How cities can help supply chains perfect the last mile
Urban freight is expected to increase 40% by 2050, going hand-in-hand with the slew of retail stores closing due to e-commerce growth. That means more trucks on the road, clogging precious residential and downtown street space while making deliveries. “Where you now see UPS and FedEx trucks in neighborhood once a day, you will see them four to five times a day, plus the smaller players,” says Andre Pharand, Accenture’s global management consulting lead for the postal and parcel industry.
While trucks were only 7% of urban travel in 2015, they accounted for 18% of the congestion, according to the 2015 Urban Mobility Scorecard. And that doesn’t include other delivery vehicles, like vans or those delivering in personal cars.
What can and should cities be doing to address the congestion and ecological issues brought on by last-mile delivery?
Developing master plans
Urban planning is essential to a smoother infrastructure for everyone on the road, and everyone receiving deliveries. Most of this planning activity and thinking is happening in Europe, says Pharand, but some US cities are proactively looking into options as well.
Since it’s easier to regulate new construction, a city could mandate the creation of extra loading zones, docks, or even package rooms in buildings, for example.
That way, a delivery person doesn’t have to go to each residence or office suite.
But forward-looking master plans can be a combination of cities posting new regulations, while encouraging vehicle sharing and greener trucks. Here’s what three cities are doing:
New York City – NYC is developing a Smart Truck Management Plan, with upcoming public workshops in each borough to help improve truck route usage and compliance, as well as the movement of goods. In 2010, the city conducted a pilot off-hours delivery experiment, with 20 companies agreeing to shift delivery windows to 7 p.m. to 6 a.m. This resulted in more deliveries in the same amount of time, better customer relationships, fuel savings and easier access to legal parking. The downside is increased noise during nighttime hours within residential areas.
Seattle – Created in 2016, the Urban Freight Lab is looking into “high-impact, low-cost solutions for businesses delivering goods in urban settings and cities trying to manage limited curb and parking space where delivery trucks, bicycles, pedestrians and cars all need to coexist.” The lab is a collaboration between the University of Washington Supply Chain Transportation and Logistics Center, Seattle Department of Transportation, Costco, Nordstrom and UPS. They’ll be testing solutions like centralized drop-off lockers, and improved management of alleys and curb space, both in simulations and the real world.
Barcelona – The Spanish city is creating superblocks to decrease traffic and noise in certain neighborhoods. Regular traffic will be routed around this area, while only local traffic will be allowed into the superblock area. The superblocks will have lower speed limits, pedestrian and cycle lanes. They are planning for 10 superblocks in all. This will impact local deliveries, as delivery vehicles won’t be allowed in.
Efforts to increase air quality
Truck congestion is a burden, but too much traffic also affects air quality. As a result, improving air quality is often a goal in cities’ last mile planning process.
European cities have created about 200 low emission zones. London has had them since 2008, and is planning to create an ultra low emission zone in 2019, to improve air quality. Cities like Paris, Athens and Madrid plan to ban diesel vehicles from their downtowns by 2025.
"Where you now see UPS and FedEx trucks in neighborhood once a day, you will see them four to five times a day." Andre Pharand, Global Management Consulting Lead, Postal and Parcel Industry, Accenture.
It’s estimated that 25% of carbon dioxide emissions and 30-50% of other pollutants are caused by urban freight transported by diesel-powered trucks.
One solution is transferring freight outside the city from a diesel vehicle to a cleaner-powered one.
Some cities are imposing delivery time slots for parcels. This was common, said Pharand, for restaurant and supermarket deliveries, but is more difficult for carriers going to residences. "They want to deliver when people are home, in the afternoon and early evening,” he said. “That’s a challenge.”
Encouraging alternative vehicles
Cities mandating the use of alternative vehicles is one option, though perhaps less efficient because it involves carrying fewer and sometimes smaller parcels.
While bike messengers are not a new concept, legacy carriers like DHL and UPS developed specialized bicycles to transport packages.
With diesel vehicles under attack, electric vehicles are an option. They can be smaller than the big delivery trucks, but still have an opening in the back. By decreasing the vehicle size, it will make it easier for them to maneuver on narrow streets, and will have less impact on the environment. If electric vehicles are to become more important in last-mile deliveries, though, cities will need to make investments in charging facilities.
Tweaking existing infrastructure
There’s no need to reinvent the wheel — existing infrastructure can be tweaked for better urban logistics.
Cities and companies can convert underutilized parking structures and vacant big-box stores or shopping centers into warehouse and fulfillment spaces. With more stored in cities, fewer delivery trucks could make the rounds.
Retailers currently using a “just in time” approach to stock products could stock greater quantities, storing them in their own retail or warehouse space to decrease the need for frequent shipments.
Carriers can rely more on green shipping options. Paris is using their river to carry heavy products downtown, says Pharand. Passenger trains, too, could bring some goods from the outskirts of a city, downtown.
In an ideal world, one vehicle would deliver all goods to one address. “That’s what cities are aspiring to,” said Pharand.
Much like the mail used to all be delivered to a post office box at a central location, local delivery hubs are being tested in various cities. Called “click and collect,” these lockers, stores or other pick-up spots could mean less truck traffic on the streets. They eliminate multiple delivery attempts, and people could stop by on foot, bike, or on their way to and from work.
That consolidation could mean combining deliveries from numerous carriers, which of course creates some issues. The challenge is deciding which carrier will make the deliveries and how that contract is awarded. Another challenge is deciding who is responsible for breakage or loss when it’s in custodial control.
Regardless, if the last mile is to be perfected, city planners, carriers and retailers must do their part to work together. Many already are.