Last-mile logistics: What does the future look like for the industry in Europe?

The last-mile logistics industry in Europe is without a doubt on the cusp of profound transformation. Over the next 5 to 10 years, a combination of technological innovation, regulatory change, and evolving consumer expectations will reshape how goods move from distribution hubs to end customers, with a significant impact on involved industry players, transport and logistics companies. This article explores the key trends, challenges, and opportunities that will define the sector, which we will illustrate through a few concrete examples from France (where the last-mile logistics market is expected to grow by 50% between 2023 and 2030), Spain and Germany.

E-Commerce Growth: The Engine of Change

E-commerce continues to be the primary driver of last-mile logistics evolution. In Western Europe, e-commerce sales soared to €499 billion in 2021, up from €410 billion in 2019, and the market shows no sign of slowing down, the rise of C2C commerce of second-hand goods proving a powerful new growth driver. By 2030, the demand for last-mile e-commerce delivery is projected to grow by 78% compared to 2020 volumes. This explosive growth is forcing logistics providers to innovate rapidly, as the sheer volume of parcels challenges traditional delivery models.

Out-of-Home Delivery: The New Standard

One of the most significant shifts is the rise of out-of-home (OOH) delivery options. Parcel lockers and pickup points are quickly becoming the default choice for European consumers, offering flexibility and convenience that home delivery often cannot match. 32% of all parcels were OOH-delivered in France in 2023. By 2030, OOH delivery is expected to be the preferred method for a majority of e-commerce buyers throughout Europe.

Example: In France, Amazon has deployed around 2,800 parcel lockers—many in partnership with SNCF railway stations—making it easier for customers in Paris, Lyon, and Marseille to collect parcels at their convenience. DHL, another major player, already operates over 20,000 parcel lockers and 80,000 service points across Europe, with more than 25% of parcel volume in some markets already directed to access points.

Urban Traffic Restrictions and Decarbonization

European cities are aggressively targeting climate change by restricting access for Internal Combustion Engine vehicles in city centers. Low Emission Zones (LEZs) are proliferating, with cities like Madrid, Milan, and Brussels implementing or expanding bans on diesel and gasoline vehicles. In France, Paris and Lyon are tightening vehicle access rules for ICE vehicles, accelerating the shift to zero-emission fleets, but also now for “conventional format” electric delivery vans or trucks.

This regulatory pressure is driving logistics firms to invest in electric vehicles (EVs), cargo bikes, and other sustainable mobility solutions. The decarbonization of urban logistics is no longer optional—it is a business imperative.

Electric Cargo Bikes: Agile and Sustainable

Electric cargo bikes are emerging as a game-changer for last-mile delivery, especially in dense urban environments. Their small size and agility allow them to navigate cycle lanes, pedestrian zones, and LEZs, reaching customers more efficiently than vans. They are also cost-effective, with lower operating costs and minimal emissions.

Example: Renault Trucks, in partnership with Lyon-based Kleuster start-up company, is assembling “Freegônes” electric cargo bikes at its Vénissieux site. These bikes, with an 80 km range and modular cargo options, are being deployed for parcel and grocery deliveries in French cities, offering a sustainable alternative to traditional vans, while benefiting from still lenient regulations. Renault Trucks (a Volvo-owned company) thus became the first heavy truck maker to offer delivery vehicles with Gross Vehicle Weight Rating ranging from 650 kg up to 44 tons.

Automation and Technology: The Digital Backbone

The future of last-mile logistics will be powered by advanced software and automation. The Western European last-mile delivery software market is expected to grow at a CAGR of 10.3% from 2025 to 2035, reaching $3.27 billion by 2035, according to a Future Market Insights study. AI-powered delivery orchestration, predictive analytics, and blockchain-based traceability will become standard tools for managing complex, multi-modal delivery networks.

Logistics giants like DHL and DB Schenker are already using cloud-based platforms for fleet management, route optimization, and real-time tracking of electric vehicles. In France, national carriers and startups are leveraging APIs and mobile apps for contactless delivery, returns management, and carbon tracking, supporting the transition to greener, more efficient logistics.

Drone Deliveries: Taking Flight

The European Commission’s Drone Strategy 2.0 envisions drones as a routine part of urban logistics by 2030. Trials are underway in Germany and France, where drones are delivering small consignments, such as medicines and urgent parcels, especially in hard-to-reach or congested urban areas. While regulatory and technical challenges obviously remain, drones promise to further decarbonize last-mile delivery and reduce congestion.

Urban Warehousing: Scarcity and Innovation

As e-commerce grows, the demand for urban warehousing space is soaring. However, space in city centers is scarce and increasingly expensive. This scarcity is driving the rise of micro-fulfillment centers—small, automated warehouses located close to consumers. These facilities enable faster, more flexible deliveries and support the use of cargo bikes and compact electric vehicles for the final leg.

Example: In Paris, logistics providers are investing in micro-fulfillment centers within city limits, using advanced software to dynamically allocate inventory and optimize delivery routes. In Spain, Barcelona is experimenting with shared urban logistics hubs to consolidate deliveries and minimize traffic congestion.

The Road Ahead: Challenges and Opportunities

The next decade will indeed bring both challenges and opportunities for last-mile logistics in Europe:

• Sustainability vs. Cost: Balancing the need for sustainability with cost control will be a constant challenge. OOH delivery, electric mobility, and drones can reduce emissions but require significant upfront investment.
• Customer Expectations: As consumers demand faster, more flexible deliveries, logistics firms must continually innovate to meet these expectations while maintaining profitability.
• Regulatory Complexity: Navigating a patchwork of city-level regulations on vehicle emissions and access will require adaptable, tech-driven solutions.
• Talent and Skills: The shift to digital and automated logistics will increase demand for skilled workers in IT, data analytics, and fleet management.

Thriving in the dynamic landscape of European last-mile logistics

The future of last-mile logistics in Europe will be defined by rapid e-commerce growth, the mainstreaming of OOH delivery, the adoption of sustainable mobility solutions, and the integration of cutting-edge technology. France and Spain, like their European neighbors, are at the forefront of these changes, experimenting with new delivery models, embracing electric cargo bikes, and investing in micro-fulfillment centers.

For transport and logistics firms, the next 5 to 10 years will be a period of intense innovation and adaptation. Those who can harness technology, navigate regulatory change, and meet evolving consumer demands will thrive in the dynamic landscape of European last-mile logistics.

We take pride at CDI Global in our ability to support companies involved in such major evolutions, thanks to the unique combination of deep industry expertise and 50+ year M&A experience.

To optimally advise and support our last-mile logistics clients, our Transport & Logistics, Automotive and IT/Technology Industry Group leaders easily join forces and help them craft and roll out relevant strategies through our offices on all continents.

By: Gerard Payen, CDI Global Partner