The unexpected happened to last mile delivery
March 31, 2021
The last year has been so tough for so many, we naturally look for silver linings where we can find them. And the carbon footprint of last-mile deliveries might just be one such place.
Because something interesting and unexpected has happened to the last mile this last year. It has gotten greener.
With everyone forced to do so much more of their shopping online, retailers, delivery organisations, and consumers have all adapted quickly to new kinds of fulfilment, delivery and pickup options.
Stores have been repurposed as micro-fulfilment centres, placing inventory closer to customers for delivery companies, whilst also making customer pickups from curbside and stores more popular. And, especially relevant for posts, drop densities have increased with more people ordering from home.
Sustaining the sustainable last mile
The effect of these changes has been to reduce the carbon emissions associated with last mile deliveries. But now that we’ve had this unplanned and unexpected sustainability boost, the question turns to what happens next.
Accenture recently carried out research that shows, for example, that the greater use of local fulfilment centres could cut last-mile emissions in cities by as much as 26 percent through 2025—and that’s just one of the options on the table.
At the same time, however, the World Economic Forum has forecast that, without intervention, we can expect a 32 percent rise in carbon emissions from urban delivery traffic by 2030.[1]
So we can’t take anything for granted. It’s going to take sustained effort from the whole delivery ecosystem to make sure this more sustainable last mile endures.
Post and parcel organisations will need to lead with impact in that process. There are three areas in particular to act on.
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The sustainable last mile
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#1 Help create the right incentives
When asked, 43% of consumers said they were more likely to choose retailers that provide sustainable delivery options.[2] The problem is that those options are rarely offered or, at least, made transparent.
If postal and parcel companies develop the capabilities to accurately measure/predict the carbon emissions of each individual delivery run, and then supply this data to retailers, there are some really interesting possibilities for helping consumers make greener choices about their deliveries.
It could, for example, mean we have something like a “calorie counter” for the carbon emissions associated with each delivery option for each online purchase. And that could have a big impact on all of us. Players with greener models could see more volumes come their way.
When consumers can see the environmental impact of, say, getting multiple individual deliveries or bundling them into one, they’re much better informed about the consequences of each option—and nudged to make a greener choice.
Postal and parcel organisations have a key opportunity to lead the way in incentivising more sustainable deliveries. First and foremost, this will come down to the provision of more low-carbon delivery options—including electric delivery fleets and purpose-built last-mile vehicles-and communicating the positive impact this will have.
#2 Rethink how assets are used and shared
One of the benefits of micro-fulfilment is that post and parcel companies have more options when it comes to vehicle choice. Smaller vehicles, electric vehicles, even electric tuk-tuks or rickshaws all become more feasible—and will reduce carbon footprints.
There’s also a big opportunity to share assets between delivery organisations and municipalities. You might, for example, have a shared fulfilment centre, a shared dark store, shared pickup and drop-off lockers, and so on.
Think of it like an ATM. You don’t necessarily care whose machine you’re using to get your money; you just trust the banks to work it all out behind the scenes. Delivery and pickup infrastructure could work in the same way.
Another interesting idea is for cities and delivery organisations to work together on partitioning territories between different carriers. So, you might have a situation where a city divides its area into, say, three sections and then have a single carrier manage all deliveries in each one.
Let’s not pretend this is an easy option. It would need careful negotiation between all parties to agree exactly how assets, geographical areas, revenues, and responsibilities are shared or partitioned. But the carbon impact could be huge.
#3 Make better use of data
Data is so important to sustainability because when you have visibility into where people, assets and parcels are at any one time, you can plan and execute deliveries and pickups so much more effectively - reducing waiting times, optimising routes, consolidating deliveries, increasing productivity and lessening the environmental impact.
Good data also means you can make better forecasts about anticipated volumes. It means you can find the right balance between having enough assets and drivers to ensure a good customer experience without creating excess capacity.
And when it comes to the deliveries themselves, our research shows that when data is used for intelligent route optimisation and applied with local fulfilment, delivery vehicles drive 140 million kilometers less. With more data, delivery companies can make routes more efficient, resulting in happier customers and a greener last mile.
Thinking outside the (delivery) box
To sustain last mile sustainability, all of us in the delivery ecosystem must work together to make it happen. Posts have a significant role to play in leading this effort.
The good news is that we at Accenture have been helping numerous organisations and municipalities model exactly these kinds of sustainable last-mile scenarios. We’ve also just published a new point of view which dives into the detail of all of the above.
Get in touch if you’d like to find out more about how we can help to create an enduring sustainable last mile for your organisation.
[1] World Economic Forum, “The Future of the Last-Mile Ecosystem,” January 2020 at https://www.weforum.org/reports/the-future-of-the-last-mile-ecosystem.
[2] Thomas Barrett, “Consumers More Likely to Shop Somewhere with Sustainable Delivery,” April 24, 2019 at https://airqualitynews.com/2019/04/24/consumers-more-likely-to-shop-somewhere-with-green-delivery-options/.
