by Walther Ploos van Amstel
With e-commerce setting records during the 2020 holiday season and package deliveries forecast to grow by 80% over the next decade, a new study by the MIT Real Estate Innovation Lab reveals the tangible environmental benefits of online shopping versus bricks-and-mortar.
Digital technology advancement has been changing grocery retailing customers’ behavior and expectations. Enabled by digital technologies and pleased by the digital disruptors, customers are expecting convenient online shopping and fast delivery. To retain their loyalty, retailers are forced to provide better services through digital transformation.
Many retailers are making efforts to improve their channel integration to enhance the order fulfillment for their customers. Network optimization is a key element. At the same time, more companies are trying to make their supply chains more sustainable, and transportation evidently accounts for a large share of CO2 emissions.
In the era of e-commerce and climate change, sustainability in last-mile delivery is an important factor. More online shopping and more fast shipping mean more vehicles on the road with lower utilization, higher frequency of deliveries, and more stops per route. These conditions have a direct impact on the environmental footprint of last mile.
We are seeing a growing body of research into last-mile logistics for delivery of products in cities. The growing congestion of cities and the explosion in e-commerce home delivery have challenged traditional last-mile logistics strategies that have focused on point-of-sale delivery. “In the city, shipments are typically much smaller and more fragmented than in regional transport,” …
New opportunities arise to design profitable last-mile delivery strategies. In particular, companies can influence customer behavior by choosing the lead-times or time-slots that are offered (capacity controls) and as well as their associated fees (pricing controls). These decisions ultimately seek to balance the capacity utilization and increase the profitability of the delivery operation.