We need urban logistics, even though it often annoy us: it makes our lives easier, provides us with supplies and disposes of what we no longer need. But air pollution, noise pollution and dense roads are unfortunately part of it. So what can we do about it? How can we solve these problems?
What comes to your mind when you think of inner-city logistics? A) Why should I care about logistics? B) Where’s my parcel? Or rather C) Exhaust gases, traffic jams etc.? Our consumer behaviour is part of the logistics problem. But maybe we can also help solve it.
Why should I care about logistics?
Usually, our individual mobility is more important to us than the mobility of the goods we have ordered online. In order to control the growing traffic volumes in cities, we are advised to use our bicycles or public transport or at least to share our car with others. And thanks to regulations and incentives, more and more people are favouring these transport options, especially those living in urban areas: be it because annual public transport tickets are heavily subsidized and therefore very affordable as in Vienna (annual travel pass €365) or because the city wants to be the most bicycle-friendly city in the world (like Copenhagen).
Where’s my parcel?
But when it comes to urban logistics, nobody tells us: Order less online or at least make sure that you’re at home when the goods are delivered so that the delivery service does not have to make several attempts to deliver your parcel. A total of 3.35 billion parcels were shipped in Germany alone in 2017. Online trade is growing strongly, especially in the B2C sector. According to the statistics portal Statista, it generated over 53 billion euros in 2018 – compared to 12 billion ten years earlier. This is an important economic driver that you don’t want to slow down by asking consumers to buy less.
However, the last mile to the front door is a huge cost factor. Deliveries to private customers are always expensive, they account for over 50% of the total cost of parcel deliveries. This is due to the small quantities and individual delivery addresses, but also to unsuccessful delivery attempts. Some carriers are already debating whether they should introduce a surcharge for deliveries to the front door. Nevertheless, it is doubtful whether this will lead to a change in the clients’ ordering behaviour.
Air pollution, traffic jams, etc. – what can we do about it?
We want to receive the goods we ordered as quickly and conveniently as possible. Our high expectations put additional pressure on the logistics service providers who have to cope with city regulations on delivery traffic, scarce resources and rising costs. Plus, the delivery volume is increasing. However, this is not only due to our parcels. Since the retail trade has less and less storage space in cities, supplies have to be carried out more frequently. The consequences are well known: gridlocked streets, lack of parking space, bad air, noise – and now we are suddenly interested in logistics, because… We can’t go on like this! But then how?
Of course, there are already a number of approaches to relieve urban logistics. Alternative delivery vehicles such as load wheels or parcel drones, deliveries to the boot, city hubs or shared packing stations – to mention just a few. But there is still no clear policy. And it is also unclear who should establish this policy. Should everyone just do what they can do, in the hope that things will somehow turn out to be all right?
Regulating the Wild West
The German Logistics Association (BVL) and the consulting firm Roland Berger warn in their study Gemeinsam gegen den Wilden Westen. Urbane Logistik 2030 in Deutschland(Together against the Wild West – Urban Logistics 2030 in Germany) against the chaos in view of the growing number of logistics service providers and innovative concepts. In the ‘Wild West’ scenario, even more traffic and traffic delays are to be expected. This is one of four possible scenarios that experts predict for the logistics of the future. Another scenario called ‘Regulated Diversity by cities’ aims at achieving greater efficiency in logistics and reducing traffic volumes in urban areas. The ‘City Platform’ scenario seems almost a continuation of the previous one. Here the city also operates a platform where all delivery capacities converge, the flows of goods are bundled and delivery to the last mile is optimised. The fourth and final scenario focuses on the ‘Coexistence of the Big Ones’. Only a few large platforms are left, and the city is not strongly involved.
Recommendations on how to avoid confusion are given, while expressing concern that implementation may fail because major suppliers are reluctant to cooperate, and cities are too hesitant. Marcel Huschebeck, Logistics Research Portfolio Manager at PTV Group and logistics expert with over 15 years of experience in numerous logistics research projects, says: “The concern about unwillingness to cooperate is not unfounded. However, the benefits of cooperation between the top players are tremendous. Their cooperation might offer the greatest potential for making freight transport in urban areas more efficient and sustainable. Despite the rising costs of logistics in cities, this potential has not yet been identified.” New technologies and concepts such as the Physical Internet offer a holistic approach to reducing costs by a double-digit percentage. This includes modularization, cooperation and so-called interoperability. The aim of the Physical Internet is to send goods as easily as information through open channels on the Web. It applies the principle of exchange of standardized data packets to material flows, which would help make transport logistics more efficient, flexible and environmentally friendly.
Faster achievements and long-term strategies
According to Huschebeck, faster results can best be achieved through a combination of additional regulations and incentives for more environmentally friendly logistics. “But cities really have to play a more active role. It is important that common goals are defined, which take the interests of all participants into consideration. This is a new approach for many cities which often requires a new way of thinking. Under no circumstances should long-term strategies be abandoned in favour of short-term solutions.” These, in turn, are most effective if they are developed in cooperation with logistics companies and the business community. This also becomes evident in the various EU projects such as BESTFACT that Huschebeck was involved in in recent years. “Legal guidelines and emission limits must be implemented by cities. They offer no room for manoeuvre, but much can be developed jointly and implemented as part of long-term strategies. In addition, a lot of highly motivated people also come up with a lot of good ideas,” says Huschebeck.
In the second part of our article you will learn more about Delivery as a Service and the wide range of opportunities it has to offer.