Go the last-mile
Online shopping and last-mile delivery
During the week of shopping frenzy in November, we’ve followed up with our own initiative Blue Week, delving into eco-friendly solutions to consumption. With the rise in online shopping, consumer habits, supply-chains and retail footprints are changing. The carbon footprint of last-mile delivery, the final leg of the journey to get a product to the consumer, has long been an environmental and societal challenge.
Our appetite for convenience has given us the ability to get what we want by simply clicking it home and get it delivered at the doorstep. The trend of online stores, e-grocers and food delivery services competing to offer faster home deliveries is fuelled by a growing urbanization. Towards 2030 it is expected that 60 percent of people will be living in cities. By 2030, urban last-mile delivery emissions are set to increase by more than 30 percent in hundred cities globally, according to a the World Economic Forum.
This is taking its toll on the environment in the form of more emissions, pollution, and congestion. With no interventions, it is expected to lead to a 32 percent jump in carbon emissions from urban delivery traffic by 2030.
Consumers are watching and they have a tall order: convenience, speed, and sustainability at the right price. What can be done?
Buyer awareness about delivery options
Online purchases can happen quick and easy, without consideration of the shipping option, the size of the shopping basket or where, when, and how the order impacts the environment before it´s waiting at you front door an hour later. An increase in deliveries and more delivery vehicles into city centres has negative impacts on congestion, air pollution and noise pollution. It is evidently time to do things differently and transform delivery services to 100 percent zero-emissions.
This transformation can happen by rethinking the last-mile, and finding new solutions that are both sustainable and convenient for customers. Electric commercial and heavy transport reduces CO2 emissions by as much as 63 percent compared to diesel vehicles. If you charge with clean, renewable electricity, you can cut emissions by as much as 84 percent –good news both for business, the climate, and people!
Many consumers would choose greener delivery options if they knew about them. According to the World Economic Forum study, 43 percent of consumers are more likely to choose retailers that offer more sustainable delivery options. The last-mile ecosystem must make consumers more aware of the environmental impact of delivery options and be more transparent by offering greener delivery choices at checkout.
Deliveries that are good for business
But incentivising greener choices doesn’t just extend to consumers. The World Economic Forum together with McKinsey & Company and the World Business Council for Sustainable Development, has developed three transition scenarios based on 24 supply chain and technology interventions. To address these challenges with people, planet, and profit in mind, the best-case scenario is the multiplayer ecosystem approach. It is a scenario where all stakeholders work together, to develop incentives that encourage consumers to receive deliveries in more sustainable ways.
“The ‘last mile’ is a complex, interwoven topic as it involves many ecosystem stakeholders. Our research shows that in an ‘ecosystem scenario’ in which both public and private players work together effectively, delivery emissions and congestions could be reduced by 30 percent until 2030 when compared to a ‘do nothing’ scenario, and technology can help to bring delivery costs down by 25 percent at the same time,” says Bernd Heid, senior partner, McKinsey & Company.
Sustainability in the last-mile doesn’t have to come at the cost of customer experience, or with a higher price tag. The inherent efficiency gains of fast, easy access to urban addresses could offset the incremental cost increases of investing in green vehicles.
Delivery companies are already investing in electric vehicles. City and national governments can further incentivise investing in greener fleets, enable the circular economy and develop greener route management practices by for example investing in electric vehicle charging infrastructure, making them convenient for delivery companies, offering GOV (green occupancy vehicle) driving lanes, express parking, ticketing and toll exemptions, or carbon credits for green vehicles.
Explore how Mer provides future-fit electric vehicle charging in all segments in our markets: