Going the Distance – How will tech make that crucial ‘Last Mile’ delivery more sustainable?

The global market for last-mile deliveries (or last-mile logistics) was valued at $131.5 billion in 2021. While impressive, this figure is set to more than double to $288.9 billion by 2031. In a single decade, last-mile deliveries will come to represent a global market bigger than that of personal computers.

Massive commercial activity inevitably brings with it vast quantities of physical waste and CO2 emissions. The 2021 Parcel Shipping Index predicts that global parcel volumes will double to 266 billion by as early as 2026, creating even bigger packaging waste streams if said parcels are not designed, constructed, utilised and recycled sustainably.

Equally, more packages will mean more delivery vehicles on the road to physically transport them across that last mile. The same report believes that the world’s top 100 cities will experience a 32% increase in delivery-based traffic in the coming 5 years. That’s millions of vehicles making hundreds of millions of extra journeys, contributing to the already untenable rate of road transport making up 15% of global CO2 emissions.

Without careful consideration of its interconnected sustainability issues, last-mile deliveries will deepen the ecological fallout of the world’s already overburdened urban areas.

EVs are practically tailor-made for last-mile delivery work. Short, targeted delivery routes which routinely feature stop-start traffic in densely populated cities are a nightmare for fuel efficiency in hydrocarbon-based vehicles, while really allowing EVs to shine.

Accordingly, both national mail delivery companies and smaller private enterprises are focusing on expanding their electric fleets. In Europe – an early adopter of EV fleet strategies – major post and carrier groups are boosting EV numbers and investments to drive long-term sustainability. PostNord now has a fleet of 5000 EVs, while the UK’s Royal Mail has 3300.

EVs don’t have to come in the form of postal trucks either. In the UAE, EV maker Barq made a big splash with its regionally appropriate delivery bike. Not only does their electric moped feature a smart dashboard to help the driver navigate their route safely and efficiently, it also has cooled handlebars and a reflective windshield to protect the driver from the heat. With an operational range of 25km, this is the perfect last-mile delivery vehicle. Hot off their latest $50 million investment round, Barq aims to have its manufacturing facility up and running by early 2023, ready to start serving a high demand market. 

The delivery drone is not a new concept, but it is a complicated one that shows frustratingly marginal progress. While notable success stories include blood deliveries in Rwanda, the pace of drone-based delivery remains achingly slow.

Between early 2019-2022, there have been over 660,000 commercial drone deliveries made to paying customers, according to McKinsey. That sounds like a lot, but given that billions of deliveries (including post, packages, food, beverages, medical supplies and more) are made every single day, this is merely a drop in the ocean. In packed cities, the prospect of harnessing thousands of delivery drones for upscaled service presents a regulatory nightmare, and there’s related question mark of how much public acceptance this kind of system will enjoy.

However, delivery drones present a compelling case in terms of being a sustainable alternative to road-based transportation. One of the leading companies gathering momentum today is Irish-based Manna. With 2,000-3,000 daily flights, Manna’s drones deliver all manner of F&B items, from hot coffee to whole melons. Each drone can reliably make 7-8 deliveries per hour, operating safely at 80kmph, with most deliveries made in under 5 minutes. Crucially, Manna claims that its delivery system is 90% cheaper than a traditional car-based approach.

As with all sustainably alternatives, operational costs and scalability are the key factors at play here. If delivery drones are going to make a dent in global demand and provide a cleaner alternative to cars and bikes, they are going to have to provide both. Just look at Amazon, whose drone delivery programme launched in 2016 but has since languished, unable to live up to a fraction of its promised potential. Smaller providers like Manna may provide the necessary proof of concept to build up successfully from small towns to take on even the biggest of cities.

EVs make driven deliveries more sustainable, drones are a great way to overcome traffic, but to really take a bite out of the CO2 emission levels and associated environmental problems, delivery companies need to make sure that every journey is as short as possible from the outset. Beyond individual technologies that boost sustainability, there needs to be a holistic approach to drawing the shortest, most direct line between the consumer and their desired product.

Essentially, this means tightening the connection between vendor and buyer. For smaller operators, inefficiencies are easily avoided by the relative simplicity of the transaction and fewer steps in the delivery process. However, larger companies (Amazon, FedEx et all) continue to pour vast amounts of resources into the automation and integration of their entire logistical setups, specifically so that they cover that crucial last mile of the journey. Key trends in this ongoing struggle to tackle last-mile delivery include micro-fulfilment centres, robot-based ordering, stocking and delivery, utilising ‘gig economy’ delivery drivers, real-time tracking and traceability tools, and, of course, the wholesale optimisation of every stage of the process by AI/Machine Learning platforms.

According to EY, even the biggest of delivery providers can secure cost reductions of up to 10%-30% and major sustainability boosts if they commit to the holistic optimisation of the logistical setup and last-mile delivery systems. This approach is gaining popularity across the global industry, and this month saw UAE-headquartered e-commerce platform noon.com announce its plans to build the UAE’s largest fulfilment centre in Abu Dhabi. The 252,000m² centre will leverage the latest digital technologies to improve last-mile delivery sustainability and efficiency in Abu Dhabi. If successful, this will be a blueprint for other major Middle Eastern cities to learn from.

So, whether we’re talking about electric trucks, drones, or robotic helpers in warehouses, it’s clear that the future of last-mile logistics depends on bringing every available technological tool and advantage together under one system. Providers who can successfully integrate these tools intelligently are the ones who will reap the benefits of cost reduction and consumer loyalty, as the average customer becomes ever more concerned with the ecological impact of their commercial behaviour.