The transportation of goods from the point of origin to the point of consumption involves several stages. The three primary stages are known as the first-mile, middle-mile, and last-mile logistics services.
First-mile delivery refers to the initial stage of shipping where the goods leave the supplier warehouse or production facility. The term first-mile can have different meanings depending on the industry. For retailers, first-mile delivery involves the transport of goods from the supplier warehouse to the retailer's store. For e-commerce, the first mile is the journey of the goods from the retailer to the delivery courier who delivers to the customer's home, workplace, or another pick-up point.
We tend to hear more about last mile delivery than first mile except when boats get stuck in the Suez Canal or during COVID when cargo ships lined up down the coasts of major port cities for weeks waiting to unload. Both major first mile problems that are the reason people have to wait a year to get that barbeque they ordered or that new car.
Before the pandemic the word "supply chain" was not something people discussed with grandma over Zoom but one global pandemic later and now everyone now drops it in convos.
If you are a company who buys or manufactures their product from oversees then first mile delivery is closely tied to weather, fuel, people (think dock workers, unions) and in the recent pandemic COVID (China governmen shutting down port cities). When there are first mile delivery issues there is not much you can do unless you are Home Depot and "buy" your own cargo ships!
Middle-mile delivery involves the transfer of goods from a distribution centre to a fulfillment facility or 3PL. Shipbob is a great company example of the middle mile. In some cases, there may be several middle-mile delivery stages after the first mile. Shipbob will go and pick up your items from the port, bring them to their fulfillment centre, store your goods and pick and pack for the last mile when a customer orders. Middle mile is where the most inroads have been made with robotics and automation. Amazon is a great example of someone who has done this - see below.
Despite the huge increase in online shopping, e-commerce businesses and other retailers still rely on brick-and-mortar sorting facilities for getting goods processed and delivered to the right customers. The rise of micro-fulfilment centres in urban areas is another way the middle mile has changed in the past 5 years. GoPuff, a US based online retailer, is competing with Amazon, DoorDash Marts to deliver items in under 30 minutes. GoPuff - a strong contender for best in class middle and last mile fulfillment.
Last-mile delivery is the final stage of the shipping process where the product reaches the customer's doorstep after going through the first and middle mile stages. This is the most critical stage as it is the customer-facing stage of the whole shipping process. It is also the most expensive stage when you take into account labor costs, logistics software, and surcharges for failed deliveries.
The main players in Canada are Canada Post, FedEx, UPS and DHL. In the last five year there are several other last mile providers in Canada that have emerged such as GoForIt, Shippie, Flashbox. They are offering 3 hour, same day or next day shipping services in urban areas. On the other hand, Amazon has vertically integrated last mile and there are now thousands of Amazon vans making deliveries. With the help of Rivian, Amazon has pledged that by 2040 it will move its entire fleet of over 100,000 vehicles to electric!
In the next five years we will see last mile get more robotized with drones and robots like Geoffry - see below.
Hopefully this provides a good overview of first, middle and last mile delivery and how they are different and part of the supply chain.