What is Last Mile Distribution and How Can I Invest In It?
Last-mile delivery is the movement of products from a warehouse to their ultimate destination, usually a personal residence or a retail store. Last-mile delivery aims to deliver products to customers as quickly as possible while keeping expenses low for the business.
As the last leg of the logistics journey, the last mile is often the most expensive. It comes with increasing demands from consumers for transparency and pressures to be carried out as quickly as possible for faster churn. The speed and efficiency of last-mile distributors rely on various factors, including the size of its operations, the number of orders it processes each day, the distance of the delivery points from the warehouse, and the number of routes.
Investing in Last-Mile Distribution
Last-mile delivery has piqued the interest of people who recognize the opportunities in this area, particularly now that eCommerce and logistics are high-performing sectors. Even the government has identified the potential of growth and supports research and development for innovative technologies that can automate and optimize logistics processes. According to a study by Allied Market Research, the global autonomous last-mile delivery market is projected to reach $84.72 billion by 2030 — with North America predicted to be the highest revenue contributor with an estimated $39.94 billion. The following are some ways to invest in last-mile delivery:
Invest in last-mile delivery companies.
The spike in demand for last-mile delivery solutions has resulted in startups jumping in to seize their share of the market. Investors can take their pick, choosing from local to global players. You can also get involved with crowdfunding or seed investments and become an angel investor.
Purchase a last-mile distribution warehouse
An excellent way invest in last-mile distribution, while still having the ability to pivot as technologies change, would be by purchasing last-mile distribution warehouses in inner-city, or in-fill areas. Make sure that the property has the key elements that a last-mile operator is looing for: Access to railways, ports and/or freeways; Roll Up, and Truck High loading doors/bays. Easy access to the building/yard and areas close to high demand delivery areas.
Buy shares of last-mile distribution companies or REITs that invest in Industrial spaces
Look for logistics companies that are expanding their last-mile delivery services to better compete. If you’re confident about playing the stock market, buy logistics stocks. Do your research and invest in logistics companies poised to gain traction and put you in the best position.
Invest in last-mile technologies.
Research and development for autonomous AI vehicles and drones are also on the rise. While these innovations haven’t been reserved for the logistics sector, their applications may someday help optimize last-mile distribution centers. Another surprising innovation in last-mile delivery lies in the vehicle delivering the products. For example, a truck that finishes a pizza’s cooking time while enroute to the delivery location.
For more information, you may reach us at Joe@joekillinger.co
