Urban logistics are being transformed by bringing together city transport planners, logistics operators, and users of delivery services to apply digital technologies to grow the city economy, while making logistics services sustainable.
Remember how many packages you had delivered to your doorstep last Christmas? How thrilled you were every time the bell rang? Think again. eCommerce is convenient and it’s a major economic opportunity for small and medium-sized logistics businesses in European cities, but it’s also a challenge that needs to be addressed.
Delivery demand patterns are changing to offer on-demand delivery that is more personalized and more frequent, with smaller shipments and better return services. The blending of commerce and ecommerce is driving this demand, through a seamless “commerce everywhere” experience.
In Paris, for instance, Amazon delivers around 250,000 packages a day. On the supply side, brick-and-mortar retailers are trying to operate with minimal inventories by leveraging leaner supply chain approaches.
Rethinking the Urban Supply Chain
Greater fragmentation and growth in delivery demand, coupled with the need to minimize inventories on the supply side, have created a mismatch that has led to suboptimal utilization of city logistics. This means that many delivery trips are made with low load factors and backhaul trips are empty. More delivery trucks traveling half empty, roaming around looking for parking or blocking narrow lanes to load and unload packages, exacerbates congestion and pollution problems in cities.
Traffic accidents are also a risk. Transport for London (TfL) research finds that heavy goods vehicles are involved in 63% of fatal collisions with cyclists and 25% of fatal collisions with pedestrians, despite only making up 4% of the overall miles driven in the capital.
Embrace Innovative Urban Logistics Solutions
City leaders that want to make their cities smart can work with the ecosystem of retailers, ecommerce companies, logistics operators, and new mobility operators (such as transport network companies and food delivery specialists) to address these challenges by creating a virtuous cycle of:
- Increasing the productivity and energy efficiency of delivery vehicles
- Improving the effectiveness, reliability, and convenience of delivery services
- Reducing externalities such as air and noise pollution, congestion, and traffic accidents
In response, the European Union, national and city governments, and private sector supply chain operators are increasingly scaling five types of initiatives to improve city logistics:
- Flexible deliveries through modular shipments and multimodal transport means. Example: In Italy, there are over 60 bicycle logistics operators in 40 cities.
- Collaboration across stakeholders. Example: MixMoveMatch, a Norwegian company, offers a software-as-a-service solution to shippers and logistics service providers to mix, move, and match shipments to optimize truck loads and reduce duplicate trips.
- Electrification of fleets. Example: In the U.K., Sheffield and Westminster city councils have started to test electric waste collection trucks powered by energy from the household rubbish they collect.
- Proximity of deliveries. Example: The Mayor of London and TfL are working with boroughs, businesses, and the freight and servicing industry to transform the way deliveries are made in the capital. A key part of the plan includes offering more click-and-collect points at Tube stations.
- Optimization of freight traffic. Example: The City of Paris is evaluating how to limit deliveries to inner city neighborhoods to specific times, with a maximum number of deliveries capped for each area.
European city leaders that want to harness the opportunity and tackle the challenges of city logistics should include sustainable logistics programs in their intelligent transportation strategies. They should also work with the ecosystem to pilot new business models and embrace technologies such as artificial intelligence, the Internet of Things, video surveillance, and mobile and GPS. This will enable them to optimize traffic, share shipment data, and increase physical security and cybersecurity of city logistics.
If you want to learn more about this topic or have any questions, please contact Massimiliano Claps, or head over to https://www.idc.com/eu and drop your details in the form on the top right.