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Due to the growing share of on-line shopping nowadays, an additional sales channel for companies has come up. Internet sales have become an essential part of retail business in recent years. Consequently, the volume of traffic caused by delivery services has increased rapidly with the success of e-commerce. Likewise, the delivery market slowly transforms from a mainly B2B market to a B2C one (e.g. Drone delivery). The final track of the supply chain – home delivery to a customer – is called “Last Mile”. The “Last-Mile” of a delivery poses significant logisticalcal challenges, especially regarding the increasing customer expectations, such as "same day delivery" or "exact time delivery" which leads to the decreasing time available for planning. Furthermore, the “Last mile” has a huge effect in traffic of commercial vehicles in cities. The Last Mile Delivery (LMD) accounts for a major part of the costs involved in a delivery. A research of Capgemini Research Institute showed that the costs of LMD account 41 % of the overall supply chain costs (Jacobs, Warner et al., p. 20).
Figure 1 - Distribution of overall supply chain costs (Jacobs, Warner et al., p. 20)
In the reality of LMD, challenges like a small or single order compared to deliveries to stores, many constantly changing geographically dispersed locations (compare deliveries to stores) etc. must be faced. The goal is to improve the efficiency of LMD, to minimise costs incurred, improve safety to minimise the impact on traffic as well as minimise the environmental impact. To improve the quality of life in the affected areas, the LMD should become environmentally friendly and emission-free (noise and emissions), the volume of traffic should be reduced to prevent illegal parking, collisions and stressful congestions.
Congestion, air quality, collisions and illegal parking are all ills affecting the quality of life of citizens. The accessibility of inner-city locations is becoming more and more limited for cars and trucks in contrast delivery services are growing especially in these dense inner-city areas.
There are several solutions to solve these problems that reduce pollutant emissions, lower the impact on traffic, improve safety and make LMD more efficient.
Reducing use of fossils
Reducing local air pollution
Improving life quality
Reducing need for travel
Enabling new business opportunities
Encouraging digital entrepreneurship
Reducing GHG emissions
Increasing share of renewables
Promoting sustainable behavior
Reducing operation costs
One variant is that electric vehicles perform the final stage of the supply process. This thereby ensures that carbon-emitting vehicles can be reduced in the most highly polluted area of a city. This model is a concept that offers great opportunities for replicability in many other environmental areas and therefore offers a good solution for any location seeking to reduce air pollution levels.
Using electric fleets as last mile delivery system reduces the carbon-emission producing vehicles in the areas of concern. Due to the smaller size of the vehicle not only is traffic reduced but also illegal parking. Plus, e-bikes can access narrow streets and the deliverer does not need a driver’s license.
Mobility
The aim is to promote the sustainable alternatives for local deliveries using electric Assist cargo bikes. The Municipality offers the use of 4 bikes leased from a fleet of different bikes owned by Manchester Bike Hire to any organization in Manchester.
Another opportunity to improve the last mile delivery are drones. Autonomous drones can significantly accelerate delivery times and reduce the human costs associated with the delivery.
Drone delivery (exploit technological advance) may reduce routing costs
Factors impacting success/benefit
Self-driving delivery robots deliver goods to the customer on a determined and controlled path. The customer must unload the robot receiving the ordered goods.
Fully autonomous delivery vehicles deliver the goods to the customer. The customer must unload the vehicle receiving the ordered goods.
The goods are transported in capsules moving within an underground pipeline system.
Reception boxes are fixed on the wall outside of the customers building. The box can be accessed by a key or an electronic code. This way of delivery gives the customer not only opportunity to receive a message as soon as the good is delivered, but to deliver goods anytime regardless of his presence. Plus, the boxes are temperature controlled which makes food delivery possible at any time (Iwan, Kijewska et al. 2016, p. 646).
Delivery boxes in contrast to reception boxes belong to the delivery company. The boxes are being filled at a distribution depot and are temporarily fixed on the customers outside wall of his home. Empty boxes or boxes containing returns are collected by the delivery company either at the delivery tour or an extra tour (Iwan, Kijewska et al. 2016, p. 646).
The delivery driver gets access to a locked area in which to place the good. The customer can access this area with a code, App or a key box. The delivery driver needs to deliver to less locations in comparison to home delivery. Moreover, the customer doesn’t need to be at home.
The goods are delivered to a collection / pick up point (nearest post office, convenience store, petrol station). When the good is delivered the customer gets informed that they can pick up their order. The goods are stored there until the customer picks them up. The possibility exists that the goods get delivered to the home of a customer, this must be arranged with the collection point / pick up point. Due to the lower density of delivery locations, the delivery process becomes more efficient. In this respect again, the customer does not need to be at home at time of the delivery (Iwan, Kijewska et al. 2016, p. 646).
Parcel lockers are all day and night accessible containers used to send and receive goods. They are groups of reception box units. The difference is that locker banks / parcel lockers are not installed in front of a house but sited in e.g. car parks, railway stations or apartment blocks. To access there is used an opening code that is sent to the customer as soon as the order is placed in the locker. It is possible that the customer is informed when the order is placed in the box. Plus, lockers can either be used by many or just one delivery company. The concept of locker banks / parcel lockers requires that the customer himself takes over the home delivery. To shape this process as positive as possible, the parcel lockers must be placed at strategically favourable (Iwan, Kijewska et al. 2016, p. 646).
Box (consolidate deliveries) delivery reduces routing costs
The idea of the micro hubs is to lower the number of motorized vehicles involved in the delivery process. Bigger amounts of goods are delivered to a micro hub (container, locker, area, …). The home delivery – the “Last mile” delivery – by motorized delivery cars is being replaced by CO2-free vehicles. This reduces e.g. illegal parking and traffic in inner cities. Furthermore, people without drivers’ licence can do LMD. To maximize the efficiency the location of the micro hubs must be strategically well chosen.
Crowdsourcing consists in outsourcing the LMD to “everyday” people (crowd). It is a ridesharing concept like Uber or Lyft but with goods instead of people (Castillo, Bell et al. 2018). Especially people who are often moving on a similar way for personal or working reasons could be part of the “crowd”. The concept includes that the transportation process has no negative environmental impact because the person taking the good would have done the ride anyways. Working with CSL is more of a risk than working with a full-time fleet because of the individual contracts of the drivers (Mangiaracina, Perego et al. 2019, p. 14).
The goods are delivered to the customers trunk as a mobile address and reception box. In order to collect the needed data, the customers car must be a smart car. For example, by tracking the parking routine of a customer by an app, the delivery company is able to optimize the route. After the customer gives time limited access to the car the delivery company, the courier can either deposit a parcel or retrieve a shipment for return. Trunk delivery makes deliveries closer to the supply location and reduces routing costs (postparcel.info).
Dynamic pricing means applying different prices to different delivery time windows. The delivery time gets defined while ordering goods. Depending on the optimisation of the delivery truck route, the price lowers. If the other delivery locations for example are close, the price is low, if not the price rises. This concept aims at an optimised delivery route (high customer density) to save costs and distance (Mangiaracina, Perego et al. 2019, p. 15).
Mapping customer behaviour is used to lower the number of failed deliveries. Data like electricity consumption are used to map the customers presence at home. Based on that a delivery schedule is defined that maximises the probability the customer is home (Mangiaracina, Perego et al. 2019, p. 15).
1. Size of the city:
Main difference of rural and urban areas is the population density. According to a study by McKinsey, within Germany 24 packages per person and year are ordered. As a result, the package density depends on the size of the city – the bigger the population density, the bigger the package density. Moreover, a study by Bundesnetzagentur shows that 2016 the largest number of packages got delivered in Berlin – the most populated city in Germany (bundesnetzagentur.de).
2. Local stores:
The number of ordered packages depends on the offer of local stores and the distance customers need to travel to get there. This is also related to the size of city and the location the customer lives
3. Age structure of the resident
The age structure of a city also influences the number of parcels and thus the parcel density. The following figure shows the percentage of online buyers in the different age groups:
based on de.statisia.com
Mobility
The aim is to promote the sustainable alternatives for local deliveries using electric Assist cargo bikes. The Municipality offers the use of 4 bikes leased from a fleet of different bikes owned by Manchester Bike Hire to any organization in Manchester.
Mobility
This measure is a concept that encapsulates the provision of a delivery service, where electric vehicles perform the final stage of the process. This thereby ensures that carbon-emission producing vehicles can be reduced in the most highly polluted area of a city.
Mobility
This Use Case aimed to find a feasible solution to reduce the delivery of goods by cars and trucks in the city centre. Several kinds of boxes and logistic systems were tested out in cooperation with delivery companies.
Mobility
This measure consists of offering companies and residents in Årsta district in Stockholm, the possibility to test e-cargo bikes for a limited period of time in order to find out whether, and to what extent, these vehicles provide a viable mobility option.
Mobility
The City of Stockholm and partners aim to tackle prejudices against EVs by inviting 20 business in the craft, delivery, and taxi sectors to try electric vans for one year. These businesses will be able to lease an electric van for the same cost as a fossil fuel-powered van.
Mobility
Within this measure, Madrid City Council cooperated with AVIA, a vehicle manufacturer, to develop a prototype of a 12-ton electric cargo vehicle adapted to the specific needs of Madrid’s urban delivery sector.
Mobility
The Use Case is to develop a partnership with logistic service providers and to set up a Concierge Service for the Domagkpark housing area in Munich.
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