delivery bike

The Last Mile issue: how can we solve urban delivery problems?

Author | Esther Fuldauer

Rising traffic congestion, air and noise pollution are major challenges for cities. A big part of the congestion in city centers is caused by Urban Freight Transport (UTF), particularly during the final step of the delivery process, the so called Last Mile.

Growing urbanization and e-commerce are making things worse. In Spain alone, the market share of e-commerce has grown by 37% in the last 3 years, and it’s expected to grow up to 11.4% by 2020. People’s habits are changing too, making more small orders every day and demanding speed, deliveries for the same day or in less than 2 hours. If nothing is done cities will reach total gridlock very quickly.

The economic costs of congestion are high. When delivery vehicles get stuck, businesses spend more in fuel and labor. Congestion costs as much as 2 to 4% of city GDP. In fact, Last Mile Delivery is considered the most costly part of the delivery process and companies and cities are actively working on testing and developing policy for different solutions.

last mile deliveryWhat are solutions to help curb the last mile delivery problem?

  1. Urban consolidation centers (UCCs)

UCCs are buildings where packages are brought, sorted, and dispatched. They are usually located at the outskirts of cities and make delivery truck trips shorter. This solution in developed, dense cities could save companies 25% per parcel delivery.

These could become more granular as interoperable standard modules located in inner-city areas. These can contribute to the optimisation of load units, as well as inter-connectivity with physical movement throughout the complete supply chain.

  1. EA cargo bikes

Many companies are introducing EA cargo bikes as an alternative mode for last mile delivery. A recent study presented EA cargo bikes as more cost-effective when compared to delivery trucks for deliveries in close proximity to a distribution center, where there is high density and low delivery volumes per stop.

EA cargo bikes are very convenient, especially in cities with good cycling infrastructure and they are a very sustainable and convenient solution to replace heavy vehicles in cities for the last mile.

  1. Parcel lockers & Load Pooling

Parcel lockers distributed in central locations of different districts save time and mileage, with more efficient routing and fewer failed deliveries. Parcel lockers could cut vehicle emissions as much as 70%, decrease labor time per parcel by 70% and reduce delivery costs per parcel by 35%.

They could have even greater results combined with a ‘crowdshipping’ platform, where people would use public transport to pick up or drop off goods in the automated parcel lockers. But this option will need to be heavily incentivised through policymaking, at least at first.

RYTLE is an innovative modular concept which integrates e-cargo bikes with modular containers and mobile depots.

There’s a need for new concepts of consolidation and distribution centers which are capable of opening the doors to multimodal cross-dock micro platforms and combining the transportation of both freight and passengers.

  1. Night deliveries shift traffic to off-peak hours

Night deliveries shift traffic to off-peak hours reducing congestion by day and allowing suppliers to use bigger trucks and reduce the number of deliveries. Shifting to night could speed up commercial deliveries by half and cut costs by up to 50%. But there are still noise concerns.

Tests in several cities have found that local traffic gets better and speeds go up while shipment times go down. In New York, the off-hour delivery pilot program was a huge success. The economic benefits were estimated to be $193 million a year.

To introduce night-time delivery, a good collaboration between retailers, the municipality and residents is a must.

last mile delivery

  1. EVs

EVs are quiet and clean and would allow for the use of larger vehicles, but there are still many challenges in the transition towards EVs to be overcome. However technology is rapidly changing. Electric vehicles are growing cheaper and fast EV-chargers are more widely available. It is important to keep incentivising electric mobility for a wider adoption.

  1. Autonomous ground vehicles (AGVs) and Drones

We can think about a not too far away future with autonomous vehicles and drones. When cities are ready for them they will add flexibility and will lower the cost per parcel up to 50%.  These new vehicles will sharply cut emissions of CO2, NOx, and particulates.

AVs can be combined with parcel lockers, with all the advantages of both robotics and flexible locked space.

Each city has its own conditions and ecosystem. It will take a collaborative effort between freight companies and municipalities to develop a sustainable urban freight system. It is clear that they need consistent work in policymaking and mobility planning. Solving the last mile delivery is urgent and will save cities from an imminent gridlock.

Images | Imagine Cargo, Fancycrave, Sunyu Kim