Improving last-mile parcel delivery through shared consolidation and portering: A case study in London

Abstract

Based on the insights derived from practical trials conducted with carriers operating in London, this article proposes a last-mile delivery model that involves both driving and walking. A particularly innovative aspect of the model is the shared use of a third-party portering service between the carriers as an enabler to collaborative provision, and shared micro-consolidation points for temporary storage of goods. The model gives rise to a complex routing problem, for which a tabu search algorithm is developed. The algorithm is able to suggest vehicle routes that consolidate parcels in shared locations and porter paths that deliver items from various companies, reducing the overall delivery cost. We applied this algorithm to a manifest dataset obtained from two carriers operating in London. The results from the model suggested that sharing a third party portering service for the last-mile delivery element between the rival carriers in the case study reduced overall transport costs by up to 14%.