The Last Mile

According to Wikipedia, the last mile is a phrase widely used in the telecommunication industry to refer to the final leg of the networks that deliver telecommunication services to retail end-users.  The actual length of the “last mile” may be more or less than a mile.

The “last mile” is typically the speed and cost bottleneck in communication networks.  This concept is also very applicable to a number of other industries.

For example, the package delivery industry gathers parcels into a central location, transports them to another location, nearer to their final destination, and then distributes them to the final recipient.

Similarly, the liquefied and compressed natural gas industry also collects gas for international transport from a number of producers, processes same for loading onto ships, and then reverses the process at the other end.

The actual, long distance movement of natural gas and packages is relatively inexpensive, compared to the cost of building and operating the terminals, that is, the last mile.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA