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The other side of last-mile delivery

28 Jan 2019
We've written about it extensively in earlier blogs: last-mile delivery is a hot topic, especially when it involves the type of vehicles used and the question of whether these are autonomous or not. There is, however, another aspect of last-mile delivery - one which is up for improvement.

Different online retailers use different shippers, which results in inefficiency: sometimes, multiple deliveries are made to the same address in one day. If, for example, DHL and PostNL both deliver a package to one household, both carriers need to drive their vehicles into the same street. Put that into a broader perspective, and you'll see that the rapid growth in delivery vehicles is impacting the livability of cities.


Additionally, the transition to electric delivery vehicles is still going slowly, even though back in 2014, multiple parties committed to achieving emission-free city logistics in 2025.

What should change?

The development of alternative delivery vehicles alone won't suffice. We need to move towards alternative, smarter city logistics concepts. How? Well, imagine, for example, that shippers collaborate on last-mile delivery. Packages are split amongst them in such a way that only one vehicle per neighborhood is required (see sources 3 and 4 - on Urban Consolidation Centers).


It will reduce emissions, the number of wrongly parked delivery trucks, and the cost of delivery. Moreover, it will aid the much-needed transition to electric vehicles: if deliveries are better grouped, vehicle routes will be shorter (drop-density rates will be higher), facilitating the switch to (light) electric vehicles.


Incidentally, initiatives like these already exist in the B2B market. Check out this example in Nijmegen, where shops in the city center are supplied through this concept, or have a look at other examples and background information here.


Wouldn't it be nice if we could introduce something similar in the B2C market? After all, the benefits are clear and proven by scientific studies (see sources 1 and 2).


Trial in London

As this article (source 3) describes, a major stationary and office supplies company led an interesting trial in London. Originally, diesel vehicles were used to make urban freight deliveries in central London from a depot in the suburbs. Instead (for the trial), the company decided to use an urban micro-consolidation center in the delivery area, coupled with electrically-assisted cargo tricycles and electric vans. The result: the total distance traveled and the CO2eq emissions per parcel delivered dropped by 20% and 54%, respectively.


What should be done?

Based on the hurdles encountered in B2B initiatives, we can keep the following lessons in mind when determining what should be done in the B2C market (see also source 7):

  1. Although the additional cost of cross-docking/transshipment will land with the vendor/shipper, benefits such as lower CO2 emissions and one delivery per address will not. Therefore, the vendor/shipper probably won’t initiate this change.

  2. Organizing a cross vendor/shipper collaboration is complex, and there is no clear coordinator in the supply chain to initiate this change (in the B2B examples, a group of shop owners organized the urban consolidation).

  3. Delivery speed must be maintained: same-/next-day delivery should remain possible to get consumers on board.

Here's what I think: to make this work, the (local) government should assume a role in organizing the change. We've waited too long for businesses to initiate and implement such adjustments independently. Forcing the use of Urban Consolidation Centers will help reach the goals of emission-free urban logistics, which consumers should value more than same-day delivery or cost of delivery - at least, in the long run. In the end, they are, first and foremost, citizens, and none of them would prefer to breathe in polluted air!


Sources

  1. 2012, Mireia Roca-Riua , Miquel Estradaa, An evaluation of urban consolidation centers through logistics systems analysis in circumstances where companies have equal market shares (link)
  2. 2015, Andrés Muñoz-Villamizar, Jairo R. Montoya-Torres, Carlos A. Vega-Mejía, Non-Collaborative versus Collaborative Last-Mile Delivery in Urban Systems with Stochastic Demands (link)
  3. 2011, Michael Browne, Julian Allen, Jacques Leonardi, Evaluating the use of an urban consolidation centre and electric vehicles in central London (link)
  4. 2012, Sara Verlinde, Cathy Macharis, Frank Witlox, How to Consolidate Urban Flows of Goods Without Setting up an Urban Consolidation Centre?
  5. http://www.goederenhubs.l/
  6. https://greendealzes.connekt.nl/zero-emission-stadslogistiek/
  7. http://wiki4city.ieis.tue.nl/index.php?title=Urban_consolidation_center

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