With the surge in e-commerce, global carbon emissions are also on the rise making sustainable, efficient and responsive urban logistics a need of the hour.
According to a recent study by Rakuten Intelligence, the average domestic package travels over 1,000 miles before arriving at its destination. This is astonishing considering the fact that the same item may be available at a retail location just a few miles away from the customer.
Speed is the new fuel for the last mile delivery industry. The growing appetite for quicker or same-day delivery is causing a lot of pressure on the overall delivery supply chain. Often these deliveries are realized at sub-optimal utilization of resources. A majority of customers are unaware that faster delivery causes more emissions and so are not always opting for the most efficient delivery method.
Sustainable last mile deliveries could pave the way for greener logistics.
The modern-day customers are super conscious about the environment and want to go green! Studies reveal that 85% of customers would prefer to wait longer for a delivery if it meant that there were less emissions and congestion as a result. But there is no proper awareness.
Consumers want to reduce their carbon footprint and are actively seeking and identifying with brands that are doing the same. Almost 69% of consumers have stated that they would be more likely to buy from a brand that is committed to sustainable practices.
- Efficient Route Optimization
- Zero-emission Fleet
- Era of Hyperlocal
- Incentive for Green Delivery
- Return Shipment Strategy
1) Efficient Route Optimization
Route optimization is an integral part of a successful last mile delivery management system. Ensuring efficiency in route planning can be a great strategy to reduce fuel bills and become more eco-friendly. More efficient routes mean fewer miles driven, less time on the road. This also keeps your equipment performance in great shape.
Technology plays a great role here. Advanced route optimization softwares use sophisticated algorithms for route planning that cut down unnecessary fuel usage. Efficient route planning on multi-stop delivery trips ensure less time is wasted on the road, the equipment functions optimally, your fuel emissions and costs reduce significantly, road congestion eases off – all this leads to great monetary savings.
A great example here is Farmstead, an online grocer, that launched weekly Sustainable Routes to reduce the amount of vehicles on the road, reducing carbon emissions and delivery costs. The savings are passed on to customers in the form of lower prices and free delivery.
2) Zero-emission Fleet
Climate change is for real and perhaps the biggest threat facing our time. Urban logistics is a key contributor to the growing greenhouse gases causing environmental pollution.
Taking a step towards the goal of Zero Emission Urban Logistics by 2025, companies across the globe have started offering electric or hybrid fleet to ensure last mile deliveries. For example, CitySprint runs an electric fleet in London for same-day deliveries. Their zero-emission fleet offering includes pushbikes, cargo bikes, and electric and hydrogen vans, each saving tonnes of CGH emissions every year.
DHL’s Cubicycle is another example. Designed as a containerized bicycle, this four-wheeled cargo bicycle operates on a pedal system and can carry a load of up to 125kg. Powered entirely by solar panels, the zero-emissions Cubicycle is equipped with big data transmitters to provide both customers and drivers with real-time data on their deliveries. It can also travel up to 50km per day.
Having said that, technology is shaping the future of last-mile delivery in ways unimagined.
Take the example of Project Wing by Google that aims to be an autonomous drone delivery service that can deliver anything from fresh produce to emergency medical supplies within a 14km round-trip distance.
In London, eco-friendly artificial intelligence (AI) robots are changing the face of food delivery by serving customers piping hot food via zero-emission electric robots. These food delivery robots can travel up to four miles per hour while taking on loads of up to 10kg.
This is just the tip of the iceberg. Considering the disruption happening in this space, zero-emission fleet is here to stay and for better!!
3) Era of Hyperlocal
A localized experience in the last mile delivery logistics industry is a new trend catching up. Deliver from store model seems to be getting popular in the age of millennials, especially in the grocery and retail sector.
The USP of hyperlocal e-commerce businesses lies in their ability to deliver products and services at lightning speed. There are several other benefits too – lower inventory, reduced transport costs and volume of successful deliveries.
Research by Yourstory reveals that hyperlocal marketplace startups have managed to raise $170 million from investors and continues to attract funds. A recent report by EY and the Indian Private Equity & Venture Capital Association (IVCA) says the private equity (PE)/VC interest in hyperlocal delivery was revived with Google’s undisclosed investment in Dunzo. For Internet giant Google, Bengaluru-based Dunzo is its first direct investment in an Indian startup.
Following Dunzo’s footsteps, Swiggy recently launched its hyperlocal delivery service, Swiggy Go, which allows users to outsource their delivery needs within a city. With renewed interest in the hyperlocal logistics space, companies that are able to minimize the human inefficiency in delivery and reduce customer churn rate will walk away with a competitive edge and market share to kill.
Going hyperlocal with a zero-emission fleet network is a strategy worth considering for companies looking to shift towards greener delivery logistics.
4) Incentive for Green Delivery
It is possible to make a good profit while running green and lean logistics operations, in fact, it has become the standard in many industries to measure and reduce their carbon footprint.
However, achieving a successful green last mile delivery is not an easy task. There are several factors that must be taken care of – choosing the right fleet for the job, planning the most efficient delivery route, selecting the right packaging, ensuring the customer is happy with the delivery, all this while ensuring the impact on ecology is minimal.
On-demand delivery often results in poor utilization of resources. At times, a vehicle runs half empty to service a same-day delivery. Research shows that customers are willing to wait longer if that helps reduce carbon footprint. Companies can incentivize customers to fulfil their planned delivery agenda. This helps companies to utilize the full capacity of the vehicle, get time to plan the best route and take up multiple deliveries on a single trip.
Incentivizing planned delivery is a triple win: The customer pays less, you pay less, and the environment pays less.
5) Return Shipment Strategy
More online sales can parallelly lead to an increasing number of returns too. As a result, the return touchpoint needs more attention in the last mile delivery cycle. Conversion is higher on platforms where the return shipment is easier. Handling returns in your delivery supply chain should be an integral part of your green approach to logistics and important consideration in your last mile delivery app.
Every return delivery adds to cost in terms of fuel, manpower and vehicle trip. How can you opt for more sustainable return practices? For less valuable items, consider sending a new product without requesting the old one back. This mitigates the pollution caused by return shipping. For valuable products, accept the merchandise back and refurbish it to avoid wastage.
India’s leading online retailer Flipkart taps on the power of delivery men, known as “Dabbawalas”, who make as many as 450,000 deliveries a day. Often a majority of them rely on bicycles to maneuver through the notorious traffic to complete their deliveries.
Driving the change with cleaner logistics is afoot as companies increasingly explore the sustainable paradigm. Delivery Pick-Up centres are also becoming more and more popular. A company’s sustainable practices are influencing the tenders they win.
Integrating sustainability in their last mile delivery value chain is surely becoming the key for companies to drive home a great logistics experience. Low-carbon logistics is the future of delivery in an on-demand world!
