Last-Mile Delivery Options: Beyond the Big Three Carriers

When it comes to shipping, FedEx, UPS, and USPS are household names. For many ecommerce businesses, these carriers are the go-to options for getting packages to customers. But the most challenging and expensive part of the shipping process is the last mile — the journey from a local facility to the customer's doorstep. This last leg can account for 41-53% of total shipping costs. While the big three carriers handle large volumes efficiently, they might not always be the most cost-effective or fastest choice for every delivery scenario.

A variety of alternative delivery providers exist that many ecommerce sellers are unaware of. These alternatives include regional carriers, crowdsourced platforms, and innovative delivery models such as lockers and pickup points.

The Last-Mile Cost Problem

Understanding why the last mile is so expensive is crucial. This segment of the delivery process is characterized by several costly challenges:

Low Delivery Density: A single driver with a truck might make 80-150 stops, often spread out over a large area. This low density means more time and fuel are spent per package.

Failed Deliveries: With about 6-8% of deliveries failing on the first attempt — often because recipients aren't home — costs increase due to re-delivery attempts.

Complex Delivery Environments: Navigating apartments, gated communities, and rural addresses can complicate deliveries.

Return Trips: If a delivery fails, the driver must return for redelivery, adding to the costs.

Time Window Demands: Customers often request deliveries within specific hours, requiring more precise scheduling and potentially more routes.

While large carriers spread these costs across huge volumes, smaller players might offer more efficient or economical solutions for specific routes or package types.

Regional Carriers

Regional carriers specialize in certain geographic areas and can often provide quicker, more cost-effective delivery within their zones.

Major Regional Carriers in the US

• OnTrac: Operating on the West Coast and parts of the Southwest, OnTrac offers residential ground delivery, potentially saving businesses 15-30% compared to national carriers.
• LSO (Lone Star Overnight): Focused on Texas and neighboring states, LSO provides reliable next-day delivery, often with savings of 20-35%.
• Spee-Dee Delivery: Serving the Upper Midwest, Spee-Dee specializes in ground residential deliveries, offering savings of 15-25%.
• GLS US: While expanding nationwide, GLS is known for its efficient ground delivery services in California, Nevada, and Arizona, with savings of 10-20%.
• Better Trucks: This carrier provides same or next-day delivery in the Southeast and Mid-Atlantic with savings of 10-25%.
• Courier Express: Operating in Upstate New York, this carrier focuses on local ground delivery, providing savings of 15-30%.
• Eastern Connection: Specializing in time-definite ground deliveries along the Northeast corridor, this carrier offers savings of 10-20%.

When Regional Carriers Make Sense

Regional carriers shine when your shipping needs align with their strengths. If you ship to a concentrated region, these carriers can leverage lower zone costs and faster transit times. High-volume shipments to specific metropolitan areas can also benefit from volume discounts and quicker delivery. Additionally, many regional carriers specialize in residential deliveries and offer standard Saturday delivery, which can be advantageous if your customers require earlier delivery times.

When Regional Carriers Don't Make Sense

However, regional carriers may not be suitable for every scenario. If you require nationwide coverage, managing multiple regional carriers can be complex and inefficient. Some regional carriers also offer less detailed tracking and may have more cumbersome claims and insurance processes. Finally, not all regional carriers are supported by every shipping platform, which can complicate technology integration.

How to Access Regional Carriers

Unlike USPS, most regional carriers don't offer direct consumer access. You can access them through:

Multi-carrier shipping platforms — Platforms like Atoship and ShipStation integrate regional carriers for easier management.

Direct accounts — Establishing an account directly with the carrier can offer better rates and terms for volume shipping.

Consolidators — Companies like DHL eCommerce or OSM Worldwide use regional carriers for last-mile delivery, offering a streamlined process.

Crowdsourced and Gig Delivery

The gig economy has transformed package delivery, with regular people using their vehicles to deliver packages. This crowdsourced model offers flexibility and speed.

Crowdsourced Delivery Platforms

• Amazon Flex: Uses gig drivers to deliver Amazon packages, primarily in Amazon DSP areas, with same or next-day delivery.
• Roadie: Employing a peer-to-peer model, Roadie offers nationwide coverage for same-day delivery.
• Dolly: Focused on larger, heavier items, Dolly operates in major metropolitan areas with same or next-day service.
• GoShare: Offers truck and labor services in major metros, providing same-day delivery.
• Veho: A notable player, Veho uses tech-enabled gig delivery across 40+ metro areas, offering next-day service.

The Veho Model (Worth Watching)

Veho stands out for its tech-driven approach, providing photo proof of delivery, real-time tracking, and customer-selected delivery windows. Brands like Warby Parker and Glossier use Veho for efficient deliveries in covered areas. Veho's model competes with traditional carriers on cost and often surpasses them in delivery speed and customer experience.

Locker Networks and Pickup Points

An alternative to home delivery is using lockers and pickup points, which can reduce delivery costs and improve customer satisfaction.

Package Locker Networks

• Amazon Hub Lockers: With over 20,000 locations in the US, customers can pick up packages using a unique code.
• UPS Access Point: Offering 40,000+ locations, customers can retrieve packages from local businesses.
• FedEx Hold at Location: Allows package redirection to FedEx offices or partners.
• Parcel Pending and Luxer One: Provide lockers in apartments and offices, where carriers deposit packages.

Why Lockers Work

Lockers eliminate failed deliveries by ensuring first-attempt success. They prevent porch piracy by securing packages until customers retrieve them. Deliveries to lockers are more cost-effective since drivers can drop off multiple packages at once. Customers benefit from the convenience of picking up packages at their leisure, often with 24/7 access.

Ship-to-Store / BOPIS Variants

For businesses with physical locations, ship-to-store or Buy Online, Pick Up In Store (BOPIS) models eliminate the last mile entirely. These models are ideal for omnichannel retailers and those with store stock. Walmart, Target, and Best Buy have popularized these options. Even ecommerce brands are partnering with retail locations to offer in-store pickup.

Consolidators and Last-Mile Specialists

Consolidators streamline the shipping process by collecting packages from various shippers, sorting them, and handing them off to last-mile delivery networks like USPS or regional carriers.

How Consolidation Works

Ship packages to the consolidator's hub.

The consolidator sorts packages by destination.

Packages are transported to destination-area post offices or carrier hubs.

USPS or a regional carrier completes the final delivery.

Savings arise from bypassing the carrier's long-haul network. By managing the line haul through a consolidator, shippers only pay for the last mile.

Major Consolidators

• DHL eCommerce: Partners with USPS and regional carriers, ideal for lightweight packages, offering 15-30% savings.
• OSM Worldwide: Works with USPS and regional carriers for ecommerce parcels, providing 10-25% savings.
• Newgistics (Pitney Bowes): Focuses on returns and ecommerce, partnering with USPS for 15-25% savings.
• Passport: Specializes in international ecommerce with country postal services, achieving 20-40% savings.
• GlobalPost (EasyPost): Partners with USPS for international lightweight packages, offering 15-30% savings.

USPS as Last-Mile Provider

FedEx and UPS utilize USPS for last-mile delivery in some services, such as FedEx SmartPost and UPS SurePost. These services are 10-20% cheaper than standard ground shipping, though they may add 1-2 days to delivery times.

Delivery Drones and Autonomous Vehicles

While not yet mainstream, delivery drones and autonomous vehicles are gradually becoming part of the logistics landscape.

Current State (2026)

Providers like Amazon Prime Air, Wing (Alphabet), and Zipline are offering limited commercial services in select metro areas. These services are generally restricted to small, lightweight packages and are still evolving within the regulatory framework. As technology and regulations advance, drones and autonomous vehicles may become viable options for more businesses in the next few years.

Building a Multi-Carrier Last-Mile Strategy

Choosing the right carrier for each delivery isn't about sticking with one provider. A strategic approach involves using a mix of carriers to optimize costs and service levels.

Decision Matrix

• <1 lb, standard speed: USPS Ground Advantage or DHL eCommerce.
• 1-5 lbs, Zone 1-4: USPS Priority or a regional carrier.
• 1-5 lbs, Zone 5-8: UPS/FedEx Ground or a consolidator.
• >5 lbs, any zone: UPS/FedEx Ground with negotiated rates.
• Same-day/next-day metro: Crowdsourced options like Veho or Roadie.
• High-value shipments: FedEx/UPS with signature confirmation.
• Locker pickup preference: Amazon Hub or UPS Access Point.
• Rural destinations: USPS for the best coverage.

Implementation Steps

Analyze your shipping data: Determine where your packages go, their weights, and the zones.

Identify concentration: If a significant portion of orders goes to a specific region, consider a regional carrier.

Start with one alternative: Introduce one regional carrier or consolidator alongside your primary carrier.

Compare costs: Run parallel quotes for 30 days to assess potential savings.

Monitor service quality: Ensure that cost savings don't come at the expense of delivery times or package integrity.

Scale gradually: Add more alternatives as you confirm their performance meets your standards.

The carriers you choose don't have to be permanent. Continuously test, measure, and adjust your strategy. With last-mile delivery being such a significant cost factor, it's essential to remain agile and proactive in optimizing your shipping approach.