First Mile Logistics Delivery Software Market - By Component (Software, Service), Application (Route Planning and Optimization, Inventory Management, Order Management, Shipment Tracking), Deployment Type, Organization Size, End-User Industry & Forecast, 2024 - 2032

First Mile Logistics Delivery Software Market Size

First Mile Logistics Delivery Software Market size was valued at USD 3.8 billion in 2023 and is estimated to register a CAGR of over 7.6% between 2024 and 2032, propelled by factors such as the surge in e-commerce, the need to optimize urban deliveries, and increasing labor costs and shortages. In addition, the booming e-commerce sector has created a demand for efficient first-mile solutions. As online shopping becomes more entrenched, businesses require advanced software to manage pick-up, sorting, and consolidation processes in warehouses and distribution centers.
 

With growing urban populations and rising traffic congestion, first-mile software is becoming essential for optimizing delivery routes, reducing fuel consumption, and ensuring timely deliveries in dense city areas, thus driving market growth. For instance, in February 2024, Shipsy launched its logistics solutions on AWS Marketplace. These solutions address critical logistics needs such as transportation management, route optimization and planning, fuel consumption optimization, first-mile pickup, multi-courier management, and on-demand delivery management.
 

Moreover, modern first-mile software seamlessly integrates with last-mile delivery platforms and enables real-time data sharing. This ensures delivery drivers receive precise information on pick-up locations, package details, and optimized routes for final delivery to customers. Labor shortages in the logistics industry are prompting companies to automate tasks and streamline workflows. First-mile software assists in managing staff scheduling, workload distribution, and real-time delivery tracking, thereby enhancing overall efficiency.
 

For instance, in June 2024, E2open introduced an appointment scheduling API within its transportation management solution. This innovation aims to improve efficiency and collaboration among supply chain partners by reducing manual work, decreasing lead times, and centralizing scheduling data for shipments and dock scheduling.
 

The first-mile logistics delivery software market faces several challenges, including integration with legacy systems, data accuracy, and real-time visibility. Integrating first-mile software with existing warehouse management (WMS) and enterprise resource planning (ERP) systems can be complex and time-consuming. Compatibility issues often arise due to different software versions and data formats, adding to the challenges.
 

Maintaining accurate and real-time data across the supply chain has become essential, as any discrepancies or delays can result in inefficiencies, miscommunication, and delivery delays. Ensuring real-time visibility across the entire logistics network, from suppliers to distribution centers, continues to be a significant challenge. As a result, these factors restrict the adoption of first-mile logistics delivery solutions and hampers the market growth.
 

First Mile Logistics Delivery Software Market Trends

There is an increasing trend towards collaborative platforms that link shippers, carriers, and warehouse operators in the first-mile logistics sector. Artificial intelligence and machine learning are being integrated into first-mile logistics software to improve decision-making, optimize routes, and predict potential disruptions. In addition, real-time tracking capabilities are included as a standard feature in this software, as businesses seek greater visibility into their supply chains to monitor shipments, predict arrival times, and manage inventory more efficiently.

Cloud-based logistics software solutions are becoming increasingly popular, owing to their scalability, flexibility, and cost-effectiveness. Further, there is a growing focus on sustainability in logistics, with first mile logistics software being developed to support green initiatives, such as optimized delivery routes to lower fuel consumption and emissions. Furthermore, the adoption of Internet of Things (IoT) devices and automation in first mile logistics has been growing in recent years. IoT devices offer real-time data on the condition and location of goods, while automation streamlines tasks like sorting, packing, and loading. This combination improves operational efficiency and minimizes manual errors.
 

First Mile Logistics Delivery Software Market Analysis

Based on deployment type, the market is divided into cloud-based and on-premises. In 2023, the cloud-based segment accounted for a market share of over 68%. The growth of the segment is driven by factors such as scalability, flexibility, cost efficiency, accessibility and real-time data access, and integration capabilities. Cloud-based solutions offer greater scalability and flexibility compared to on-premises systems, allowing businesses to quickly adapt to changing demands and scale their operations without significant infrastructure investments.
 

Moreover, with cloud-based systems, companies can reduce costs related to IT infrastructure, maintenance, and upgrades. They can also easily integrate with other systems such as ERP, WMS, and TMS, streamlining operations, thus ensuring seamless data flow across different stages of logistics which drives the growth of cloud-based solutions in the first mile logistics delivery software market. Further, cloud solutions provide real-time access to data and advanced analytics capabilities, enabling better decision-making, improved visibility across the supply chain, and enhanced operational efficiency. For instance, in March 2024, Oracle adds new generative ai capabilities to oracle fusion cloud applications suite. This will help companies in their decision making through their real-time data access and analysis using AI.
 

Based on organization size, the first mile logistics delivery software market is categorized into large enterprises, and small and medium enterprises (SME). The large enterprises segment is expected to hold over USD 4.9 billion by 2032. The growth is driven by factors such as complex logistics needs, cost optimization and efficiency, regulatory compliance, sustainability, real-time tracking, and visibility within an organization. Large enterprises often face stringent regulatory requirements and sustainability goals. First-mile logistics software helps ensure compliance with various regulations and supports sustainable practices by optimizing routes and reducing carbon emissions?.
 

Moreover, large enterprises typically manage extensive and complex supply chains. They require sophisticated software solutions to handle the high volume of goods, diverse product ranges, and multiple distribution channels. This complexity drives the demand for advanced logistics software that can streamline operations and improve efficiency. By implementing first-mile logistics software, large enterprises can optimize routes, manage inventory more effectively, and reduce transportation costs. This efficiency leads to significant cost savings, which is crucial for large-scale operations.
 

Advanced first-mile logistics software offers real-time tracking and visibility, which is essential for large enterprises to monitor their supply chain operations continuously. This capability drives the demand for logistics solutions in the large enterprise market.
 

North America dominated the first mile logistics delivery software market with around 36% of the revenue share in 2023. The exponential rise in e-commerce activities has created a surge in demand for efficient first-mile logistics solutions in the region. North American companies are increasingly prioritizing supply chain efficiency to meet customer expectations for faster delivery times and reduced costs. Various businesses in the region are generally receptive to adopting new technologies.
 

The growing adoption of cloud-based first-mile software solutions facilitates scalability and real-time data access, driving market growth. Moreover, companies are engaging in strategic partnerships and acquisitions to expand their market reach and capabilities in the region. For instance, in February 2024, Blue Yonder acquires Flexis, a leader in manufacturing and supply chain planning technology. The acquisition of Flexis will strengthen Blue Yonder’s end-to-end positioning in the market and is a valuable addition to its ecosystem of supply chain management tools.
 

European companies are at the forefront of developing innovative first-mile logistics software solutions. Examples include cloud-based platforms with advanced functionalities such as AI-powered route optimization, real-time data analytics, and features tailored for urban deliveries in densely populated European cities which is driving the growth of the market in the region.
 

Asia-Pacific is home to the world's fastest-growing e-commerce market, with countries such as China and India leading in the industry. This rapid growth necessitates efficient first-mile solutions to manage the high volume of online orders across vast geographical distances. Rapid urbanization across Asia-Pacific region is creating megacities with complex logistics challenges. First-mile software can optimize delivery routes within congested urban areas and leverage new infrastructure developments for efficient first-mile operations in the region.
 

First Mile Logistics Delivery Software Market Share

Oracle Corporation, SAP SE, and Trimble Transportation held significant market share of over 14% in 2023. Oracle Corporation prioritizes integrating its logistics management solution with its ERP and SCM systems. They also leverage AI for predictive analytics in demand forecasting, route optimization, and inventory management.
 

SAP SE incorporates advanced IoT, blockchain, and AI tools from SAP Leonardo into their first mile logistics solutions. They emphasize seamless integration with their ERP and SCM systems, enabling end-to-end visibility and real-time data sharing via SAP’s cloud platforms.
 

Trimble Transportation focuses on telematics and IoT to enhance visibility and control in first mile logistics. They complement this with robust customer support, training programs, and flexible deployment options, ensuring their solutions meet diverse business needs.
 

First Mile Logistics Delivery Software Market Companies

Major players operating in the first mile logistics delivery software industry are:

• Oracle Corporation
• SAP SE
• Trimble Transportation
• E2open
• Epicor Software Corporation
• Blue Yonder
• Descartes Systems Group
• Kinaxis
• ShipBob
• Shipsy
   

First Mile Logistics Delivery Software Industry News

• In June 2024, Epicor announced a collaboration with Climatiq to help supply chain businesses address sustainability goals. Through this, Epicor aimed to introduce carbon calculations into its ERP platforms, enabling customers to access accurate, real-time carbon calculations, track emissions, and identify key opportunities to reduce their carbon footprint.
   
• In January 2024, Tive and FreightPOP announced a strategic partnership to revolutionize supply chain management. This collaboration merges FreightPOP's comprehensive platform with Tive's advanced sensor technology, providing enhanced shipping visibility and controls.
   

The first mile logistics delivery software market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2021 to 2032, for the following segments:

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Market, By Component

• Software
• Service

Market, By Application

• Route planning and optimization
• Inventory management
• Order management
• Shipment tracking
• Others

Market, By Deployment Type

• Cloud-based
• On-premises

Market, By Organization Size

• Large enterprises
• Small and medium enterprises (SME)

Market, By End-user Industry

• Retail and e-commerce
• Manufacturing
• Healthcare
• Automotive
• Food and beverage
• Energy and utilities
• Aerospace and defense
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA