The Challenge Of Urban Logistics

Nobody would think that pouring petrol on a blazing fire would help to put it out, but for many logistics suppliers, and their clients, that’s what the challenge of urban logistics feels like. As more people order online every day of the week, more delivery vehicles flood into urban centres, adding to the congestion, stress and pollution that are just part of the daily experience of urban delivery personnel.

How cities handle logistics

E-commerce is the biggest boom industry since the dot com bubble burst. It shows no sign of slowing down with retail shopping, food delivery, and now services (dog grooming, massage etc) becoming commonplace online purchases for most people. While e-commerce used to be the preserve of the personal, with people ordering goods from their home computers to be delivered to their home addresses, today nearly a third of deliveries are made to individuals at their places of business, while B2B deliveries make up nearly half the urban logistic traffic in major cities across Europe. While some urban centres have rigid legislation about bulk deliveries such as HGVs, none have, as yet, created legislation that deals with last mile delivery to individuals, although for London at least, that legislation is on its way.

London Mayor proposes tough regulation for urban logistics

In his draft Transport Strategy, published in the summer of 2017, Sadiq Khan stressed that delivery companies must become more efficient through “consolidation, rescheduling or switching to more sustainable vehicles.” He also set a target to reduce the amount of freight traffic in the morning rush hour by 10% within a decade. The Clean Air component of his strategy includes an Ultra Low Emission Zone for Central London by 2019 – a zone he plans to extend to the entire area between the North and South Circular ring roads. Such a proposal would require logistics providers to upgrade fleets or find other new ways to limit their polluting impact.

Innovation in urban deliveries

Many cities are trying to find novel ways to manage the flood of small deliveries that clog streets and create a stream of couriers and delivery drivers in office blocks and administrative centres. Doddle parcels, for example, has set up a system where their stores – inside railway stations – act as delivery hubs so that people don’t have to receive packages at work. CitySprint offers a service called ‘on the dot’ which works with more than fifty retail partners to allow customers to click and collect and have their goods delivered within an hour by a CitySprint courier. They claim this reduces city centre pressure by encouraging people to have spontaneous orders dropped off at their homes. Amazon lockers, order grouping and ‘off hours’ delivery projects are all designed to reduce pressure on city centres at peak hours, but with e-commerce deliveries projected to increase by 85% in the next decade, these are minor contributions to an escalating problem.

Reducing delivery returns could cut urban congestion by a third

It’s easy to forget that the returns process is a major contributor to the challenge of urban logistics because it is a more time intensive activity than delivery. Cities are reckoned to lose 4% of GDP through inefficiencies including traffic jams, lost time and fuel consumption: returns are a substantial drain on individual logistics organisations, and considered to be a stressful part of the job by delivery personnel who must check the quality of packaging and the accuracy of paperwork before taking back goods.

Identifying logistical solutions for urban transport

Commercial transport is constantly bombarded by potential solutions but settling on the right decision to balance feasibility, implementation costs and customer experience isn’t easy. A recent report by McKinsey analysed over twenty potential logistical solutions and shortlisted six that they believe could reduce pollution emissions by a third and cut parcel delivery costs by between 25 and 50%. Top of the list are urban warehouses, called ‘delivery consolidation centres’ which would bring together packages from many sources for city delivery. The second place solution was electric vehicles, while the third was to institute load sharing – matching urban delivery items to spare capacity in commercial vehicles to ensure fewer vehicles enter the city. Also on the list: parcel drop boxes in both business and residential buildings so that people can retrieve their delivery at their leisure and finally, small autonomous vehicles to handle last mile deliveries.

UK warehousing already under pressure

A major concern for logistics organisation is the fear that the UK will default to World Trade Organisation rules if Brexit negotiations go badly. This would immediately lead to substantial tariff increases of between 2.5-5% especially for spare parts which are usually held in warehouses on a just-in-time supply basis but will become increasingly stockpiled, especially by major manufacturers in the automative and white goods industries.

Delivery uncertainty equals a negative customer experience

One of the biggest challenges for urban logistics is resolving issues of delivery uncertainty. City customers have become increasingly used to one hour window deliveries but the pressure being exerted by congestion is challenging the ability of logistics companies to meet their delivery commitments. ‘Cargo bikes’ and ‘auto-rickshaws’ are both being explored to ensure last mile deliveries where a van or car simply isn’t feasible, but for larger deliveries neither of these alternative logistics solutions are viable. Mini-warehousing, within urban centres, is likely to be an absolute essential in the near future and third party logistics services will become more individualised, with pick and pack services, returns and last mile delivery all incorporated in highly specified contracts that allow retailers to have confidence that the challenges of urban logistics are being overcome.

We specialise in sourcing professional warehouse space and warehouse services across the UK, working with a host of professional 3PL companies to find the best solution for individual requirements. If you require our assistance in locating the best solution for your business, to be as efficient as possible, simply contact us today.

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