The Australia Last-Mile Delivery Market: Growth, Trends, and Future Outlook (2024-2034)

The Australia last-mile delivery market, valued at AUD 1.74 billion in 2024, has become one of the fastest-growing sectors within the country’s logistics and transportation industry. This surge in market value is primarily driven by increasing consumer demand for quicker, more efficient, and timely deliveries. In an era where convenience and speed are paramount, businesses are focused on providing customers with the best possible delivery experience.

The market is expected to continue this robust growth trajectory, projected to grow at a compound annual growth rate (CAGR) of 16.10% from 2025 to 2034, potentially reaching AUD 7.74 billion by 2034. As demand for faster and more reliable delivery services rises, the last-mile delivery sector is not only improving supply chain operations but also creating new job opportunities within logistics and transportation industries, thereby boosting local economies and supporting workforce development.

In this article, we will delve into the factors driving the growth of the Australia last-mile delivery market, the trends that are reshaping it, and its long-term outlook.

1. Understanding Last-Mile Delivery in Australia

Last-mile delivery refers to the final leg of the supply chain, where goods are transported from distribution centers or fulfillment hubs to the end customer’s doorstep. It is one of the most critical and often costly segments of the delivery process, making it a significant focus for businesses striving to enhance customer satisfaction.

• Market Value in 2024: AUD 1.74 billion
• Projected Market Value by 2034: AUD 7.74 billion
• CAGR (2025-2034): 16.10%

The growing demand for e-commerce, along with the rise of on-demand delivery services, has spurred the rapid expansion of this market, with both retailers and logistics companies working to develop more effective last-mile strategies.

2. Key Drivers of Growth in the Australia Last-Mile Delivery Market

2.1 Boom in E-commerce and Online Shopping

The ongoing surge in e-commerce and online shopping is one of the main factors propelling the growth of the last-mile delivery market in Australia. With consumers increasingly shifting to online platforms for their shopping needs, there is a heightened need for fast and efficient delivery services to meet consumer expectations for speed, reliability, and convenience.

• E-commerce boom: The growing number of online shoppers has made faster deliveries a priority for retailers looking to stay competitive in a saturated market.
• Consumer expectations: Customers now expect same-day or next-day delivery for their online orders, forcing companies to focus on improving their last-mile delivery solutions.

2.2 Technological Advancements in Logistics

The integration of technology into the logistics sector is helping optimize last-mile delivery operations. Innovations such as route optimization algorithms, real-time tracking, and delivery management platforms enable logistics companies to improve efficiency, reduce delivery costs, and provide customers with better service.

• Artificial Intelligence (AI): AI-driven tools are used for efficient route planning, enabling faster and more cost-effective deliveries.
• Automation: The use of automation technologies such as drones and self-driving vehicles is expected to become more common in last-mile delivery operations, further enhancing speed and reducing costs.
• Data analytics: The use of big data and analytics helps in predicting demand patterns, improving inventory management, and optimizing delivery schedules.

2.3 Increased Focus on Customer Experience

As customer experience becomes a major competitive differentiator, businesses are focusing on providing a more seamless and convenient delivery experience. The demand for flexible delivery options such as same-day delivery, time-slot delivery, and click-and-collect services has made last-mile delivery a critical part of ensuring customer satisfaction.

• Flexible delivery options: Offering consumers the ability to choose their preferred delivery time, location, or method is becoming a vital aspect of modern delivery services.
• Customer-centric services: Last-mile delivery companies are investing in customer-friendly solutions such as package tracking, notifications, and smooth returns processes to enhance the overall experience.

2.4 Rise of Subscription and Delivery Models

The popularity of subscription services and recurring delivery models is driving the growth of last-mile delivery services. Companies offering subscription-based services are increasingly relying on last-mile logistics to ensure timely and efficient deliveries of regularly purchased products.

• Subscription services: Businesses in sectors like food delivery, grocery shopping, and beauty products are using last-mile solutions to fulfill recurring deliveries to customers.
• On-demand services: Platforms like Uber Eats and DoorDash have transformed the last-mile delivery space by offering on-demand deliveries for food and other goods, creating a new wave of delivery models.

2.5 Sustainability and Green Delivery Solutions

Sustainability is becoming an important consideration for last-mile delivery companies. There is a growing focus on eco-friendly delivery methods, such as using electric vehicles (EVs), bicycles, and drones to reduce the environmental impact of deliveries. Consumers are becoming more conscious of the carbon footprint of their purchases, leading companies to prioritize green delivery solutions.

• Electric vehicles: The adoption of EVs for last-mile deliveries helps reduce carbon emissions and pollution.
• Green packaging: Companies are increasingly using sustainable packaging materials to minimize waste and improve their environmental credentials.

3. Trends Shaping the Future of Last-Mile Delivery

3.1 Hyperlocal Delivery Networks

The rise of hyperlocal delivery networks, where goods are delivered from local hubs or stores to nearby customers, is becoming increasingly popular. These networks enable businesses to reduce delivery times and improve operational efficiency. Hyperlocal networks also benefit from shorter distances and localized resources, helping to minimize transportation costs and emissions.

• Local delivery hubs: Businesses are setting up smaller warehouses or fulfillment centers in urban areas to expedite deliveries.
• Faster service: Hyperlocal networks allow businesses to provide customers with faster delivery options, including same-day delivery and express delivery.

3.2 Use of Drones and Autonomous Vehicles

The use of drones and autonomous vehicles for last-mile deliveries is gaining traction in Australia. These technologies offer a potential solution for reducing delivery costs, increasing speed, and overcoming traffic congestion in densely populated urban areas.

• Drones: Drones can make quick deliveries of small parcels to customers, especially in remote areas or hard-to-reach locations.
• Self-driving vehicles: Autonomous vehicles are expected to revolutionize last-mile logistics, reducing labor costs and increasing the scalability of delivery operations.

3.3 Smart Lockers and Pickup Points

As part of the convenience-driven trend, businesses are increasingly offering smart lockers and pickup points as alternatives to home delivery. Customers can pick up their packages at designated locations, allowing for greater flexibility and reducing the strain on last-mile delivery infrastructure.

• Smart lockers: These lockers provide a secure and convenient way for customers to receive their parcels at a time and location that suits them.
• Pickup points: Partnering with local businesses or convenience stores to create networked pickup points allows customers to retrieve their packages more easily.

4. Challenges in the Australia Last-Mile Delivery Market

Despite its rapid growth, the Australia last-mile delivery market faces several challenges:

• High operational costs: Last-mile delivery is the most expensive part of the supply chain, and businesses need to find ways to reduce costs while maintaining service levels.
• Traffic congestion: Urban traffic congestion poses a significant challenge to efficient deliveries, leading to delays and increased costs.
• Infrastructure limitations: In some areas, especially rural or remote locations, the lack of infrastructure can hinder timely and reliable last-mile deliveries.