Summary:
- Last mile delivery could experience slower recovery times and more interruptions going forward in 2025 due to changes in U.S. tariff and immigration policy.
- Average delivery time in December 2024 was 4.8 days, a 6% improvement from the November 2023 peak of 5.1 days. While December saw an expected increase in fulfillment and transit times, overall delivery times for peak season 2024 are projected to remain lower than previous years.
- On-time performance declined to the upper-70% range by January 2025, roughly 6% lower than the previous year. Despite this decrease, actual delivery times remained faster due to more aggressive estimated arrival times.
- Shippers continued their 2023 trend of network diversification, increasing their carrier usage by 10% between October 2024 and January 2025.
Last mile peak season
The last-mile peak season runs from November through January, driven by holiday shopping, returns, and major retail events like Black Friday and Cyber Monday. During this period, shipment volumes reach their annual high as consumers purchase gifts and seasonal decor. These surges can create bottlenecks, making it crucial for businesses to monitor and prepare for potential delays to ensure timely deliveries.
Key differences from past years
While key metrics typically normalize after peak season, several emerging factors may prevent this traditional recovery in the current year. These factors could keep last-mile delivery times—including transit and fulfillment—and on-time performance rates elevated throughout the year:
- United States immigration policy: Recent mass deportation efforts across the United States could significantly affect the logistics workforce. With many warehouse workers and truck drivers being immigrants, intensified enforcement may create labor shortages throughout the supply chain. This could slow warehousing operations and order fulfillment while increasing operational costs. Companies may struggle to maintain sufficient capacity, particularly during high-demand periods.
- U.S. trade policy: Recent modifications to U.S. trade policy have eliminated the minimum value exemption for tariff-free shipments from China and Hong Kong. This means all shipments, regardless of value, now face tariffs—increasing costs for businesses dependent on frequent, low-value imports. The situation is further complicated by DHL and Hongkong Post’s suspension of U.S.-bound parcel services. These combined factors may result in extended shipping delays, higher operational costs, and more complex international supply chain management.
Delivery times and on-time performance
Delivery times measure the average duration from order placement to doorstep delivery. The chart below highlights monthly average delivery times for parcel shipments.
As online shopping has grown and customer expectations have risen, delivery times have steadily decreased. Amazon’s standardization of 2-day shipping reshaped the market, pushing companies to optimize processes and enhance satisfaction. Average delivery times continued their downward trend through the peak season. December saw the highest average at 4.8 days—nearly 6% lower than the previous year’s peak of 5.1 days in November. The recovery was swift, with delivery times decreasing 15% between December and January.
Delivery time consists of two main components:
• Fulfillment time: The period from order placement to shipment readiness, including picking, packing, and upstream transit
• Transit time: The journey from warehouse to customer
While both fulfillment and transit times remained stable throughout 2024, both components saw an expected increase in December.
Fast delivery times are crucial for customer acquisition, as extended delivery estimates may drive consumers to shop in-person or with competing e-commerce retailers. However, customer satisfaction and retention depend heavily on on-time performance—the accuracy of the initial ETA provided at order placement. Building and maintaining a healthy e-commerce customer base therefore requires excellence in both delivery speed and predictability.
The chart below shows on-time performance trends in recent years.
On-time performance declined to the upper-70% range by January 2025, roughly 6% lower than the previous year. While this peak season’s overall performance was weaker than last year, delivery times were faster overall, indicating more aggressive ETAs.
Carrier diversification
To mitigate shipping risks and increase capacity, shippers increasingly use multiple carriers. The chart below illustrates the average number of carriers used per account.
Overall, there has been an industry trend of increasing carrier diversification since Covid-19, where last mile and parcel volumes surged. This trend is fueled by the growing availability of smaller carriers like OnTrac, Deliver-it, and Veho, alongside established players such as UPS, FedEx, DHL, and USPS. For peak season this year, retailers added an average of 10% more carriers to their network to handle holiday volume.
Common complaints
When customers are dissatisfied with a last mile delivery, they typically escalate with the retailer or carrier. Below is a breakdown of the most frequently-received complaints during 2024 peak season.
For the first year, complaints about “Delivered but Missing” packages outnumbered those about delayed shipments. This is a complex issue, as missing packages are often the result of theft rather than carrier or retailer error. Carriers can mitigate theft risks by placing packages in less visible areas or near cameras. Meanwhile, shippers can encourage customers to provide delivery notes—such as gate or door codes or the requirement of a signature—and utilize visibility platforms like project44 to enhance delivery tracking and customer notifications, reducing unattended delivery times for more secure deliveries.
Summary
The last-mile peak season continues to offer both challenges and opportunities for businesses as they navigate increased demand and shifting market dynamics. Although delivery times have improved compared to previous years, factors such as labor shortages and changes in trade policy—including the removal of minimum value exemptions for tariffs and service suspensions by DHL and Hongkong Post—could create additional hurdles in the new year. Carrier diversification has become a critical strategy for mitigating risks and maintaining capacity, with businesses increasingly relying on a mix of large and small carriers to meet growing demand. Despite these complexities, the overall trend toward faster delivery times and an improved customer experience remains strong, even though on-time performance has declined somewhat. To stay competitive, businesses must adapt to these changes by prioritizing both speed and reliability while effectively managing rising costs and logistical challenges.
