Green Last Mile Europe Report reveals benefits of out-of-home delivery, fleet upgrades and crowdshipping

The latest edition of the “Green Last Mile Europe Report 2024" finds that while greenwashing is evident, fleet renewals, out-of-home delivery growth, technological advances and consumer purchasing preferences are contributing to a more sustainable last mile sector.

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Last Mile Experts’ latest “Green Last Mile Europe Report” has shed more light on the extent to which last mile delivery companies are making strides with their decarbonisation efforts.

The report notes that last-mile delivery accounts for 40% of all e-commerce emissions, something that’s partly down to inefficient and traditional delivery methods.

In addition to this, the Last Mile Experts report stresses that despite widespread claims of green policies by logistics stakeholders, there remains a “pervasive issue of greenwashing” that is overstating sustainable business actions.

However, on a positive note, the report also states that some companies have shown genuine commitment by integrating more sustainable practices, such as increasing the use of lockers, PUDOs or eco-friendly vehicles. With regards to the latter, research suggests that where efficient and dense OOH networks are in place, shifting parcels to nearby parcel lockers or PUDOs could cut CO2 emissions substantially.

Finally, the authors of the report also believe that it is important to explore how the sharing economy can promote a greener approach in last-mile delivery.

Key Trends in sustainable last mile delivery

Electrification and low-emission Vehicles

When it comes to investment in zero-emission and low-emission vehicles, the report states that DHL eCommerce in the Netherlands has already achieved 80% fossil-free last mile deliveries using electric vans. The company increased its electric vehicle fleet by 700 in 2023 and also utilised HVO biofuel to reduce emissions from its diesel vehicles.

Meanwhile, Finnish parcel and postal delivery operator Posti has successfully converted one of their diesel trucks to electric, which it believes to be a cost-effective solution that will encourage other players to follow suit. According to Posti, The cost of converting a truck is currently roughly half the price of a new electric truck, with further cost efficiency gains expected once conversions enter mass production.

GeoPost has also set ambitious goals for achieving net zero by 2040, with significant greenhouse gas (GHG) emission reductions planned by 2030 and 2040. In order to meet these targets, the company has invested in upgrading its fleet with zero-emission vehicles. Last year, GeoPost says 126 cities were already fully delivered with low-emission alternatives, with the deployment of 2,533 new low-emission vehicles expected this year.

Shared infrastructure and collaboration

As regards last mile infrastructure, the report proposes that Implementing shared parcel lockers and joint transport organisation among courier, express, and parcel (CEP) providers would enhance coverage and reduce waste.

Moreover, it is stated that the sharing economy, though challenging, aligns well with environmental goals by promoting efficient and collective use of resources.

For example, the authors of the report argue that the implementation of shared parcel lockers open to all courier companies “would be far better than the current unhealthy situation in which several carriers are running sub-optimal networks alongside each other”.

Out-of-home (OOH) delivery options

As in previous editions of this report, the report highlights that OOH delivery, including parcel lockers and pick-up/drop-off points (PUDOs), significantly reduce carbon emissions by consolidating vehicle deliveries and increasing delivery efficiency.

Evri’s initiative to divert parcels to ParcelShops and lockers before the final-mile journey is a prime example, reducing the carbon footprint by 45% on average. Vinted Go also found that its deliveries to PUDO points displayed a much lower footprint (1.1 kg CO2e) compared to home deliveries (1.77 kg CO2e). In addition to this, research from SwipBox Kontaktfri found that when SwipBox lockers are located in close proximity to end-users and 12 parcels are delivered per stop (versus a typical number of just over 1 for home delivery), the potential savings could reach 63%, while with 24 parcels, the savings could increase up to 82%.

Consumer behaviour and education

Another finding in the report is that there is a noticeable contingent of consumers whose preferences are shifting towards more sustainable delivery options.

In Poland, the vast majority of respondents in a 2023 survey indicated parcel machine delivery as the most eco-friendly option.

“Research shows that almost 80% of customers choose eco delivery when they have the option. However, there is a small but very important detail here. The condition for such a choice is that they will not have to pay more for such eco-delivery,” states the report, referring to research on Polish consumers.

Technological Innovations

On the theme of technological enhancement, the report concludes that advanced technologies like autonomous delivery systems, en-route manufacturing, and robotic stores on wheels are expected to transform last-mile logistics.

“We don’t anticipate Boston Dynamics type ‘humanoid’ robots able to operate at scale, nor the use of Starship or Cainiao type street accessible deliveries. However, we do see an opportunity for autonomous last mile vans which will potentially be non-fossil fueled and use efficient routing to deliver a ‘non driving’ courier to a convenient place to make deliveries or collections and then waiting for him/her at a convenient and safe location, or driving back to an optimal pick up location when the courier is ready,” reads the report.

However, widespread adoption of these technologies is expected to take some time due to regulatory and safety concerns:

“The main challenges and obstacles with autonomous robotic delivery continue to include safety concerns, the need for regulations, lack of public acceptance, high initial and ongoing costs, and limited range.”

Addressing greenwashing

Finally, the report does not shy away from the topic of ‘greenwashing’ whereby companies claim to be sustainable without substantial actions to back these claims.

“Last mile delivery and packaging are responsible for some 40% of all e-commerce emissions and, unfortunately, as was the case last year, despite continued communication activities by many stakeholders regarding their green policies, our feeling is that unfortunately much of this is ‘greenwashing’ and that few players, especially amongst carriers, are really making headway in creating a green last mile,” states the report.

To address this problem, it is said that genuine and transparent sustainability practices are necessary to avoid this pitfall and gain consumer trust.

Moreover, the report adds that legislation such as the CSRD (Corporate Sustainability Reporting Directive), means that greenwashing practices will be treated similarly to falsification of financial statements. Therefore, e-commerce companies and other businesses guilty of greenwashing practices will increasingly risk exposure.

Future outlook

Besides the technological innovations referred to earlier, the report highlights the potential for the spread of so-called “crowdshipping”, which can bring benefits such as “cost- saving, environmental friendliness, and trust”.

The system, exemplified by Amazon Flex, utilises existing trips and transport modes to bring about some of these benefits.

Finally, the report concludes that changing consumer preferences, along with technological advantages will ultimately combine to foster a greener last mile in the years to come:

“As climate change becomes more evident consumers will become increasingly aware of the environmental impact of their actions. Moreover, technology may be expected to offer new alternatives and sustainable delivery options are likely to become more popular and sought after.”