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The last mile The last mile

All change in the last mile.

Last mile service providers are facing huge challenges. They have to cope with a large volume of orders, which is constantly growing, driven by online retail. At the same time, customer tolerance of delivery services is also declining with last mile service providers facing complaints about double-parking, air pollution in city centers and higher delivery costs. And that is just one issue among many, as delivery to the recipient is the most cost-intensive and time-consuming stage of the entire logistics chain. The last mile is a challenge.

All change in the last mile

The last mile is a challenge. What ways are there to optimize the delivery process? What role does digitalization play in all this? And what scenarios could soon be reality? This white paper provides an overview of the current situation for the last mile, discusses alternative delivery options and takes a look into the future.

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The last mile – challenges for a sector.

The section from the parcel service provider's to the recipient, known as the last mile, is an extremely cost and time-intensive stage of the supply chain. This is because of the small delivery quantities, the wide distribution of delivery addresses and an average of four failed delivery attempts. The last mile also involves traffic congestion, pollution and noise. This stage of the transport chain will likely continue to be a major challenge due to the continuing growth in e-commerce and the associated volume of deliveries. Academic and industry experts are working on developing new concepts and expanding established solutions to optimize last mile logistics.

Online retail as driver.

One click in your shopping cart and an order is on its way. e-commerce provides a quick and convenient way to order goods from the comfort of your sofa and have them delivered directly to your front door. No wonder then that online trade, and in particular the B2C sector, is seeing high growth. According to a forecast by the statistics portal, Statista, e-commerce sales in 2018 will be around 53 billion euros (2016: 44 billion euros). The increase in the volume of last mile shipments is closely linked to the boom in online retail. According to the 2019 Last Mile Study by the German Parcel and Express Association (BIEK), 3.52 billion parcels were sent in 2018, which is an increase of around 4.9 percent compared to the previous year.

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Conclusion.

There is no universal remedy.

One thing is clear. New concepts are needed to make the last mile cost-efficient and environmentally friendly – both in terms of delivery and vehicle drive technology. However, there is clearly no one solution that meets all the challenges. Each of the above approaches has strengths and weaknesses. Not every strategy meets the specific needs of urban and rural areas either. Service providers of the last mile therefore need to develop new solutions, test their practical suitability and make appropriate investments. But customers also have to accept new technologies for the last mile and the extra costs for delivery to their door.

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