64 DC VELOCITY SEPTEMBER 2017 www.dcvelocity.com
PERHAPS IT’S A MINOR POINT, BUT IN BUSINESSES LIKE
logistics, it’s the small details that sometimes matter most.
Consider the currently in-vogue term “the last mile.” It refers, of
course, to the final leg of a product’s journey through the supply
chain—meaning delivery to the customer—rather than a literal
distance. As for why it’s getting so much attention, it’s all about
the need for speed in the new world of order fulfillment. Suppliers’
ability to meet customer demands for rapid delivery of orders
is highly dependent on that last mile of the supply chain.
Nowadays, it’s not too much to say that the last mile is where sales
are lost or won.
While this is true in many industry verticals, nowhere is the
pressure more acute than in retail—and e-commerce, in particular. The time when customers
were satisfied to have online orders delivered
in two to three days is past. The consumers of
2017 expect next-day delivery. It’s probably
not much of a stretch to say the consumers of
2018 and beyond will expect same-day service,
particularly in urban areas.
That’s where so-called “last-mile distribution
centers” come in. Sometimes called “last touch”
facilities for e-commerce are popping up in close proximity to the
population centers of major U.S. cities, creating a foundation for
rapid-delivery service that didn’t exist on this scale as recently as a
few years ago,” the report says.
As for what the researchers mean by “close proximity,” we’re
talking under 10 miles. To be precise, CBRE’s analysis of the
locations of newer last-mile distribution facilities (those opened
within the past two years) in the 15 largest U.S. population centers
showed that they are positioned, on average, between six and nine
miles from the center of the population areas they serve.
Among other findings, CBRE’s study revealed a correlation
between population concentration and the length of the “last
mile.” “Denser cities tend to have shorter average distances,
such as the six-mile average in San Francisco and the 6.3-mile
average in Philadelphia,” the researchers wrote in
their report, U.S. MarketFlash: Last-Mile: Concept
or Measurement? “Meanwhile, cities that are more
spread out have longer averages, such as 7. 5 miles
in Houston, 8. 5 miles in Phoenix, and nine miles in
Southern California’s Inland Empire.”
The report left no doubt as to what’s driving the
trend. “The close proximity of the last-mile facilities
ered to customers from much
larger facilities much farther
away, sometimes in other states.”
Also notable is the speed with
ly as possible,” said David Egan,
CBRE’s global head of industrial
and logistics research, in a press
release. “This is an entirely new
link in most supply chains that delivers on the
promise of fast, super-high-performance delivery.”
Indications are, the trend has yet to run its course.
“Development of last-mile strategies still is in the
early stages, so the average distances in many metros [are] likely to shrink a bit more in the coming
years,” Egan said in the release. If his prediction
pans out, “the last mile” may not be a figurative
expression much longer.
Group Editorial Director
BY MITCH MAC DONALD, GROUP EDITORIAL DIRECTOR outbound
It may be last, but it’s not really
a mile at all … yet