Urban last-mile logistics rethought: Insights from a one-year pilot project

Abstract

E-commerce parcel delivery is an important part of the overall service experience of online retailers; however, the service quality of today’s parcel delivery cannot meet the expectations of consumers. This forces urban logistics practitioners to consider how the supposedly diverging requirements of both convenient and environmentally friendly delivery can be met in an economically viable way. One possible solution is ‘Kiezbote’, a last-mile concept that collects parcels from various senders and parcel logistics service providers (PLSP) centrally in a micro-hub strategically located within or just outside the neighbourhood to be supplied. Then, parcels are delivered consolidated per recipient within a desired time window by cargo bike. The concept was tested for one year in Berlin-Charlottenburg. It was shown that the tested delivery concept outperforms large PLSPs in terms of customer satisfaction and reduces emissions such as CO2 on the last mile. Economic viability could be achieved, but this requires a sufficiently high volume of parcels, as the willingness to pay is limited. Based on the results, online retailers should place greater emphasis on reliable and accurate delivery. PLSPs have to work more closely with local delivery partners to offer a wider range of customised delivery services. Technology providers should keep pushing new hardware and software solutions into the market; however, industry standards and interfaces are crucial when it comes to realising a diversified last-mile landscape. Delivery start-ups should combine both new modes of transport and digital business models and municipalities and politics should provide infrastructure, regulations as well as fast approval processes. This paper deals with the question of how the wish for both a convenient and environmentally friendly delivery service can be met in an economically viable way.