DfT Position statement on last mile logistics

Rate this item
(1 Vote)

DfT Review of last mile logistics 2019 s

From a meeting in 2019, the numbers appear far removed from present day in the Govt Position statement on last mile logistics, but vision of electric van and cargo cycle is in there. Published this week 19 June 2020, this states the independent position of the Department for Transport’s (DfT) Science Advisory Council on last mile logistics in transport. The report includes:

·         a summary of the issues around last mile delivery

·         a summary of potential technical solutions and business-model measures to minimise negative impacts of last mile delivery

·         recommendations on how Department for Transport could support future solutions for last mile delivery​

 

 

DfT Position statement on last mile logistics

Published 19 June 2020

DfT Research and analysis report:- Background: The Department for Transport (DfT) Science Advisory Council (SAC) met on 20 March 2019 Several subject matter experts from industry and academia were invited to the meeting to provide their views and to facilitate the discussion to discuss the issues and impacts of last mile logistics, and to recommend how the department should act to minimise the negative aspects whilst supporting the benefits.

Specifically, the SAC was asked:

“Given DfT’s desire to ensure that transport is optimised to deliver societal and economic benefits, the SAC is invited to consider:

·         what are the potential near and long term technical solutions to last mile delivery and do these differ between urban, peri-urban and rural environments?

·         how could the most promising solutions be supported to facilitate their introduction?

·         what are the barriers to innovative solutions, especially revolutionary technical solutions, and how could they be addressed?

·         taking account of push (from retailers) as well as pull (consumer demand) factors, how should DfT respond to the way this market is developing?”

 

Introduction

Last mile delivery is defined as the movement of goods, most likely from a transportation hub, to the final delivery destination. Increasingly, the focus of last mile logistics is to deliver items to the end user as fast as possible, with next day delivery becoming the standard for non-food items and next hour now being trialled.

The growth in on-line shopping is leading to a substantial rise in parcel deliveries. There were 3.2 billion parcels shipped in the UK in 2017, an 8.2% year-on-year increase and an increase of 65% since 2012. The value of next day deliveries reached £5.5 billion in 2016, up from £3.1 billion in 2012, and same day deliveries have risen from £488 million in 2012 to £1 billion in 2016Van traffic in the UK grew 2.7% between 2016 and 2017 to reach a record high of 50.5 billion vehicle miles - the fastest growth in percentage terms of any motor vehicle type - although not all of this is attributable to increased deliveries.

This is not all one-way traffic from seller to buyer; e-commerce is a two-way transaction. In December 2018 goods worth an estimated £2.4 billion were returned after the Black Friday and Cyber Monday sales. Several online retailers are now offering a ‘pay for what you keep’ service at no delivery or return charge to the consumer. This enables customers to request far more than they expect to purchase, to enable them to make their final decision at home (although recent news reports suggest that some companies are starting to address this).

The World Bank estimates that 55% of the global population currently live in cities and the UN has projected that this will rise to 68% by 2050. This increasing density of population, along with the increasing demand for immediate delivery of consumer and commercial products, risks adding to the severity of traffic congestion with the associated negative impacts on the economy, environment and health . However, there are also, arguably, environmental benefits of online shopping if this results in fewer people individually driving to shops.

Potential technical solutions

There are many different technical solutions that could be deployed to provide last mile delivery. No single solution suits all scenarios and some combination of these is likely to be required:

·         light vans: although mostly petrol or diesel now, in the future, electric or fuel-cell powered could be used in cities, towns and, to some extent, larger rural areas if refuelling is available. However, there are still very few ultra-low emission vans on the market and hydrogen refuelling stations are currently very scarce. Delivery hubs could, in the future, have hydrogen refuelling stations installed to address this

·         e-Cargo bikes and similar: these are suitable for the centre of cities where there are many small items to be delivered in a reasonably contained area, but offer few advantages over electric light vans for rural areas due to the distances, and hence time, involved and reduced density of deliveries. • autonomous ground vehicles: these have been trialled in several places, notably Milton Keynes and Greenwich in the UK and, whilst these are currently wheeled systems, robotic ‘dog-like’ systems that would not find steps problematic are also being considered. These could be deployed alongside vans, autonomous or otherwise, and would deliver the last few metres to the door or desk of the customer

·         drones: these are not considered suitable for urban areas due to potential congestion and currently are unable to be deployed due to regulation restricting their use to ‘line of sight’ of the operator, although work is underway to explore potential solutions such as collision avoidance systems. There is also a potential security concern around detecting which drones are being operated with malicious intent and which are legitimate delivery vehicles. If these issues can be resolved, drone delivery could be a good solution for rural areas due to the distances involved

·         tunnels and tubes with cargo pods on tracks (typically using linear motors): These would remove freight and logistics from the roads and, if the electricity to power these is non-fossil fuel derived, is non-polluting. However, this could require significant infrastructure investment. Integration into new construction projects such as HS2, or relatively cheap ‘cut and cover’ trench tunnels may be an option, although the cost of disruption to traffic and the community with the latter needs to be factored in to any business case

·         neighbourhood manufacturing sites employing 3D printing: such sites could be used by several suppliers collaboratively and could reduce delivery miles considerably for a range of suitable products made of standard materials. Although these base materials would still have to be shipped, this could still offer significant efficiencies. This has been demonstrated by one company with running shoes already, but one manufacturing site could theoretically print a wide range of products

System level issues

To enable planning decisions based on a full exploration of the best options for different scenarios, a “digital twin” of a town’s or city’s infrastructure could be used to model the different options. This work should include exploring ways of encouraging data sharing from commercial organisations. Their data could then be used to calibrate the model, and to measure the efficacy and predictive power of modelling with respect to reality. If such data were to be made available in real time then this opens the way to detecting unusual patterns of activity, and dynamically exploring alternative scenarios. This digital twin would allow infrastructure planners and delivery service providers to better understand the cost and benefit implications of the different options and would facilitate a system of systems approach to solution development.

 

E-commerce business models

Some of the transport impacts of e-commerce could be addressed by:

·         the physical internet concept, which aims to improve asset utilization in transport and logistics such as vans, trucks, and rail but also in warehouses, distribution hubs and other logistic resources and can be implemented in a last mile logistics scenario. The idle capacity of assets could be better used if they could be opened and made easily available for all of the stakeholders in the logistics chain, overcoming sector fragmentation, connecting logistics services and networks seamlessly. Freight transport and logistics services could be interconnected allowing a more flexible use of the resources, cargo consolidation and routing, in other words, creating a physical internet. This is still quite a new concept and the commercial difficulties are still to be resolved

·         incentivising customers to accept slightly longer delivery times, where this allows deliveries to be better consolidated across several customers in the same neighbourhood. This could be beneficial to both businesses and consumers and would also work with the physical internet concept

·         explicitly passing the true cost of delivery and return to the customer could reduce unnecessary over-ordering. However, if this is done unilaterally it is likely to negatively impact the competitiveness of the business. Consumers are attracted by so called ‘free delivery’ hence it is offered by many businesses

·         a mandatory charge, similar to that implemented by the government to discourage plastic carrier bag use, could be applied to all consumer deliveries and returns to encourage consumers to recognise their true business, societal and environmental cost, and hence encourage more sustainable behaviour

·         supporting improved customer purchasing decisions, particularly for clothes and shoe shopping, to reduce the volume of deliveries and returns. This could be achieved using basic techniques such as sizing based on measurements rather than labels (for example waist size 75cm rather than ‘size 12’) or linking home body scanning systems, currently used primarily for health and fitness, to online clothes retailers.

Recommendations

To facilitate the growth of e-commerce and delivery businesses whilst minimising any negative impacts on the UK transport system and environment, the SAC recommends that the DfT:

 

·         undertake or commission a study to explore the use of digital twins to determine their value to support the understanding of logistics and delivery solutions and test new approaches in a holistic way

·         recognise logistics as a more significant element of national infrastructure. The National Infrastructure Commission Freight Study report recommended establishing a new Freight Leadership Council, bringing together government and industry for accelerated progress on long term issues and this should be supported by DfT

·         consult the sector and the public on possible measures to reduce the negative impacts of last mile delivery and encourage more sustainable on-line shopping behaviours. This could include consideration of imposing a standard minimum delivery charge

·         encourage the research community (Research CouncilsInnovate UKConnected Places Catapult and others) to fund projects to explore more innovative ways of reducing the negative impact of e-commerce on the environment, possibly by instigating an Industrial Challenge Strategy Fund on this topic. Included could be demonstrators of neighbourhood collaborative manufactories using 3D printing, e-cargo bikes and tunnel/tube based delivery systems - recognising that solutions for peri-urban and rural environments can be very different to those for cities.

 

 

Last modified on Sunday, 21 June 2020 23:16
IoC