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In today’s Last Mile Brief, we bring you this piece by Last Mile Experts’ Grzegorz Krupa on how last mile logistics can be revolutionised on its path to sustainability.
The last mile delivery, which refers to the final leg of the supply chain, is a critical stage that connects businesses with their customers. While this phase presents numerous opportunities for e-commerce and on-demand services, it also poses significant challenges, particularly in terms of sustainability. The traditional model of last mile delivery has been associated with environmental degradation, congestion, and inefficiencies. However, as the world focuses on mitigating climate change and building a sustainable future, innovative approaches to last mile delivery are emerging.
Recent analysis conducted by the Clean Mobility Collective and Stand.earth Research Group reveals that major e-commerce companies, including Amazon, are set to emit CO2 equivalent to 44 coal plants annually. This highlights the sector’s heavy reliance on fossil fuels for package delivery, exacerbating climate change and contributing to increased cases of respiratory diseases due to air pollution. If current growth rates continue, greenhouse gas emissions are predicted to skyrocket by 2030. The study reveals that e-commerce delivery giants, such as Amazon, DHL eCommerce Solutions, UPS, FedEx, and Geopost, have not fulfilled their promises to deploy zero-emission vehicles and are withholding crucial data on last-mile emissions.
In light of these alarming findings, it is evident that the last mile delivery sector must undergo a sustainable transformation. Companies are increasingly recognising the urgency to reduce their carbon footprint and adopt sustainable practices. By prioritising sustainability in the last mile, businesses can not only contribute to combating climate change but also enhance their reputation, customer loyalty, and long-term profitability.
According to findings from Kantar, sustainability business models offer significant benefits for companies that genuinely prioritise sustainability. Kantar’s BrandZ database, which tracks 20,000 brands across 522 categories and in 51 markets worldwide, reveals that a company’s reputation around sustainability, driven by genuine action and investment, is becoming an increasingly important indicator of brand equity. Corporate reputation, including sustainability, explains about 10% of a brand’s value, making it a crucial aspect for businesses to consider.
Furthermore, Kantar’s analysis shows that businesses that integrate the ideas of relevant sustainable development goals (SDGs) into their business model perform better financially and are more resilient in times of crisis. These companies recover quicker once the dust settles. In fact, the analysis reveals that brands ranking highly in sustainability measures, both in the eyes of consumers and business buyers, experienced substantial growth, even outstripping the average of the world’s top 100 brands in 2022 compared to 2021.
These findings demonstrate that adopting sustainable practices in the last mile delivery sector not only aligns with environmental responsibility but also presents financial advantages. Businesses that understand their responsibilities, take genuine action, and are seen to act on sustainability can reap significant benefits, both in terms of financial performance and brand reputation.
The traditional last mile delivery model heavily relies on fossil fuel-powered vehicles, contributing to air pollution, carbon emissions, and traffic congestion. This approach is not only detrimental to the environment but also economically unsustainable in the long run. The need for change is evident, and companies are increasingly recognising the urgency to reduce their carbon footprint and adopt sustainable practices.
One key strategy to enhance sustainability in last mile delivery is optimising delivery routes. This involves leveraging advanced algorithms and data analytics to identify the most efficient routes, reducing the distance travelled and the number of vehicles required. By adopting route optimisation software, companies can significantly minimise fuel consumption, greenhouse gas emissions, and delivery costs while improving overall operational efficiency.
Replacing conventional delivery vehicles with alternative fuel or electric-powered ones is a game-changer in achieving sustainable last mile delivery. Electric vehicles (EVs) produce zero tailpipe emissions and have lower maintenance costs. Furthermore, with the rapid expansion of charging infrastructure, the adoption of EVs has become increasingly feasible. Companies like Amazon, UPS, and DHL are already incorporating electric vehicles into their fleets, setting an example for others to follow. Additionally, exploring alternative fuels such as hydrogen and biofuels can provide additional options for greener last mile transportation.
Micro-consolidation and delivery hubs are emerging as effective strategies for reducing congestion and optimising last mile delivery. By consolidating shipments from multiple suppliers into a single hub, companies can achieve economies of scale and reduce the number of individual trips made by delivery vehicles. These hubs, strategically located in urban areas, enable efficient distribution and facilitate the use of sustainable modes of transport, such as bicycles and electric cargo bikes, for the final mile delivery.
Crowdshipping, a concept that involves utilising unused space in private vehicles or engaging individuals as independent couriers, is gaining traction in the quest for sustainable last mile delivery. Peer-to-peer networks and mobile apps connect senders with people heading in the same direction, allowing them to deliver parcels en route to their destination. By leveraging existing transportation capacity, crowdshipping minimises the number of dedicated delivery vehicles on the road, thus reducing emissions and improving overall efficiency.
The advent of drone technology and autonomous vehicles has the potential to revolutionise last mile delivery. Drones can efficiently deliver small packages over short distances, reducing the need for traditional vehicles in congested areas. Autonomous vehicles, whether ground-based or aerial, offer the possibility of cost-effective, energy-efficient, and emission-free delivery operations. However, there are still regulatory and safety challenges to overcome before widespread adoption becomes a reality.
Collaboration and partnerships among various stakeholders, including retailers, logistics providers, governments, and urban planners, are crucial for sustainable last mile delivery. By working together, these entities can share resources, knowledge, and infrastructure to optimise operations, reduce duplication, and minimise environmental impact. Public-private partnerships can also foster the development of sustainable transportation infrastructure, such as dedicated cycling lanes, charging stations, and micro-consolidation centres.
The findings from Kantar, which highlight the financial benefits of prioritising sustainability in the last mile delivery sector, underscore the critical need for sustainable last mile delivery solutions. By genuinely integrating sustainability into their business models and taking concrete actions, companies can enhance their brand reputation, customer loyalty, and long-term profitability. Beyond the ethical imperative to combat climate change, sustainable last mile delivery practices align with the demands of consumers and business buyers, contributing to overall financial resilience and growth. It is clear that businesses that prioritise sustainability are better positioned to thrive in the face of challenges and uncertainty.
To fulfil this imperative, major e-commerce companies and logistics providers must fulfil their commitments to deploy zero-emission vehicles and disclose accurate data on last-mile emissions. By implementing strategies such as route optimisation, alternative fuel and electric vehicles, micro-consolidation, crowdshipping, and embracing emerging technologies like drones and autonomous vehicles, companies can significantly reduce their carbon footprint and contribute to a more sustainable future.
Collaboration and partnerships among various stakeholders are crucial for driving this transformation. By working together, businesses, governments, and urban planners can create a last mile delivery ecosystem that balances the convenience of e-commerce with environmental responsibility. Through collective efforts, we can mitigate climate change, improve air quality, and create a better world for future generations. By embracing sustainable transformation in the last mile, companies not only drive positive change but also secure their own success in the process. Together, let us build a sustainable last mile delivery system that delivers convenience while preserving our planet.
The annual Green Last Mile Europe report by Last Mile Experts is an important initiative that supports the aforementioned conclusion by sharing knowledge and insights from various stakeholders. This report serves as a platform for collaboration, enabling the exchange of best practices and innovative ideas in sustainable last mile delivery. With each edition, the report aims to gather even more participation and engagement from major players in the industry. It is our hope that in the next edition, many more influential companies will join this project, contributing their expertise and experiences to drive positive change in the last mile delivery sector.
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Photo: Biontologist, CC BY-SA 4.0, via Wikimedia Commons