Improving Last-Mile Parcel Delivery Processes– A Physical Internet approach to low emission deliveries


Urban last-mile logistics require a systematic approach to be decarbonised. System-wide models exist: the Urbane Project has set the goal to prepare the ground for PI-driven operations in urban logistics.

The rapid growth in e-commerce over the past two decades has created significant problems for cities as the growth in the delivery of goods purchased online (last-mile deliveries) has increased traffic congestion and vehicle emissions.  This rapid growth in last-mile delivery requirements has also had a negative impact on logistics companies as the cost for rapid delivery of parcels has increased to over 50% of the total logistics costs for these items.  To achieve zero emissions objectives and to reduce the negative social impacts of last-mile deliveries, cities have begun to experiment with emission-free commercial zones, urban consolidation centres, micro-consolidation centres, electric vehicle and bicycle delivery services, crowdsourced deliveries, and numerous other approaches that promise social and environmental benefits.  Many of these experiments have shown positive results “in the laboratory” but their impact at scale in the “real world” of city-wide operations remains, for the time being, something of a question mark.  

Ensuring that city-wide benefits result from implementing any of these innovative concepts requires a systems approach to delivering goods within the city’s boundaries.  This is required to ensure that parcel delivery operations are optimised not simply for single carriers, but for the city as a whole.  System-wide organisation and management of logistics operations reduces empty kilometre movement of delivery vehicles thus minimising congestion and emissions.  It also lowers costs as economies of scale, benefiting both consumer and logistics service providers. Unfortunately, few models exist for cities to implement system-wide improvements in logistics operations that are self-regulating.  

One model that has emerged that enables system-wide self-regulation uses an analogy of parcel shipments as being very similar to the movement of data packets over the Internet.  This model, called the Physical Internet model, imposes relatively few constraints on how service providers operate their delivery networks.  It does, however, require each service provider to interact with every other service provider through the implementation of certain standardised inter-networking protocols.  It also requires service providers to share resources so that network operations run as efficiently and effectively as possible.  Since the Physical Internet model, like its digital counterpart, is simply a platform based on a certain set of agreed-upon rules, it does not discourage innovative approaches to performing the delivery services themselves.  It simply provides a set of standard rules that, when adopted, allow service providers and city administrators to easily consolidate system-wide parcel flows and optimise the last-mile delivery process.  

The PI-inspired model is at the core of the URBANE project’s methodology. The project recently published a deliverable on the potentials of PI-inspired models in last mile logistics, available here. URBANE is a Horizon Europe-funded project composed of 39 partners, is focused on developing the Physical Internet concept through a three-phase approach. In the first phase, four living labs (Helsinki, Thessaloniki, Bologna, and Valladolid) will build innovative last-mile services on top of component elements of the concept. In the second phase, two “twining” living labs (Karlsruhe and Barcelona) will advance the findings from the first phase and build additional services on improvements in the concept. The third phase of the project is composed of six feasibility studies in follower cities (Aarhus, Antwerp, La Rochelle, Mechelen, and Prague) that will demonstrate the general applicability of the service models developed in the first two phases. The objective of the project is to demonstrate how innovative technologies, implemented using evolving Physical Internet concepts, can achieve up to 20% reductions in greenhouse gas emissions from last-mile deliveries. It is hoped that the demonstrations made in the first two phases of the project, along with the feasibility studies, will encourage other European, and international, cities to adopt the approaches developed in the URBANE project for improving the environmental and operational aspects of last mile delivery.

Author: Rod Franklin



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