From Chaos to Control: UPS Capital Report Highlights How Merchants Can Win the Last-Mile Battle

With 73% of businesses covering shipping mishap losses out-of-pocket, learn how merchants can regain control of last-mile logistics to manage costs and meet rising consumer expectations.

Global retail eCommerce sales are projected to surpass $4.3 trillion in 2025. As the industry continues its rapid expansion, merchants face increasing pressure to deliver faster, more efficiently, and with greater transparency—all while keeping costs in check.

However, many are struggling to keep pace with these mounting last-mile delivery expectations. An overwhelming 85% of merchants recently surveyed say that demand for faster delivery has impacted their ability to maintain control over last mile logistics, with 42% citing major disruptions.

The Taking Back Control: How Merchants Can Win the Last-Mile Battle report, commissioned by UPS Capital, delves into this evolving landscape. Drawing insights from 500 eCommerce merchants and 1,000 U.S. consumers, the report examines how last-mile delivery has shifted over the past few years and what merchants need to do to regain control in 2025.

Declining Trust in the Gig Economy

The gig economy was once celebrated as the future of last-mile delivery, offering speed, flexibility, and cost savings. Yet, that early optimism has faded as both consumers and merchants question its reliability.

In 2025, 62% of surveyed merchants reported an increase in damage, theft, or delays tied to gig-driven deliveries—a stark reversal from just a few years prior. In 2022, 69% of surveyed merchants believed gig services provided superior customer satisfaction over traditional carriers. Today, confidence has plunged, with only 12% of respondents expressing trust in gig carriers’ service quality.

Consumers share this shift in sentiment. In 2022, convenience fueled widespread adoption, with 63% of surveyed shoppers preferring businesses offering same-day gig delivery. Fast-forward to 2025, and the landscape looks very different: 55% of consumers surveyed now favor traditional carriers, while just 20% actively choose gig-powered delivery.

The most common consumer complaints about gig-driven deliveries include:

Delayed packages
Lack of timely communication
Missing or damaged shipments

Rising Consumer Expectations for Speed and Control

Speed has become the leading factor influencing where consumers shop. Nearly a third (31%) of consumers surveyed rank fast delivery as their top priority—outpacing both cost and product selection. This demand is even more pronounced among younger consumers: 51% of Gen Z respondents prioritize quick shipping, compared to only 15% of Baby Boomers.

Personalization is also key. Nearly half (44%) of shoppers surveyed want the ability to customize their shipping preferences, and 84% say they’re more likely to buy from merchants that offer personalized delivery options.

Delivery Perks that Make Consumers More Likely to Purchase:

65% – Ability to track packages in real-time
55% – Ability to pick package arrival day/time
50% – Guaranteed insurance coverage of all packages in case of mishap

The Brand Risk of Shipping Issues

An overwhelming 98% of surveyed merchants agree that delivery experience impacts brand reputation, with 58% ranking it among the most critical factors. This makes managing consumer’s last-mile frustrations essential as delivery issues can heavily influence purchasing decisions.

Consumers’ Biggest Frustrations in Last-Mile Delivery:

38% – Late or missed deliveries
37% – Package left in unsafe locations
34% – Lack of real-time tracking or updates

Nearly two-thirds (61%) of consumers surveyed check reviews before buying, with younger generations even more cautious: 74% of Gen Z and 73% of Millennial respondents routinely research retailer reliability before hitting "buy."

If a brand fails to resolve a shipping issue, a quarter (25%) of surveyed consumers hesitate to shop with them again, and nearly 44% of Gen Z respondents demand issue resolution before considering a repeat purchase.

Consumers Not Sold on Social Commerce

The rise of social commerce—shopping directly through platforms like Instagram, TikTok, and Facebook—is transforming eCommerce. However, trust remains a significant barrier to widespread adoption.

Only 19% of surveyed shoppers trust social media storefronts for deliveries, and 39% have never attempted a social commerce purchase at all.

While younger consumers are more open to the trend, confidence issues persist across generations. Millennial (30%) and Gen Z (25%) respondents express the highest confidence in social storefronts, but 70% of surveyed Boomers have avoided social commerce entirely.

Take Back Control of the Last Mile

Delivery mishaps—whether from theft, damage, or delays—now affect more than just a merchant’s bottom line. They directly influence brand trust, customer satisfaction, and long-term loyalty. To stay competitive, merchants must prioritize innovation, transparency, and last-mile reliability to not just survive but thrive in the evolving eCommerce landscape.

Solutions like UPS Capital’s InsureShield Shipping Insurance help merchants mitigate last-mile risks, ensuring they can deliver with confidence from cart to customer doorstep.

For more data and insights on how to take back control of the last mile, get the full report.