The last-mile delivery market is entering the second half of 2026 with good demand but increasing operational complexity. Transportation providers and retailers are shifting their focus from delivering packages faster to delivering them more efficiently, reliably, and profitably by investing in technology, network optimization, and using diversified delivery models that improve service while controlling expenses.
Cost pressures will remain one of the biggest challenges through year-end. General rate increases, delivery area surcharges and ongoing investments in automation continue to raise the cost of residential delivery. At the same time, consumers still expect free or low-cost shipping with accurate delivery windows and real-time tracking.
Another notable trend is the continued expansion of collaborative last-mile partnerships. Postal operators, parcel carriers, and third-party logistics providers are leveraging one another’s networks to improve delivery coverage while reducing costs. For example, DHL eCommerce and the USPS inked a $10 billion deal for the USPS to perform last-mile parcel delivery services in the U.S. on behalf of DHL eCommerce; FedEx’s partnership with Amazon for FedEx to provide some big and bulky last mile delivery services for Amazon; and UPS and USPS agreeing for the USPS to perform some last mile services on behalf of UPS.
Meanwhile, FedEx and UPS will continue to focus on business-to-business (B2B) delivery services. In recent earnings quarters, both carriers have noted the growth in B2B volumes and are focusing on such industries as healthcare & life sciences, automotive and data centers.
What does this mean for you?
It’s time for some out-of-the-box thinking and build your last-mile strategy utilizing technology and partnerships with select carriers. The days of using just FedEx and UPS are long gone.
Know Your Surcharges and Rates
Effective July 6, UPS will increase its Extended Area Surcharge, Pickup Area Surcharge, Remote Area Surcharge and Residential Surcharge.
Why am I telling you this?
I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies, like yours, reduce supply chain costs, implement BI tools, improve in-stocks and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies like yours in how to mitigate costs and improve efficiencies. I am here to help you better understand the market. So twice a month, I’ll share relevant small parcel and supply chain news.
Let’s talk! An initial consultation with me will cost you nothing. Click here to schedule a call.
Look for the next Jay’s Parcel Notes, a twice a month LinkedIn newsletter for additional news and thoughts.
Jay Kent