A surprisingly resilient consumer that has become more and more comfortable buying any and all things online, particularly big and bulky items like appliances, electronics, and home furnishings, is fueling a growth engine that’s keeping last-mile delivery providers in the money.
And while uncertainty and concern around the economy, tariff impact, wage growth, jobs, and the affordability of everyday purchases is tempering many an outlook, thanks to sustained e-commerce business volumes, “the big and bulky business still remains strong,” notes Jeff Wolpov, senior vice president of e-commerce and Ryder Last Mile.
“The consuming customer is more experienced, savvy, and better-informed today,” he adds. “They are using lots of [online] tools for comparison shopping,” all of which enable faster, more informed purchase decisions.
Particularly with bigger-ticket “white goods” purchases, like furniture, electronics, fitness equipment, and appliances (which also likely need installation in the home), it’s not uncommon for a consumer to research products online and then visit a brick-and-mortar store to see and touch the product as the final step in the purchase decision.
At that point, the last-mile provider enters the picture, and that kicks off one of the most critical, and costly, steps in the overall transaction—a step that also factors heavily into the customer’s ultimate satisfaction with that purchase.
“We are the last handshake that customer experiences [in its transaction] with the retailer. So we need to provide more information [and assurance] on that experience than ever before, because the consumer is much more discerning and better educated, and has much higher expectations,” observes Wolpov.
“Delivering on the brand promise is more important than ever; what we do plays a critical role in protecting that brand and the consumer’s impression of it.”
Ryder Last Mile utilizes third-party carriers to deploy a fleet of 1,200 trucks and delivery teams dispatched from 135 warehouses around the U.S. and makes some 3 million deliveries a year.
A COSTLY ENDEAVOR
By one industry estimate, fulfillment and delivery of last-mile, over-the-threshold goods, also known as “white glove” service, is among the costliest in trucking. A World Economic Forum report estimated that last-mile fulfillment accounts for 53% of shipping costs and 41% of total supply chain costs. “Cost is paramount today in the eyes of the consumer and the retail seller,” Wolpov emphasized.
And while Amazon has trained consumers to expect free shipping and immediate delivery of just about any purchase, “nothing is ever free,” Wolpov points out. Depending on the price paid for the item, and if that price exceeds a certain dollar threshold, the delivery service may technically be “free.” Or it may be charged at a discount on the actual cost of the service, the remainder of which is then borne by the seller.
It is a very competitive market, where the consumer typically weighs three components to a delivery: speed, service, and cost. “It used to be, ‘You can pick two, but you can’t have all three,’” Wolpov recalls.
Not anymore. “Today, the customer expects all three. It’s more important than ever that we apply technology to [optimize operations, provide real-time visibility, and gather customer feedback] in order to exceed those expectations and continue to get better,” which Wolpov says his company does through its RyderView app. “That’s how we learn where and how to improve.”
Eddie Sorg, chief commercial officer for ArcBest, which provides final-mile services including inside delivery, stair carry, and light assembly, distills the final-mile “ask” down to three primary value levers: “Consumers and retailers want reliability, transparency, and flexibility, and we’re investing in exactly that,” he notes.
He adds that while some consumers have pulled back on big-ticket purchases, “we see that as temporary. What matters most is being ready when demand returns” and providing a technology-backed service that ensures fewer missed deliveries, less hassle, and more convenience.
“At the end of the day, we want to provide a best-in-class experience that earns trust, so when customers have a challenge, we’re their first call,” Sorg says.
PAIN POINTS
Photo courtesy of Ryder
Chris Kina’s 30-year journey in transportation, logistics, and supply chain operations has included management roles at companies like Procter & Gamble, Gillette, Braun, and KB Toys. Now a senior director-analyst, logistics and fulfillment for research firm Gartner, he notes that the biggest pain point for big and bulky last-mile providers “is around failed or missed deliveries, or goods delivered damaged.” Redeliveries, he adds, “are really where the hidden costs are, and they are always underestimated.”
A Gartner last-mile trends and strategies study found that when asked what the most important aspects of last-mile operations were, respondents (retailer sellers) cited their top three as speed (90%), reliability (85%), and flexibility (58%).
The study also revealed that retailers and e-commerce sellers were getting much more prescriptive about measuring carrier performance, focusing on six key indicators: on-time delivery, average delivery cost per package/item, accessorial cost per item, loss rates, damage-free delivery, and delivery status updates. That, and continually gathering customer-satisfaction feedback and sharing it with sellers.
Moving forward, Kina says retailers and their carriers are looking to leverage improved final-mile planning and execution technology to better optimize routes, truck capacity, miles, stops, and driver/team time on site. They’re also looking for more consolidation opportunities. “From our conversations with retailers, we’ve learned they want to get more consolidated deliveries going to the same customer or the same locality,” says Kina. One example: mixing on the same truck an install delivery with a door-drop delivery in the same neighborhood.
Returns also is a high-cost area that’s getting more attention. One example of how retailers are addressing this in a new way is a case where a washing machine is delivered and the customer discovers a dent. “The retailer gives the delivery provider the on-the-spot capability to offer that customer a discount so the consumer will accept the appliance as is, and it doesn’t have to be returned and a new one delivered,” he explains.
“Then you can avoid the whole process of returning, repacking, restocking, and reselling the item, likely at a discount,” he adds. “That is still the biggest challenge and the biggest cost bucket in this particular segment of final mile.”
A $16 BILLION MARKET
Satish Jindel, principal at research and data analytics firm ShipMatrix, estimates the total addressable market for big and bulky last-mile deliveries at $16 billion. Some $4 billion of that is retailers and e-commerce sellers who do the last mile themselves, with the remainder handled by independent outsourced operators, like RXO, Ryder Last Mile, and J.B. Hunt Last Mile.
He agrees that e-commerce sales remain the biggest driver of last-mile business, but he also says that consumers who walk into stores and buy on site remain a viable contributor. Jindel notes as well that the way some retailers connect an in-store purchase with last-mile delivery services is changing—providing more convenience and simplicity for the customer.
He cites as an example Bob’s Discount Furniture, which has some 70 retail outlets across the country. “When a consumer completes a purchase [at Bob’s], they get a QR code, which when scanned, returns a price quote for the delivery. The vendor providing the quote already has all the details on the purchase and the buyer,” he explains.
“The consumer can then accept the quote on the spot and schedule the delivery and install right there—while they’re still in the store.” The delivery service and the smartphone app used to schedule it are separate from the retailer and are provided by the shipping company My Home Delivery.
“It’s not an online sale; it’s still a person walking into the store and buying there,” Jindel says. “But the delivery is handled without the retailer being involved. The customer selects and arranges the desired service [on their smartphone] and pays for that separately. So [organizing] the last-mile delivery is no longer a drag on the retailer or something it has to manage.”
One result of this model, at least for this retailer, is that order sizes have increased, notes Jindel. “Consumers find out how easy it is to use and often will add more items to the same delivery—which doesn’t cost them any extra,” he says.
FROM REACTIVE EXECUTION TO PROACTIVE INTELLIGENCE
Gabe Ortiz-Alizieri, head of Maersk Ground Freight North America, sees the industry continuing to develop and adapt more sophisticated and powerful technology tools that are enabling a shift from what he calls reactive execution to proactive intelligence.
“AI [artificial intelligence] and data-driven insights now enable us to anticipate disruptions, whether related to weather, traffic, or capacity, and act before they impact customers,” he notes. “That evolution is critical, because structural challenges remain in the cost and complexity [of the business], especially in the last mile, which can account for more than half of shipping costs,” he says.
Yet even amid economic uncertainty, tariff challenges, and evolving regulations, “consumer spending continues across categories such as bulky goods, retail, lifestyle, and technology. Demand is strong, though lower than in previous years,” he’s observed. Maersk got into the U.S. big and bulky last-mile market in May 2022 with its acquisition of the former Pilot Freight Services, which was subsequently rebranded as Maersk Ground Freight. It has more than 65 operating locations covering all U.S. markets and completes more than 5.5 million home deliveries annually across North America.
SIZE AND SCALE
Photo courtesy of J.B. Hunt
RXO has a long history in the final-mile market and is one of its largest players. It operates a network of 82 RXO-owned and -operated hubs with over 10,000 contracted carriers and independent service technicians, providing coverage into 159 metro markets. RXO says it makes 10 million last-mile deliveries and some 500,000 installs annually.
Fernando Rabel, RXO’s vice president of last-mile account management, says the two top asks he’s hearing from last-mile customers are reducing transit time, and specific to traditional retailers, expanding the products they offer on e-commerce sites.
“Retailers are also looking to compete more aggressively with the pure e-commerce sellers,” in an effort to increase their share of wallet, he notes. One key data point Rabel says customers focus on is number of days out. He defines that as “how long is it from when the sale is completed to when the delivery is made. That seems to be top of mind.”
RXO’s third-quarter 2025 volumes were up 12%, but since then, the market has appeared to weaken, Rabel has observed. Yet he sees a market with a solid foundation and good prospects for continued growth as consumers continue their love affair with e-commerce.
Based on his discussions with customers, he says retailers’ reasons for using RXO come down to three principal attributes: size, scale, and financial stability; a reliable service that is cost-competitive; and trust in RXO to deliver a customer experience that protects and enhances the seller’s brand. “We constantly ask ourselves how we can be faster, better, more cost-effective,” he says.
Rabel also cites as a strength RXO’s carrier base and the long-standing relationships—some going back more than 20 years—that it has with its contract carriers. “As our footprint has grown, they have grown their business,” he notes. He adds that RXO has feedback tools and processes that provide “voice of the customer” input, which helps RXO’s carrier partners identify areas for improvement and share best practices. “That allows for muscle memory around what it takes to provide a superior customer experience, how they need to operate, and how to develop and refine those skill sets that will make their teams successful.”
WAITING FOR THE NEXT HOUSING BOOM
Although a number of industries and economic trends affect final-mile delivery growth and prosperity, none is more important than housing starts, says Jason Seidl, managing director, industrials, airfreight, and surface transportation at investment banker and analyst firm TD Cowen. “The big and bulky market will be driven by the housing market first, and second, by e-commerce deliveries of white goods to existing homes.”
Technology plays a significant role in effectively managing and executing the most expensive fulfillment and delivery challenge in trucking. Yet in the case of the small to mid-sized last-mile delivery operator, “we are still searching for that perfect [technology] solution that is affordable,” says Ruth Correa, chief executive officer at Cheetah Final Mile in Kansas and Tempo Transport in Florida. She is also a member of the board at the Customized Logistics and Delivery Association, a 3,500-member organization that provides advocacy, education, and networking opportunities for professionals in the time-critical logistics, final-mile, and express aircargo sectors.
Today, Correa says Cheetah uses a mix of planning, optimization, and visibility software to run its business, manage costs, and communicate and engage with shippers and consumers. She’d like to see a more integrated solution. “There is still an opportunity for someone to create that perfect software platform for last-mile white glove delivery operations,” she says.
But at the end of the day, all the technology in the world, artificial intelligence in particular, “can’t deliver the goods,” says Seidl. “You still need a truck and a driver.”
And while emerging and developing technologies have great promise for streamlining back-office functions, customer service, and other manual activities, especially in the big and bulky market, somebody still needs to physically pick up the goods and load them on the truck, safely deliver them to the customer, bring it into the house, and set it up.
