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A delivery driver in the transport and logistics industry is in the cab of his delivery lorry reviewing a printed checklist.

How to make a sustainable last-mile work for your business

The so-called ‘last-mile’ – the final trip from warehouse shelf to doorstep – has long been the costliest part of the parcel delivery journey.


Now that consumer habits have changed forever – eCommerce is expected to take almost 30 percent of the entire UK retail market1 in 2022, with online retail in other European countries, spearheaded by Germany, now near 20 percent of the total retail market1 – it’s now even more crucial for retailers and their logistics partners to optimise their last-mile costs if they want to compete at an appropriate level.

And it’s not just about cost. The UK and Europe are now setting out their regulatory paths towards Net Zero, in which ambitious targets for reduced carbon emissions must be met, including the eventual disappearance of IC-engines and diesel from the roads. End-to-end sustainability is going to be vital, and nowhere more so than in the last-mile.

Customers are making clear to retailers that sustainability matters to them personally, too. A survey of 5,000 fashion-retail shoppers in France, Germany, the US, UK, and China found that 60 percent want more transparency about the production journey their purchases have been on2.

Those same customers will be very tough on retailers not meeting their expectations in service and delivery flexibility options: a Europe-wide survey revealed 63 percent of UK online shoppers will switch baskets if delivery options don’t meet their needs, while German shoppers are most reluctant to pay for online delivery3. These are tough, costly challenges and no retailer or delivery service is going to find it easy. Across Europe, the rewards for those who outperform the competition are high, though. For the retailers that do get their delivery options right, customer loyalty significantly rises, with the majority of shoppers in the UK (91%), France (87%) and Germany (83%) visiting their favourite sites first when online shopping.

Cost-effectiveness via an end-to-end strategy


Retailers and their logistics partners can play their part in contributing to a low-cost and sustainable last-mile by looking at it as part of the wider picture: by formulating an integrated end-to-end strategy across the logistics spectrum in which the cost-effectiveness of the full parcel journey is optimised.

So, what does an integrated end-to-end parcel journey look like?

Pick the right site location


Warehouse investors and owners are competing fiercely in the new urban and near-urban arena. There are too many chasing too few sites, with rental yields sky-rocketing as a result4. The motives for this are speed and sustainability. Sites need to be physically closer to consumers, who want delivery not tomorrow, but today (and preferably in the next hour). With city planners introducing Ultra Low Emission Zones (ULEZ) across Europe, delivery managers need to service customers via electric or other low-emission transport. Scooters and bicycles are making a big return to the streets of European capitals on behalf of Quick Commerce apps.

Warehouse locations are no longer exclusively big sheds next to motorways. Final sorting and delivery stations are being placed much nearer to large population blocs. Some innovative retailers are re-purposing larger stores into click and collect hubs, with a concept known as micro-fulfilment, a growing trend in superfast delivery (especially grocery).

No more costly warehouse mis-picks


Automated picking systems and WMS (Warehouse Management System) software will boost last-mile sustainability because they cut out mis-picks (and therefore costly incorrect deliveries) and provide 24/7 service if required. Allied to state-of-the-art industrial printing technology, QR codes and barcodes allow high levels of data to be stored and collated, tracking parcels throughout the inbound, storage, buffer and outbound sections as needed. Clear, reliable labelling ensures that the correct addresses are both entered and read correctly, at all times.

A delivery driver in the transport and logistics industry is delivering a package to a residence.

End-to-end journey visibility


Fast-evolving ‘Track and Trace’ apps help all parties, and is an excellent business resource for the delivery provider. The delighted customer always knows where the parcel is – and if they’re not at the address to receive a parcel, that helps the supplier, too. The driver’s journey time is cut, pointless journeys are reduced, and routes are automatically optimised by the software to cut fuel miles and emissions. Realtime visibility of transport fleets, now being supplemented by Artificial Intelligence (AI) innovation, aids on the spot and future transport decision-making for transport managers, by updating data in realtime on routes and schedules. Clear labelling and visibility for scanning of barcodes and QR codes has an important role to play in this data journey – illegible or poorly-positioned labels will lead to precious data and time being lost, not to mention causing inconvenience for the all-important customer when items are needlessly mislaid or delayed.

Less packaging, less cost


Customers are demanding recyclable, returnable packaging – yes, because they care about the future of the environment, but also on a day-to-day practical level, because they are under their own pressures not to overfill waste collection bins in a world of many more parcels and fewer, more expensive waste collections. Parcel dimensions can be optimised using automated packaging and box systems to reduce box sizes and void fill. This has a positive impact on both postage costs and parcel capacity per delivery vehicle.

Meanwhile, it is a brutal fact that the high likelihood of costly returns has to be factored in and made easy for the customer in terms of both packaging and labelling. Indeed, 61 percent of customers said that a returns label was the most important aspect of a retailer’s returns policy5.

Next steps: work with trusted partners

To achieve resilience, retail decision-makers need to take a rounded view of the interplay between each facet of the delivery journey. A pinch-point during the warehouse process can lead to potentially costly ruptures in the last-mile. The winners will work with trusted technology partners at each stage of the parcel journey to give them the specialist tools to provide that all-important reliability and visibility – and priceless data to match.

 

Sources:

1 https://www.statista.com/statistics/286384/internet-share-of-retail-sales-monthly-in-the-united-kingdom-uk/
2 https://images.rbis-go.averydennison.com/Web/AveryDennisonCorporation/%7B4e8d8ddd-2a91-4eb8-baa0-0a5712b9dd9f%7D_digital-consumer-behaviour.pdf?elqTrack=true
3 https://www.bearingpoint.com/en-gb/our-success/insights/fine-tune-your-delivery-propositions/
4 https://www.colliers.com/en-gb/research#sort=%40datez32xpublished%20descending
5 https://www.sendcloud.co.uk/whitepapers/ecommerce-delivery-compass-2021/

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