DC Velocity - September 2017

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.