January 03, 2017

UPS is the largest delivery company on the planet, flying more than 500 jets in a mission to serve a customer base that topped 8 million last year.

Operating at a similar scale is the U.S. Postal Service, which delivered 154 billion pieces of mail in 2015 using 215,000 vehicles. At that scale, the postal service is one of the largest civilian fleets in the world.

Despite the enormity of their infrastructures and logistical smarts, UPS and the Postal Service haven’t been able to overcome one long-standing obstacle: the last mile from distribution center to doorstep. 

While virtually every other segment of the supply chain has been streamlined, the delivery of merchandise from regional warehouses to a customer’s front door continues to be a source of great inefficiency. 

By some estimates, the last mile accounts for as much as 28 percent of the total cost of package delivery. The reasons are many and varied. Perhaps the most common is that many people simply aren’t home when deliveries are attempted, typically between 9 a.m. and 7 p.m. on weekdays. But there’s more to it than that.  

“Last-mile delivery suffers from a number of complexities that are different from other parts of the supply chain,” explained Matthias Winkenbach, director of MIT’s Megacity Logistics Lab. “One issue is they’re extremely vulnerable toward dynamically occurring disruptions, like traffic accidents or just traffic jams or weather influences.” 

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