Transportation costs are highest using last mile delivery. This is because package carriers aggregate
delivery across many retailers and are able to obtain better economies of scale than available to a
distributor / retailer attempting last mile delivery. Delivery costs (including picking and transportation)
can be as high as $30-$40 per home delivery in the grocery industry. Last mile delivery may be
somewhat cheaper in dense cities. Transportation costs may also be justifiable for bulky products
where the customer is willing to pay for home delivery. Home delivery for water and large bags of rice
has proved quite successful in China, where the high population density has helped decrease delivery
costs.