Dive Brief:
- The last mile — or the distance between a fulfillment center or retail shop to the final point of sale — is getting shorter in the U.S., according to a recent analysis by real estate firm CBRE.
- The report surveyed the 15 largest metro areas in the U.S., finding the "last mile" could range from 6 to 9 miles, depending on a city's fulfillment infrastructure and geography.
- Urban zones with shorter last miles, such as Los Angeles / Orange County, suggest the zone can count on more fulfillment centers. JOC.com reports the analysis matches a growing trend of retailers investing in distribution centers in order to decrease fulfillment timelines.
Dive Insight:
Retailers and logistics providers are investing heavily in ways to decrease fulfillment timelines. This may include automating warehouses, pilot testing drone deliveries, using stores as distribution centers or building new distribution centers. Altogether, the rise of e-commerce has sparked a logistics boom.
The table below, compiled from an interactive map from CBRE's analysis, shows that the length of the last mile ranges widely across cities. In fact, even those areas known for their growing logistics infrastructure, such as the Inland Empire, have further last-mile lengths to travel. The reason is geography: some metropolitan areas are wider or more difficult to travel to than others.
Last mile distances in select cities
| City | Average Last Mile | Retail Sales |
|---|---|---|
| New York | 6.8 miles | $260 billion |
| Chicago | 8.3 miles | $170 billion |
| San Francisco Bay Area | 6.0 miles | $151 billion |
| Dallas - Fort Worth | 6.9 miles | $140 billion |
| Miami - Fort Lauterdale | 7.4 miles | $128 billion |
| Inland Empire | 9.0 miles | $69 billion |
While indicative of real estate development, the length of the last mile may not be the best indicator for the state of logistics infrastructure in a city. A better indicator may be delivery time: Retailers tend to build fulfillment centers outside of major metropolitan areas to avoid the traffic woes and regulations and gain access to a wider variety of areas. That is why the Lehigh Valley in Pennsylvania is such a popular choice, as it grants access to both Philadelphia and New York within hours. The same could be said for the Inland Empire in California.
JOC.com reports the last-mile, while likely to continue getting shorter nationwide as delivery locations increase, is unlikely to fall far below the current low of 6 miles. As consumers move to expecting instant delivery, however, retailers will need to devise new last-mile delivery strategies with the assets they have already invested in. Perfecting the last mile will take both time and increased stakeholder participation.
