Last-Mile Delivery to Experience Slower Recovery Times: project44

Last-mile delivery could experience slower recovery times and more interruptions going forward in 2025 due to changes in U.S. tariff and immigration policy, according to stats revealed by project44.

“Recent mass deportation efforts across the United States could significantly affect the logistics workforce. With many warehouse workers and truck drivers being immigrants, intensified enforcement may create labor shortages throughout the supply chain. This could slow warehousing operations and order fulfillment while increasing operational costs. Companies may struggle to maintain sufficient capacity, particularly during high-demand periods,” according to project44.

“Recent modifications to U.S. trade policy have eliminated the minimum value exemption for tariff-free shipments from China and Hong Kong. This means all shipments, regardless of value, now face tariffs—increasing costs for businesses dependent on frequent, low-value imports. The situation is further complicated by DHL and Hongkong Post’s suspension of U.S.-bound parcel services. These combined factors may result in extended shipping delays, higher operational costs, and more complex international supply chain management,” adds project44.

Key takeaways:

• On-time performance declined to the upper-70% range by January 2025, roughly 6% lower than the previous year. Despite this decrease, actual delivery times remained faster due to more aggressive estimated arrival times.
• Shippers continued their 2023 trend of network diversification, increasing their carrier usage by 10% between October 2024 and January 2025.
• Average delivery times continued their downward trend through the peak season. December 2024 saw the highest average at 4.8 days—nearly 6% lower than the previous year’s peak of 5.1 days in November. The recovery was swift, with delivery times decreasing 15% between December and January.
• On-time performance declined to the upper-70% range by January 2025, roughly 6% lower than the previous year. While this peak season’s overall performance was weaker than last year, delivery times were faster overall, indicating more aggressive ETAs.
• Overall, there has been an industry trend of increasing carrier diversification since COVID-19, where last mile and parcel volumes surged. This trend is fueled by the growing availability of smaller carriers alongside established players. For peak season this year, retailers added an average of 10% more carriers to their network to handle holiday volume.
• This is the first year complaints about “Delivered but Missing” packages outnumbered those about delayed shipments.