3PLs navigate uncertainty in $10.15B Big and Bulky Last-Mile Market, notes Armstrong report

A new report issued this week by Brookfield, Wis.-based supply chain consultancy and global third-party logistics (3PL) research provider Armstrong & Associates, in collaboration with the National Home Delivery Association, examines the current state of a key aspect of the last-mile delivery market, big and bulky last-mile delivery.

Entitled “Delivering through Uncertainty: Big and Bulky Last-Mile Delivery in the United States,” the report looks at various market factors, including: market size; growth; key players; customer segments; route costs; regional delivery trends; workforce data; shifts in driver models (contractor vs. employee); revenue trends by industry; and the increase in freight brokers used to secure last-mile capacity.

The report defines last-mile delivery as the “transportation of big and bulky shipments (not parcels) from the last warehouse or terminal to the final consignee for commodities such as furniture/mattresses, appliances, electronics/high-tech, exercise equipment, construction materials, industrial machinery, or medical equipment to a destination within the United States where they will be used or consumed. These can be business-to-business (B2B) or business-to-consumer (B2C) shipments.”

The report observed that the 3PLs it analyzed had 2024 last-mile delivery revenues ranging from $1.5 million-to-$1.1 billion, representing approximately 32% of the estimated $10.15 billion U.S. Third-Party Logistics Big and Bulky Last-Mile Delivery Market. And according to A&A estimates, the U.S. 3PL Big and Bulky Last-Mile Delivery Market’s compound annual growth rate (CAGR) was 11.4% from 2017 through 2024 and estimates a CAGR of 7.2% from 2024 through 2026. 

One major driver for the expected future CAGR decline for this segment, according to the report, is what it called considerable uncertainty in regards to the newly imposed tariff levels. And it added that a decrease in consumer spending will have the most significant impact on big and bulky last-mile delivery 3PLs. With the demand for last-mile delivery in tandem with consumer behavior, the report said that is viewed as a “major challenge,” which contributes to its lower growth projections from 2024-2026.

While 2024 U.S. 3PL Big and Bulky Last-Mile Market gross revenue came in at $10.15 billion, the report pegged 2025 and 2026 at $10.86 billion and $11.66 billion, respectively.

In an interview with LM, Armstong & Associates CEO Evan Armstrong, said a strong component of the big and bulky last-mile market is that there is a nice tailwind from ongoing e-commerce retail sales.

“The trend from brick and mortar to online sales is continuing,” he said. “When it comes to big and bulky last-mile, we're headed in the right direction. It's a very attractive market segment from a supply side and the demand side, in terms of shippers needing last-mile capacity. It's also an area of interest for M&A activity, and has been an area of quite a few transactions over the past five years.”

Looking at trucking capacity for the big and bulky last-mile market, the report highlighted a major uptick in the utilization of owner-operators and independent contractors from 2021-2024, as they comprised 96.4% of the driver workforce for last-mile delivery operations, topping 2023’s 92.6% tally, whereas employee drivers accounted for only 3.6%.

Armstrong said that the most common business model is to have independent contractor drivers for these last-mile delivery companies, which has served as an overarching industry strategy over the last 20 years.

“What we're really seeing now is, even to get a further arm's-length relationship between the company and its underlying capacity, there is more usage of freight brokerage—brokering last-mile shipments to small fleets—to companies with around five-to-seven trucks,” he said. “It is just another way to find capacity. Legislation like AB 5 in California has made it hard on certain players, because they are using independent contractors to maintain those relationships and not having them be declared as employees. In some cases, you see people that don’t want to be company employees and may instead want to run a small fleet of three-to-five trucks.”

What’s more, he said there needs to be a place, from a regulatory standpoint, in this approach to the last-mile delivery business, to allow for independent contractors to really run their own businesses, in addition to having employee drivers and allowing companies to use freight brokerage capacity, coupled with getting high delivery performance standards for shippers and providing a good last-mile delivery experience for consignees. 

Assessing big and bulky last-mile deliveries by commodity in 2024, the report showed appliances, at 40.6%, and furniture, at 30.2%, leading the way, with other sectors, ranging from medical equipment, at 0.8%, to construction materials, at 9.0%, comprising the balance, along with industrial machinery (1.4%), mattresses (3.1%), exercise equipment (6.6%), other (2.7%), and electronics/high-tech (5.6%). And from a revenue perspective, appliances and furniture were also the pacesetters, at $4.119 billion and $3.059 billion, respectively.

“Appliances and furniture have always been a mainstay, of sorts, for last-mile delivery providers,” said Armstrong. “A lot of that is just because you need to have some specialization to do, say, white glove delivery of appliances, make sure that the water connection is right if you're delivering a refrigerator or a dishwasher, for example. There's an installation piece of that that requires some expertise.”