In this series of blog posts I’ve examined the ongoing reinvention of post and parcels. First, I looked at the accelerated shift toward same-day delivery. Then, I explored the shortened supply chains and rising focus on the sustainable "last mile." In this third blog, I’ll expand on sustainability. I will view it from the lens of urban congestion and the post and parcel industry. Moreover, I will detail some ways in which we can reduce urban traffic. 

The United Nations Global Compact-Accenture CEO Study on Sustainability offers a candid look at the perspectives of more than 1,230 CEOs across 113 countries and 21 industries on the urgent opportunities and challenges for leaders to address the climate crisis. It outlines the acute concern that private-sector C-suite leaders have for the environment and details the extreme necessity to take more immediate action against climate change.  

Needless to say, we are all aware of the need to take action. But that can be daunting when your organization is responsible for getting millions of parcels to their final destination.  

Numerous reports point to continued e-commerce growth post-pandemic, and in response so will delivery volumes and traffic. It’s imperative that we examine the environmental impact of the post and parcels industry. For this blog post, I analyzed our research on the sustainable last mile. I zeroed in on five parcel delivery models. We mapped the impact congestion would have in three major cities. We estimated the number of vehicles that would be needed in 2026 in each city. The findings could be game-changing for the industry and our planet. 

Mapping delivery models

Before I discuss the findings, let me briefly describe the five delivery models in our analysis: 

  1. Door-to-door delivery: it is the most widely used model. Delivering to households using trucks or vans. Traditional operators pass every household to drop off items. Large logistics companies will only visit those areas where they have deliveries.  
  2. On demand: used for services such as takeaway food deliveries. It uses a single dedicated trip to deliver to a specific household.  
  3. Parcel lockers - open network: items are delivered to automated parcel machines with a fixed number of locker compartments. Lockers can be used by any number of public and private carriers. 
  4. Parcel lockers - closed network: A network of postal lockers used exclusively by one carrier brand.  
  5. Parcel lockers - smart box open network: A more advanced form of open network. Lockers use smart terminals with automated internal sorting to increase the use of space and maximize inventory. 
Comparing the impact of delivery models

The analysis of delivery models on vehicle numbers can provide valuable insights. Carriers can harvest data to optimize delivery fleets. City planners can develop urban infrastructure that’s resident-focused and sustainable. In the process, it will reduce urban center congestion 

Before the pandemic, online deliveries were reported to be bringing “chaos” to New York City’s streets. There’s worldwide concern about the effects of congestion on carbon emissions and air quality. There are initiatives already in place aiming to limit traffic congestion. In London there’s the Congestion Charge Zone and Ultra Low Emissions Zone (ULEZ). Los Angeles has launched the Green New Deal. 

Our goal was to measure the different delivery models’ impact on congestion. To do this, we first took the growth of e-commerce from 2020 through 2026 for three citiesNew York, London and Beijing. We then simulated the impact of each model on the number of vehicles on the roads in 2026. What was our top-line finding? Vehicle numbers would double if we kept the dominant door-to-door delivery model (see Figure 1). 

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Figure 1: The impact of delivery models on the number of urban delivery vehicles between 2020 to 2026.

Sources: Annual Accenture Postal and Parcel Industry Analysis, 2021

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Our results for the other models are equally striking. The worst option in terms of congestion is on-demand delivery. It would see vehicle numbers explode. But it’s the findings on the different types of locker networks that are the most interesting.  

An open network of parcel lockers helps reduce vehicle numbers. It is much more effective than closed parcel locker networks. The best solution? Smart box open networks. It would reduce vehicles more than any other model. Figure 1 summarizes the overall impact of the various models on vehicle numbers and congestion.    

Are parcel lockers the solution?

Parcel lockers may be part of the answer to the problem of traffic congestion. Our research finds that open parcel lockers help reduce vehicle traffic because lockers help increase ‘drop density’. Drop density is the number of items delivered per stop. An open network also means that the locker is used by several delivery companies and generally has a higher utilization rate i.e. more lockers are occupied. Consumers only need to go to one parcel locker for all their parcels delivered on the same day.  

Closed parcel lockers counterintuitively do not lower traffic congestion. A closed parcel locker likely will not have the same drop density, and the delivery vehicle will have to cover more parcel lockers and more distance to deliver the same amount of parcels. Closed network parcel lockers are not as fully utilized because parcels are fragmented across multiple carriers. A consumer may also need to visit more than one closed parcel locker to retrieve all their packages, generating more traffic.  

In general, lockers work in densely populated inner-city areas where out-of-home delivery is the standard and in convenient locations for residents. Keep in mind, lockers are expensive to install and run. You must consider rent and there are hardware, software and maintenance costs. Recipients may wait a few days before picking up items, meaning more lockers may be needed to compensate for occupied compartments and for variable daily volumes of e-commerce. And finally, let’s face it—recipients prefer home delivery, if that is an option. The message is clear. Parcel lockers are a more sustainable solution than home delivery, but the type of parcel locker network determines how sustainable.  

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Figure 2:  Delivery location used by recipients.

Source: IPC 2020

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Smart box open networks help address many of these issues. They simply generate far less congestion than closed networks (see Figure 3). Take New York City. Our simulation found that a closed locker network model required 300,000 terminals. An open locker network—83,000. The smart box open network: just 29,000. There are also dramatic differences in the number of delivery vehicles required. From a sustainability and congestion perspective, smart boxes could be the future of urban delivery. 

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Figure 3: The impact of different out-of-home locker models in New York City in 2026.

Source: Annual Accenture Postal & Parcel Industry Analysis, 2021

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New approaches emerge as cities tackle congestion

With initiatives like London’s Congestion Charge Zone, the future is already here. It’s clear that the post and parcel industry needs to support efforts to reduce congestion. City authorities may compel them to do so, as sustainability targets gain momentum. Options discussed among industry specialists include creating licensed monopolies. In them, one operator handles deliveries for all carriers in a particular area.  

Post and parcel operators worldwide are increasingly using alternatives to door-to-door delivery. Out-of-home delivery to pick-up and drop-off locations—such as local shops and service points—is an option. The overall message? Post and parcel operators have a significant opportunity to promote more sustainable operations while also responding to changing demands from customers. 

What's next?

In my next blog post, I’ll examine a new game-changer in post and parcels. An innovation that will reshape the future: autonomous vehicles.  

Andre Pharand

Managing Director – Consulting, Post and Parcel Lead

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