Delivering All The Way: Challenges Posed by Last Mile

Some people are now using it for the first time, others depend on it and for others, it is a pastime: online shopping. In these ‘corona times’, shopping at the click of a mouse is on the increase. In addition to a flood of parcels, this also poses special challenges for logistics.

The ‘last mile’, i.e. the final leg of the transportation route through the city to the client's door, is a major challenge for courier, express and parcel service providers. The last mile accounts for the biggest part of the cost of delivering a parcel; it represents a major challenge for suppliers and service providers within the supply chain. This challenge is ever-present in the logistics industry. Bearing in mind the flood of parcels in the corona crisis, it could not be a more topical issue.

Using Free Space

Online shopping has been posting astronomic growth for years. Logistics companies and retail service providers must be able to respond to changing flows of goods as flexibly and cost-effectively as possible. The problem is that, for decades now, there has been hardly any change in the construction of logistics centers. As in the past, the main targets are large sites outside the city, with good connections to long-distance transport and close to production facilities and clients. However, land is a scarce commodity, especially in areas with a lot of logistics sites. So why not focus on existing free space in urban areas?

While these locations could be modern new buildings, they could also be less attractive space or areas used anti-cyclically, for example the upper floors of shopping centers, unused parking lots, open space in office buildings or sections of sports stadiums. These areas could be developed into small, decentralized logistics units, referred to as urban hubs. A continuous flow of incoming and outgoing goods can be processed via such hubs, seven days a week around the clock, to ensure short delivery times. Moreover, deliveries can be combined and pressure on transport routes reduced.

Taking New Paths Together

Another type of building that is being discussed as a new concept in neighborhood logistics is the white label hub.

These logistics centers on the outskirts of cities are independent of any service provider. They can be used by any courier, express or parcel service operator to provide combined transportation services from that location, using a shared mode of transport. In addition to cutting storage and labor costs, white label hubs also reduce transport expenses.

For new logistics concepts such as urban hubs and white label hubs to work, however, the needs of a whole range of different stakeholders must be taken into account. This starts with online merchants and their clients, through parcel service providers to project developers and the public sector. This option is still neglected nowadays in too many cases, resulting in wasted potential.

Individual Solutions Are Not Enough

Many new approaches to neighborhood logistics are just at the test stage or have only been implemented on a small scale so far. Although city logistics projects improve coordination in the movement of goods, reduce noise and emissions and make cities more attractive to citizens and retailers, only twelve German cities are actively pursuing a city logistics project at present. Especially with the disproportionate volume of shipments during the corona crisis, it is essential to promote cooperation, while different approaches must also be combined. Even though logistical requirements and organizational capacities vary from city to city, the same applies to all of them: logistics must not respond to new problems with old solutions.