Addressing the Last Mile Problem

Abstract

The impacts of failed first-time home deliveries on additional carrier journeys (repeat deliveries) and customer trips (to retrieve goods from carrier depots) are of increasing concern to e-retailers and are assessed in this paper. The attended collection and delivery point (CDP) concept is one solution to first-time delivery failures, using a variety of outlets (e.g., convenience stores, petrol stations, post offices) as alternative addresses to receive deliveries. By using a database of households from across West Sussex in the United Kingdom, this paper confirms that certain benefits might accrue from using networks of Local Collect post offices, supermarkets, and railway stations as CDPs, compared with the traditional delivery method in which the carrier may make several rede-livery attempts to the home with the customer making a personal trip to the carrier's depot in the event that these attempts also fail. A network of CDPs across West Sussex would function most effectively (in reducing the overall traveling costs associated with handling failed first-time deliveries) when the proportion of first-time home delivery failures is greater than 20%, the proportion of customers traveling to the depot is more than 30%, Local Collect post offices are used as CDPs, and significant numbers of people would walk to their local CDP. Customers benefit the most from CDPs, with reductions in their current traveling costs of up to 90% being modeled here. The reduction in carrier traveling costs is much less, but the processing costs associated with home delivery failures are reduced significantly by diverting the failed packages to CDPs.