually. With optimized miles and fewer repeat attempts, businesses see lower operational expenses and improved profit margins over time.

3. Clear visibility across every stage of delivery

Modern last-mile tools provide live updates on driver location, stop completion, delays, and exceptions. This shared visibility keeps dispatchers, managers, and customers aligned—without relying on endless phone calls or manual check-ins.

4. Stronger customer experience and higher trust

Customers can track their delivery status in real time and receive alerts about delays or updated ETAs. Being transparent about the delivery journey reduces uncertainty and strengthens the customer’s confidence in your service.

5. Automated and smarter route planning

Instead of mapping routes manually, a last-mile solution generates optimized sequences automatically. It considers traffic, distance, priority stops, delivery windows, and road conditions to help drivers cover more stops with fewer miles.

6. Lower environmental impact

Efficient routing reduces idle time, unnecessary detours, and empty miles. Pairing optimized deliveries with EV or bike fleets can significantly cut emissions and support sustainability goals.

7. Boosted driver efficiency and fewer failed attempts

With accurate locations, clear instructions, and optimized stop order, drivers spend less time searching for addresses or repeating attempts. This improves overall route completion speed and reduces operational strain.

8. Simplified returns and reverse delivery flows

A last-mile platform can blend returns and pickups directly into existing delivery routes. Customers get an easier return experience, and businesses reduce the costs associated with repeat truck runs.

9. Easy scalability during High-volume seasons

Whether it’s holidays or seasonal demand spikes, last-mile software allows businesses to scale quickly by coordinating temporary drivers, consolidating workloads, and distributing routes more efficiently.

10. Better oversight when working with 3PL partners

For teams using external carriers, a last-mile dashboard ensures consistent tracking, delivery quality, and SLA adherence. Businesses gain stronger control and can monitor performance without micromanaging every trip.

Upper: Your End-to-End Solution for Last-Mile Delivery Optimization

Upper offers comprehensive last-mile delivery route optimization to tackle the multifaceted challenges of quick delivery. By harnessing the route optimization algorithms, Upper empowers your business to navigate through traffic congestion, ensuring timely deliveries. 

Removing duplicate addresses or wrong addresses will secure delivery options. Driver tracking and ETAs sent to the customers enhance communication, granting customers visibility. Upper’s route optimization software also contributes to seasonal changes to streamline operations. As a cost-effective solution, it helps make it an indispensable asset to last-mile delivery.

Conclusion

The last-mile delivery problem is an enduring aspect of Internet retail, and solutions are always changing. Utilizing all forms of technology, particularly route planning software like Upper, is currently the best course of action for small and medium-sized businesses. 

Businesses may increase their bottom line and customer happiness simultaneously by being educated about the most recent trends and tackling difficulties head-on. A route planning and optimization software helps you bypass the roadblocks and hiccups because of manual pen-and-paper route planning, and helps you integrate automation in your delivery process. Get your 7 days FREE trial today!