Using E-fulfilment centres for direct last-mile parcel delivery: an activity cost based analysis

Abstract

In the last few years, online shopping has been increasing rapidly. Optimising the sorting processes in E-fulfilment centres, combined with direct parcel delivery from the E-fulfilment centres to the close-by customers has not been widely studied in a quantitative manner. The main objective is to show whether E-fulfilment centres can generate a reduction in costs for parcel delivery.Two models are used to calculate the cost savings by using of an E-fulfilment centre. The volume of parcels has a crucial role in the calculation (and the competitiveness) of delivery costs. The time-driven performance reaches a break-even point for the volumes that can compete with the logistics providers. The impacts of directly delivering parcels from an e-fulfilment centre to nearby customers result in lower greenhouse gas emissions.