diff --git a/pnpm-workspace.yaml b/pnpm-workspace.yaml
new file mode 100644
index 0000000..bc4d724
--- /dev/null
+++ b/pnpm-workspace.yaml
@@ -0,0 +1,3 @@
+allowBuilds:
+  mongodb-memory-server: set this to true or false
+  unrs-resolver: set this to true or false
diff --git a/src/controllers/deliveryController.ts b/src/controllers/deliveryController.ts
new file mode 100644
index 0000000..6e9aee9
--- /dev/null
+++ b/src/controllers/deliveryController.ts
@@ -0,0 +1,43 @@
+import { Request, Response, NextFunction } from 'express';
+import { DeliveryService, allowedStatuses, isValidDeliveryStatus } from '../services/deliveryService';
+import { HttpError } from '../utils/httpError';
+
+interface UpdateDeliveryStatusRequest extends Request {
+  params: {
+    id: string;
+  };
+  body: {
+    status?: string;
+  };
+}
+
+export const updateDeliveryStatus = async (
+  req: UpdateDeliveryStatusRequest,
+  res: Response,
+  next: NextFunction,
+): Promise<void> => {
+  try {
+    const { id } = req.params;
+    const { status } = req.body;
+
+    if (!status || typeof status !== 'string') {
+      throw new HttpError(400, 'Status is required and must be a string');
+    }
+
+    if (!isValidDeliveryStatus(status)) {
+      throw new HttpError(
+        400,
+        `Status must be one of: ${allowedStatuses.join(', ')}`,
+      );
+    }
+
+    const delivery = await DeliveryService.updateDeliveryStatus(id, status);
+
+    res.status(200).json({
+      status: 'success',
+      data: delivery,
+    });
+  } catch (error) {
+    next(error);
+  }
+};
diff --git a/src/middleware/auth.ts b/src/middleware/auth.ts
new file mode 100644
index 0000000..3164547
--- /dev/null
+++ b/src/middleware/auth.ts
@@ -0,0 +1,54 @@
+import { NextFunction, Request, Response } from 'express';
+import jwt, { JwtPayload } from 'jsonwebtoken';
+import { HttpError } from '../utils/httpError';
+
+const jwtSecret = process.env.JWT_SECRET || 'changeme';
+
+export interface AuthenticatedRequest extends Request {
+  user?: JwtPayload & {
+    role?: string;
+    sub?: string;
+  };
+}
+
+export const authenticate = (
+  req: AuthenticatedRequest,
+  res: Response,
+  next: NextFunction,
+): void => {
+  const authHeader = req.headers.authorization;
+
+  if (!authHeader || !authHeader.startsWith('Bearer ')) {
+    next(new HttpError(401, 'Authorization header missing or malformed'));
+    return;
+  }
+
+  const token = authHeader.split(' ')[1];
+
+  try {
+    const payload = jwt.verify(token, jwtSecret);
+
+    if (typeof payload === 'string') {
+      next(new HttpError(401, 'Invalid authorization token')); 
+      return;
+    }
+
+    req.user = payload;
+    next();
+  } catch (error) {
+    next(new HttpError(401, 'Invalid or expired authorization token'));
+  }
+};
+
+export const authorize = (allowedRoles: string[] = ['driver', 'admin']) => {
+  return (req: AuthenticatedRequest, res: Response, next: NextFunction): void => {
+    const role = req.user?.role;
+
+    if (!role || !allowedRoles.includes(role)) {
+      next(new HttpError(403, 'Insufficient permissions to perform this action'));
+      return;
+    }
+
+    next();
+  };
+};
diff --git a/src/models/deliveryModel.ts b/src/models/deliveryModel.ts
new file mode 100644
index 0000000..d75f9ee
--- /dev/null
+++ b/src/models/deliveryModel.ts
@@ -0,0 +1,35 @@
+import { Document, model, Schema } from 'mongoose';
+
+export type DeliveryStatus = 'pending' | 'assigned' | 'picked_up' | 'in_transit' | 'delivered';
+
+export interface DeliveryDocument extends Document {
+  customerName: string;
+  pickupLocation: string;
+  dropoffLocation: string;
+  packageDetails: string;
+  status: DeliveryStatus;
+  assignedDriver?: string;
+  createdAt: Date;
+  updatedAt: Date;
+}
+
+const deliverySchema = new Schema<DeliveryDocument>(
+  {
+    customerName: { type: String, required: true, trim: true },
+    pickupLocation: { type: String, required: true, trim: true },
+    dropoffLocation: { type: String, required: true, trim: true },
+    packageDetails: { type: String, required: true, trim: true },
+    status: {
+      type: String,
+      enum: ['pending', 'assigned', 'picked_up', 'in_transit', 'delivered'],
+      default: 'pending',
+      required: true,
+    },
+    assignedDriver: { type: String, default: null },
+  },
+  {
+    timestamps: true,
+  },
+);
+
+export const Delivery = model<DeliveryDocument>('Delivery', deliverySchema);
diff --git a/src/routes/deliveries.ts b/src/routes/deliveries.ts
new file mode 100644
index 0000000..b5bf14b
--- /dev/null
+++ b/src/routes/deliveries.ts
@@ -0,0 +1,9 @@
+import { Router } from 'express';
+import { authenticate, authorize } from '../middleware/auth';
+import { updateDeliveryStatus } from '../controllers/deliveryController';
+
+const router = Router();
+
+router.put('/:id/status', authenticate, authorize(['driver', 'admin']), updateDeliveryStatus);
+
+export default router;
diff --git a/src/routes/index.ts b/src/routes/index.ts
index 68e0f11..4d7aef5 100644
--- a/src/routes/index.ts
+++ b/src/routes/index.ts
@@ -1,9 +1,8 @@
 import { Router } from 'express';
+import deliveryRoutes from './deliveries';
 
 const router = Router();
 
-// Define your routes here
-// router.use('/auth', authRoutes);
-// router.use('/users', userRoutes);
+router.use('/deliveries', deliveryRoutes);
 
 export default router;
diff --git a/src/services/deliveryService.ts b/src/services/deliveryService.ts
new file mode 100644
index 0000000..23a5719
--- /dev/null
+++ b/src/services/deliveryService.ts
@@ -0,0 +1,52 @@
+import { isValidObjectId } from 'mongoose';
+import { Delivery, DeliveryDocument, DeliveryStatus } from '../models/deliveryModel';
+import { HttpError } from '../utils/httpError';
+
+const statusTransitions: Record<DeliveryStatus, DeliveryStatus[]> = {
+  pending: ['assigned'],
+  assigned: ['picked_up'],
+  picked_up: ['in_transit'],
+  in_transit: ['delivered'],
+  delivered: [],
+};
+
+export const allowedStatuses = Object.keys(statusTransitions) as DeliveryStatus[];
+
+export const isValidDeliveryStatus = (status: string): status is DeliveryStatus => {
+  return allowedStatuses.includes(status as DeliveryStatus);
+};
+
+const isValidTransition = (current: DeliveryStatus, next: DeliveryStatus): boolean => {
+  return statusTransitions[current].includes(next);
+};
+
+export class DeliveryService {
+  static async updateDeliveryStatus(id: string, status: DeliveryStatus): Promise<DeliveryDocument> {
+    if (!isValidObjectId(id)) {
+      throw new HttpError(400, 'Invalid delivery id');
+    }
+
+    const delivery = await Delivery.findById(id);
+
+    if (!delivery) {
+      throw new HttpError(404, 'Delivery not found');
+    }
+
+    if (delivery.status === status) {
+      return delivery;
+    }
+
+    if (!isValidTransition(delivery.status, status)) {
+      const availableNext = statusTransitions[delivery.status].join(', ') || 'none';
+      throw new HttpError(
+        400,
+        `Invalid status transition from '${delivery.status}' to '${status}'. Allowed next statuses: ${availableNext}`,
+      );
+    }
+
+    delivery.status = status;
+    await delivery.save();
+
+    return delivery;
+  }
+}
diff --git a/src/utils/httpError.ts b/src/utils/httpError.ts
new file mode 100644
index 0000000..7b3f1b2
--- /dev/null
+++ b/src/utils/httpError.ts
@@ -0,0 +1,10 @@
+export class HttpError extends Error {
+  statusCode: number;
+
+  constructor(statusCode: number, message: string) {
+    super(message);
+    this.statusCode = statusCode;
+    Object.setPrototypeOf(this, HttpError.prototype);
+    Error.captureStackTrace?.(this, this.constructor);
+  }
+}
diff --git a/tests/deliveryStatusUpdate.test.ts b/tests/deliveryStatusUpdate.test.ts
new file mode 100644
index 0000000..4ecf63c
--- /dev/null
+++ b/tests/deliveryStatusUpdate.test.ts
@@ -0,0 +1,99 @@
+import request from 'supertest';
+import mongoose from 'mongoose';
+import jwt from 'jsonwebtoken';
+import { MongoMemoryServer } from 'mongodb-memory-server';
+import { Delivery } from '../src/models/deliveryModel';
+
+jest.setTimeout(60000);
+
+jest.mock('../src/config/logger', () => ({
+  info: jest.fn(),
+  error: jest.fn(),
+  warn: jest.fn(),
+  debug: jest.fn(),
+}));
+
+describe('Delivery Status Update API', () => {
+  let app: any;
+  let mongoServer: MongoMemoryServer;
+  const jwtSecret = 'test-secret';
+
+  const buildToken = (role = 'driver'): string => {
+    return jwt.sign({ sub: 'test-user-id', role }, jwtSecret, { expiresIn: '1h' });
+  };
+
+  beforeAll(async () => {
+    mongoServer = await MongoMemoryServer.create();
+    process.env.MONGODB_URI = mongoServer.getUri();
+    process.env.JWT_SECRET = jwtSecret;
+
+    const imported = await import('../src/app');
+    app = imported.default;
+  });
+
+  afterAll(async () => {
+    await mongoose.connection.dropDatabase();
+    await mongoose.disconnect();
+    await mongoServer.stop();
+  });
+
+  afterEach(async () => {
+    await Delivery.deleteMany({});
+  });
+
+  it('returns 401 when authorization token is missing', async () => {
+    const response = await request(app)
+      .put('/api/v1/deliveries/507f1f77bcf86cd799439011/status')
+      .send({ status: 'assigned' });
+
+    expect(response.status).toBe(401);
+    expect(response.body).toHaveProperty('status', 'error');
+    expect(response.body.message).toMatch(/Authorization header missing or malformed/i);
+  });
+
+  it('updates delivery status after a valid transition', async () => {
+    const delivery = await Delivery.create({
+      customerName: 'Alice',
+      pickupLocation: '123 Market St',
+      dropoffLocation: '456 Park Ave',
+      packageDetails: 'Small parcel',
+      status: 'pending',
+    });
+
+    const token = buildToken('driver');
+
+    const response = await request(app)
+      .put(`/api/v1/deliveries/${delivery._id}/status`)
+      .set('Authorization', `Bearer ${token}`)
+      .send({ status: 'assigned' });
+
+    expect(response.status).toBe(200);
+    expect(response.body).toHaveProperty('status', 'success');
+    expect(response.body.data).toHaveProperty('status', 'assigned');
+
+    const updated = await Delivery.findById(delivery._id);
+    expect(updated).not.toBeNull();
+    expect(updated?.status).toBe('assigned');
+  });
+
+  it('returns 400 for invalid status transitions', async () => {
+    const delivery = await Delivery.create({
+      customerName: 'Alice',
+      pickupLocation: '123 Market St',
+      dropoffLocation: '456 Park Ave',
+      packageDetails: 'Small parcel',
+      status: 'pending',
+    });
+
+    const token = buildToken('driver');
+
+    const response = await request(app)
+      .put(`/api/v1/deliveries/${delivery._id}/status`)
+      .set('Authorization', `Bearer ${token}`)
+      .send({ status: 'delivered' });
+
+    expect(response.status).toBe(400);
+    expect(response.body).toHaveProperty('status', 'error');
+    expect(response.body.message).toMatch(/Invalid status transition/i);
+  });
+});