Abstract
Delivering parcels to collection and delivery points (CDPs) is often seen as a better option compared with home delivery. However, if the demand is inhomogeneous, either the parcel locker utilization or the service level (i.e., the number of parcels that can be delivered) is low. Either situation would reduce the financial viability. This paper compares two options to increase the utilization, namely: (i) modular lockers (i.e., numbers of lockers adjusted periodically depending on demand) and (ii) combining parcel lockers with staffed CDPs. The latter has the advantage of a low investment cost of staffed CDPs and a low cost per parcel of parcel lockers. Secondly, the paper calculates the optimal number of lockers at a staffed CDP, assuming that all parcels are placed in the staffed CDP if the parcel locker is full. This method was applied to data collected by a parcel delivery company in London. The advantage of using real world data over one year is that it includes seasonal and daily changes in the parcel demand. The decision support method accounts for parcels not being picked up by customers on the delivery day, returned deliveries, and the net present value (NPV) of the investment. This paper shows that having enough lockers for 100% of all parcels compared with 80% doubles the number of required parcel lockers because of the inhomogeneity of the demand. In addition, combining fixed lockers with staffed CDPs offers greater financial benefits compared with modular lockers in this case study.
Highlights
Last mile delivery is seen as the costliest part of the supply chain, and can account for28% of transportation costs [1]
Open innovation is increasingly popular with large companies around the world [39]
By applying a real data-driven approach [40] to reduce the cost of parcel delivery, this paper highlights the advantages of open innovation
Summary
Last mile delivery is seen as the costliest part of the supply chain, and can account for28% of transportation costs [1]. The growth of internet shopping and the resulting change from delivery to retail shops to delivery to customers’ homes has increased the number of delivery vehicles in residential areas [2]. This has caused a rise in external effects (e.g., increased congestion and emissions) in residential areas [2,3,4]. Researchers around the world have investigated alternative delivery methods to reduce the costs and external effects of last mile delivery [2]. The most cited advantages of parcel lockers are the reduced risk of a delivery failure [11,12,13,14] and increased consolidation of deliveries [5,6,7,8,11,13], decreasing the number of drop-off points [6] and vehicle distance travelled [2,15,16]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
