Last Mile Delivery Market Is Growing

Feb 3, 2021
Keego Delivery Bike With Rear Box

It is an interesting time to be involved with the delivery market. If someone a few years ago had said that the world had all the delivery companies it ever needed, it would have made sense. The giants like FedEx, DHL, UPS and the post offices of the world, were dominating the streets and the top of the brand ladder. Not to mention how Amazon was spreading their smiley packages across many nations. And it is not that those companies have gone away or seen a big knock to their business, but these days the delivery market and especially the so called LAST MILE delivery market looks very different.

Marketwatch reports that in 2019, the global Last Mile Delivery for E-commerce market was worth USD 3.6 Billion and by 2026, is expected to reach USD 7 Billion. When we see huge container ships plying the shipping lanes we might think that most of the cost of getting a product from raw material to factory to warehouse and finally into the hand of the consumer would be spent on these huge ships and trains, but other studies has shown that the last mile delivery account for 53% of the supply chain costs in 2016.

Restaurant food delivery companies like Foodpanda, Deliveroo and UberEats seemingly exploded onto the market over the last few years. Same with grocery deliveries where for example UK-based Weezy has raised 20 million and promises grocery deliveries in 15 minutes or less. During the CORONA pandemic, millions of people who had never thought about ordering their food online has found it to be a good, reliable and safe way to get both their necessary nutrition and delicious relief from the drudgery of social isolation.

So how to start up a new last mile courier delivery business in such a way it does not kill humanity with exhausts, gridlocks our cities and still enables profits? Call us partial, but we think the answer in many cases is ebikes. In thousands of cities around the world, bike messengers have for decades raced the boulevards to quickly deliver important documents and smaller items. But it takes a physical fit person to do that job for any longer period of time and a couple of bags of groceries or a load of e-commerce purchases takes up more space and weighs much more. With recent improvements to electric engines and batteries, ebikes are now light and nimble vehicles that can quickly and easily transport 80 to 200 Kg loads up to 100-120 kilometers (that’s two turns around the whole island of Manhattan!).

Delivery vans (especially electric ones) of course have an important part to play in the supply chain, but their size means they can’t easily drive and park close to the consumer receiving the packages. Many cities have traffic laws and ordinances that regulate not just where they can drive but also WHEN. A double-parked van takes up a lot of space, irritating other drivers and dragging down the brand image. This often results in annoying fines and tickets that also add to the cost of deliveries.

Then there are tax costs. Vans, lorries and motorcycles (even electric ones) have to be registered and taxed while a electric bike that can go up to 25 Km/h is counted as a bicycle and therefore does not need a license, registration, taxes or car insurance (other insurance costs a company should have is a different story).

For quick turnaround items like groceries or restaurant orders, it is not efficient to put a few bags of groceries or a rack of ribs in the back of a huge van. By using the lightest vehicle possible, a courier business can save significant money on fuel costs.

An electric vehicle is only as clean as the power grid that supplies the electrons, but thankfully most of the world is rapidly adding green and renewable power sources.

At Keego we specialize in offering purpose-built delivery and cargo ebikes that are IoT-connected and the apps and software that allows our customers to quickly scale up and manage their courier companies.



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