Companies next year will increasingly look to last-mile technology solutions to reduce carbon emissions from deliveries
Last-mile Delivery and Sustainability
With the ongoing surge in online shopping, last-mile deliveries are quickly becoming a key business strategy for retailers and carriers. Creating superior delivery experiences for consumers can lead to increased brand loyalty and future sales. In a bid to reduce their own carbon footprints, consumers are now demanding more sustainable deliveries. And last-mile delivery is not a sustainable process.
By 2030, demand for last-mile deliveries is expected to grow by 78% and emissions from those are expected to grow by more than 30% in 100 cities across the globe, according to a 2020 study by the World Economic Forum.
Having faster, cheaper, more flexible and more sustainable shipping is a competitive advantage for retailers trying to attract consumers. But demands for sustainability aren’t solely coming from consumers – they are coming from governments and financial institutions as well. With these pressures, retailers and shippers will continue to look for ways to reduce the environmental impact of their deliveries in 2023. Adopting last-mile technology will be critical for them to achieve this.
Tech-enabled Sustainability Solutions
Technology is changing the way last-mile deliveries are orchestrated by enabling greater predictiveness, configurability and adaptability, which will translate into greater efficiency and reduced carbon emissions. Here are a few key solutions that will continue to gain traction in 2023 to help companies create leaner, greener last-mile deliveries.
Loop optimization: Leverages driver activity data of historical deliveries to suggest the optimal number of routes within a defined geographic area. This results in an unlimited-scale solution that provides multiple optimized loops and maximizes route performance, generating greater delivery efficiency and reduced carbon emissions.
Green vehicle route planning: Enables companies to design and plan last-mile delivery of products with an intelligent mix of green fleets (electric bikes, bikes and foot delivery). As companies transition to using more carbon-neutral delivery methods, their routing software must account for bike lanes, sidewalks, charging stations and more. Traditional routing software oftentimes neglects the nuances that carbon-neutral delivery methods entail.
Carrier allocation system: Helps shippers select suitable delivery partners for different types of shipments to improve their first attempt delivery rates, minimize delivery re-attempts and damaged goods deliveries, and avoid repeated transport and corresponding carbon emissions. Increased visibility into carrier performance will allow shippers to select the most efficient carrier partner for specific delivery types, reducing both costs and carbon footprints.
Sustainability dashboards: Provide a visual representation of carbon emission KPIs helping shippers and carriers to understand and make decisions based on carbon emissions across various modes, routes and carriers. The dashboards can scale to be granular enough to measure package-level emissions, and provide the ability to track and control carbon emissions across all modes of transportation (road, rail, ocean and air) and benchmark third-party carriers and routes with the lowest carbon emissions. This information can even be passed on to end consumers, giving them visibility of the carbon emissions for each shipping option and the ability to choose their preferred option.
Long-haul truck route planning: Allows carriers to design optimal multi-day, long-haul trucking routes to minimize idling times, avoid roadblocks and reduce fuel consumption. The algorithms can facilitate long-haul deliveries with multiple drivers to swap driving shifts and meet the legal norms of on-road driving requirements. Carriers can achieve sustainability goals and meet their on-time-in-full (OTIF) targets.
Reverse logistics technology: Increases the efficiency of the severely inefficient and unsustainable online returns process. Real-time visibility and enhanced scheduling enabled by technology can boost the communication between retailers, carriers and consumers. This can maximize the use of delivery vehicles with empty space, scheduling and routing them efficiently from return pickup location to an omnichannel fulfillment destination where the product can be resold or refurbished, not thrown away.
The Profitability of Going Green
Sustainable last-mile deliveries reduce environmental impact but also improve profitability for retailers and carriers. Sustainable deliveries are efficient deliveries that achieve more with less. By introducing route optimization, green-vehicle fleets and improved carrier integrations, companies can reduce the amount of people, fuel and effort required to fulfill orders. The added benefit? Reduced costs and improved profitability. Overall, companies that actively plan with climate change in mind secure an 18% higher return on investment than companies that do not.
Increased customer loyalty is one of the strongest profitability benefits from investing in sustainability. Companies that can reduce their carbon footprint and communicate this with consumers can deliver a positive brand image and gain a competitive advantage. Companies that execute on their sustainability initiatives are likely to enjoy increases in consumer loyalty and satisfaction as well as increased total revenues. Because of this, expect retailers and carriers to continue to invest in technology to make last-mile deliveries more sustainable in 2023.
Views expressed above are the author’s own.
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