A couple of years ago, the majority of inner city deliveries consisted of B2B-shipments, with larger orders were delivered to a few places within the cities. Although there was a flourishing mail-order business, but the volume could’t be compared to the volumes being dealt with nowadays. As a result, cities’ transport infrastructures were focused on handling this B2B-heavy type of shipping.
But all these circumstances changed with the start of the digital age and the rise of e-commerce. Now the last mile logistics (the final step in the delivery process, from the distribution center to the consumer) creates huge problems for the cities, the senders, and the customers – it has become one of the biggest obstacles that urban mobility has yet to overcome.
The Transport Infrastructure in Many Cities is on the Brink of Collapse
Why? Maybe the problem is best described by a few statistics: 3.16 billion packages were delivered in Germany in 2016 alone. That’s almost double the amount to what was delivered in 2000. And these number will continue to rise in the future. Furthermore, the delivery of goods generates 30% of the traffic volume within cities and causes 80% of the traffic jams during the rush hour. A reason why: Parking space for delivery vehicles are rare in many cities. As a result, couriers often double-park, causing many traffic jams.
Although B2B-delivery often meant the shipping of larger amounts of goods to a few places within the city where people would receive the delivery of goods, B2C-deliveries often act exactly the opposite way. Huge amounts of small packages need to be distributed to lots of different places within the city and oftentimes the recipient isn’t even at home. In this case, the delivery process has to be started all over again.
The lack of a real transition time from a B2B-heavy shipment system to a B2C-focused one is the biggest problem for cities. The sheer amount of package deliveries and the rising volume of delivery traffic overtook the development of the transport infrastructure. The cities didn’t have a real chance to adapt to this change because of the rapid pace at which online orders were increasing. The infrastructure is already struggling to handle the amount – and the demand for package deliveries is only increasing.
The Frustration With the Current Situation Grows
But the problems of the last mile don’t all revolve around these infrastructural problems: The environment is affected as well. Remember that 30% of the traffic volume within cities consists of delivery vehicles? Most of these cars run on combustion engines. They get turned on and off countless times a day and often drive stop-and-go, creating large amounts of exhaust emissions. The environmental and air pollution as well as the noise pollution can’t be ignored.
The cities, the senders, and the customers are becoming increasingly frustrated with this situation. The senders because they can’t bundle their deliveries and instead have to deliver lots of articles to lots of different places; people not being at home to receive their packages is also a huge problem. The customers often struggle with delayed deliveries and the cities are failing to deal with the problems regarding their infrastructure and environment. There is an urgent need for solutions on the last mile.
Hubs, Sharing, Drones – Possible Solutions for the Future?
The first solutions and ideas already exist. Some of them are well-developed and ready to be used, whilst others are still a bit more futuristic and in the testing stage:
City hubs: City hubs are local (optionally mobile) distribution centres. Senders can bundle their deliveries and bring them to these centres. There they are processed and distributed within the city hub’s area. Ideally, different carriers all use these centres and the delivery from the hub to the consumer will be done climate-neutrally by foot or bike. Big distribution centres outside the cities are another possibility. Carriers can deliver huge amounts of goods to these places where they are processed and distributed without additional trucks entering the city.
Sharing: Sharing is becoming more popular by the day. Cars and bikes are now entering the logistics segment. Companies like Nimber and Uber were one of the first do develop ideas for sharing in logistics: On a data platform people (professionals or privately) can offer free space in their vehicles for others to transport small packages. While the majority of the logistics industry are critical of this concept, the sharing of free capacity can become a valuable tool in the future to boost the efficiency of deliveries.
Drones: Delivering packages via drones is maybe the most well-known idea for last mile logistics in the public. Recently, the car manufacturer Mercedes, the online retailer Siroop and the drone manufacturer Matternet startet a project in Zurich to test drones as a delivery vehicle – the project is called Vans & Drones. Here if a product is ordered at the online-retailer, an autonomous drone delivers it to a fixed point, where a courier will receive and deliver it to the customer. Even if this project is still more an idea than a practical solution, it shows that for small and quick deliveries (for example food), delivery trucks or cars can be replaced.
E-mobility: E-mobility might not solve the problems of the high traffic volume, but it can solve its result. The electrification of the carriers’ truck fleets can reduce air and noise pollution within the cities.
There are also additional efforts to simplify the delivery itself. For example through packing stations or package boxes where packages can be stored for the recipient to pick them up. The idea is to get the customer to the good, rather than the good to the customer. All of these mentioned ideas and solutions show the direction of the last mile delivery in the future. New technologies, digitisation or the shared usage of of space show that they are able to deal with the obstacles of last mile logistics.
There Is No Single Solution
While these concepts can deal with the obstacles, they can’t overcome them by themselves. There is no such thing as one solution for the last mile. Drones alone can’t handle the package volume. E-Mobility alone can’t improve the efficiency of the delivery process or reduce the traffic volume.
A mixture of these concepts is what is needed. City hubs as local distribution centres allow senders to bundle their deliveries and reduce the amount of delivery vehicles. Climate-neutral vehicles like bikes or electric trucks reduce the amount of exhaust emissions. Sharing of empty space improves the efficiency of deliveries. Digital solutions (like package-tracking) allows a better communication between the sender and the customer, so that the recipient is present when the delivery arrives.
A thought-out concept consisting of these smaller solutions is way more valuable and has a higher chance to succeed than the hunt for one big solution.