THOUGHT LEADERSHIP: FIRST AND LAST MILE DELIVERY SOLUTIONS MITIGATE COST AND CO2 EMISSIONS IN URBAN AREAS

Published by Parcelly Team
 • 10 August 2022

One huge challenge transportation and logistics companies face today is making the last mile as efficient as possible. The last mile accounts for a large chunk of the total cost of delivery. There are various factors causing this, the most obvious ones being failed deliveries and inefficient routes. The cost of one failed delivery as reported by FreightWave is “$17.20, and 8% of all last-mile deliveries have a failure rate on their first delivery attempt”. Pick-up-and-drop-off locations, also referred to as PUDO in urban areas help to tackle these challenges head-on and already have a track record of providing improved efficiency for the last mile. 

This is showcased in the Sustainable Delivery Trial launched in March 2022 by the City of London Corporation, DHL, and Ford Pro to help cut carbon emissions in UK’s largest city. The trial was focused on deliveries from Billingsgate Market to commercial customers in the capital, including some of London’s most prestigious establishments. As reported by London Post, “the City Corporation identified the opportunity to combine some of the deliveries which avoids duplicating journeys and requires fewer vans". The success of the trial “revealed significant opportunities to benefit both business and the environment”.

In 2020, Accenture also developed a robust econometric model assessing the impact of local fulfilment centers for E-commerce using data from London, Chicago, and Sydney. Based on the analysis, “the last mile supply chain made possible by local fulfilment centers could lower last-mile emissions between 17 and 26% through 2025”. 

Looking at solutions to address both, operational efficiencies and environmental benefits, Supply & Demand Chain Executive (SDC) found out that “the last mile delivery segment has exploded in the last few years. In 2021, the global last mile delivery market stood at over $115 billion in size and is expected to cross $200 billion by 2025” - which also multiplies the given challenges for both retailers and carriers. The Whitepaper explains that “although, any end-to-end delivery has several legs in the entire supply chain, the last leg is the one with the highest number of variables and accounts for more than 50% of the entire delivery cost”. 50% of the delivery cost attributed to one leg of the delivery supply chain is of course significant. Nevertheless, according to SDC failed deliveries, insufficient routing, customer expectations and driver shortages are the most frequent reasons why last mile deliveries are costly. To overcome these limitations and reach the expected global market delivery growth in 2025, retailers need to start asking questions and looking for resolutions that can optimize their first and last mile delivery capabilities. 

 

Technology solutions are the light at the end of the tunnel. Smart and tech-enabled solutions offer to overcome the above limitations enhancing first and last mile deliveries operationally but also allow to reduce the environmental impact of failed deliveries from a sustainability perspective. “Technology solutions which assign orders dynamically save precious minutes and help to deliver many orders per day”, recognizes the SDC and the Sustainable Delivery Trial (London Post). There have also beenan estimated 37 percent reduction in CO2 emissions compared with business as usual, with 99 fewer vehicle journeys on central London’s congested roads resulting in 23,961 fewer kilometres driven overall”, alongside the reduced costs and improved efficiencies for participating businesses.  

Parcelly’s PUDO technology enables convenient parcel collection and drop-off points close to customer homes and transport hubs, which in effect, consolidates delivery journeys and reduces multiple delivery attempts. On the last mile, our services including Click & Collect and Leave-Safe drive operational efficiencies and account for an immediate environmental benefit. On the first mile, the platform powers return-drop-off and consolidation, but also allows carriers to utilize PUDO locations as Cross-Dock, shifting goods from e.g. petrol engine white vans to carbon neutral cargo-bikes. Finally, moving E-commerce stock as close to the customer as possible, reducing the complexity and distance of the last mile, our Hyper-Local Warehousing service powers some of the largest FMCG brands to operate localized Micro-fulfilment hubs or "Dark-stores". All of which are bundled in one single platform, easy to integrate through our enterprise API.  

In July 2021, Parcelly stated in its sustainability report, HOW PARCELLY’S PUDO TECHNOLOGY CAN SOLVE THE HOME DELIVERY SUSTAINABILITY CRISIS, that the future of E-commerce can and will be managed sustainably in the future, PUDO and Hyper-local fulfilment technology will be at the forefront of this drive to protect our climate. This is the case today as shown in the Sustainable Delivery trial. 

Logistics technology companies are providing solutions to amplify first and last mile operations, powering the new reality of retail and the future of urban logistics. Parcelly is already aboard the moving sustainability train. Join us so together we can deliver cheaper, faster, and greener. 




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