E-commerce has recently witnessed explosive growth, with the e-commerce logistics market increasing worldwide by 27 per cent year-on-year in 2020 and online sales in the UK rising by 46 per cent in the same period. Home shoppers are demanding more deliveries than ever, with growing expectations for fast fulfilment times and a personalised service.
While this surge in home deliveries is good news for retailers and their delivery and fulfilment partners, the extra vehicles needed to satisfy the increased demand from e-commerce will have to be carefully managed if they are not to cause further congestion in urban areas, worsen air quality and increase operational costs.
Using data to reduce congestion in the last mile
As demand for home deliveries grows, adaptive, data-driven innovation focused on the smart city’s last mile has the potential to reduce congestion in built-up areas. Urbanisation is increasing and, as more people move into urban areas, congestion is also on the rise. Since 2010, urban congestion has increased by 20-35 per cent and that risks becoming even worse if measures aren’t taken to deal with the fact that 60% of the global population will be living in cities by 2030.
One way to reduce levels of local traffic is for retailers and grocers to convert their stores into online order fulfilment centres. The inventory and resources already exist within the stores’ operations, so operations just need to be expanded to include fulfilling online retail orders via delivery or click and collect.
Another option for tackling vehicle congestion is arranging delivery during the night or early morning when the amount of traffic is typically well below its normal level. It’s also easier for businesses to replenish inventories and move goods between stores, micro fulfilment centres and warehouses during this time.
A further method business can use to minimise the impact of their operations on local traffic is through the use of bikes, scooters, e-bikes and motorcycles to complete last-mile fulfilment, thereby reducing carbon emissions and speeding up delivery. In fact, the latest delivery and fulfilment technology will even suggest deliveries be made on foot in areas where that is possible.
To create a range of automated and optimised delivery operations, data from across the business needs to be extracted and exploited. For example, data can be used to decide the most efficient vehicles for certain deliveries or which stores should be used to shorten the last mile. The sheer amount of data available means that a delivery orchestration platform is needed to connect supply chains, and automate delivery and fulfilment for maximum operational efficiency.
Ultimately, these platforms lead to better decision making, leaner operations and improved customer experience.
Optimising last-mile routes to reduce carbon emissions
Aside from improving operational efficiency, the latest delivery and fulfilment technology can also help retailers and logistics companies to improve sustainability.
According to new research from Forrester among more than 200 order fulfilment and delivery logistics decision-makers at retail companies in Europe and North America, a third of respondents expect logistics partners to use technology to optimise routes, increase driver efficiency and share data in real time. In addition, almost 60% of those surveyed plan to implement or expand their organisation’s investments in technology to reduce their last-mile emissions.
Retailers are investing in technology and green vehicles to reduce carbon emissions and improve their sustainability performance, but logistics providers need to help retailers manage their sustainability efforts by providing regular reporting and visibility into data, and support with customer communications. Retailers should define clear benchmarks and metrics to ensure a common understanding within the ecosystem of what to track, measure and communicate.
Providing customers with transparent and accurate data allows retailers to communicate the impact of their green delivery choices to their customers. Logistics firms need to use technology to reduce carbon emissions and provide retailers with advanced, real-time emissions data.
Smart cities need to grasp the last-mile nettle
Today’s cities are facing several challenges from the retail and delivery sector: changing consumer behaviour linked to the COVID-19 pandemic and a huge uptake in e-commerce; retailers losing face-to-face contact with their customers; increasing urbanisation; and a rise in urban traffic and related environmental issues, such as carbon emissions.
Smart cities need to address these developments as a matter of urgency. Regulatory intervention is one option, but leading last-mile technology might be an easier way to reduce congestion and improve inhabitants’ quality of life.
To establish successful last-mile delivery operations, businesses need to ensure that they choose the delivery model that is right for their organisation, but also optimise delivery flows to provide the ideal customer experience while minimising the environmental impact of those operations.