E-commerce and home delivery are now an integral part of our lives, with over 80% of U.S. consumers shopping online in 2022. Consumers are attracted to the convenience and efficiency of the digital marketplace, but while demand for faster delivery options is increasing, there are also growing concerns about the environmental impact and sustainability of last mile delivery. There is increasing pressure from legislators and consumers to decrease carbon emissions and establish eco-friendly delivery practices while simultaneously delivering goods quickly and efficiently. This creates a complicated challenge for retailers and shippers, but companies must be willing to take action toward sustainability to remain competitive in the marketplace.
In this blog, we will explore the challenges shippers face in sustainable last mile delivery, best practices for improving sustainability and how technology is helping to drive sustainable delivery initiatives through optimization.
Challenges in Last Mile Delivery Sustainability
Sustainable last mile delivery is an important supply chain trend that will continue gaining momentum in the years ahead. Consumers and policymakers are increasingly aware of the supply chain’s environmental impact. They are demanding more oversight and improvements toward sustainability, which present distinct challenges for shippers and retailers.
Supply chain greenhouse gas emissions typically make up 80% of a retail company’s total emissions. As demand for last mile delivery grows, so does the number of delivery vehicles needed to meet increasing expectations for speed, resulting in more traffic congestion and even greater last mile carbon emissions. This is worse for food and grocery last mile delivery, as temperature-controlled vehicles create more emissions than non-refrigerated trucks. Meanwhile, governmental regulations and public pressure to minimize carbon footprints are gaining momentum, creating an enormous challenge for companies to find solutions and move toward sustainable last mile delivery.
Complex Route Planning
Last mile route planning is extremely complex, and the addition of more stops, more drivers, and more vehicles presents even greater challenges to delivery sustainability. Traditional static route planning is inflexible to changes, cancellations, added stops and detours, and can result in unnecessary miles, wasted space in vehicles, excessive carbon emissions and increased fuel costs. Optimizing route planning is critical to improving last mile sustainability metrics.
E-commerce and home delivery generated 2.1 billion pounds of plastic packing waste in 2019, a total that is estimated to reach over 4.5 billion pounds by 2025. Non-biodegradable packaging materials like plastic and styrofoam take approximately 500 years to decompose and are increasingly criticized by policymakers and consumers alike. Identifying alternative packaging options and prioritizing the use of recyclable materials is essential for last mile sustainability.
Best Practices for Last Mile Delivery Sustainability
Consumer demand for last mile delivery and eco-friendly delivery are increasing simultaneously, putting pressure on retailers and manufacturers to establish sustainable last mile delivery standards. This list of best practices provides tips and strategies to help companies reduce their environmental footprint, while delivering goods quickly and efficiently.
Telematic devices like electronic logging devices (ELDs) are attached to delivery vehicles to record driving hours, distance and behaviors. Telematic devices offer immediate feedback on Hours of Service (HOS), driver location and vehicle speed, but also provide valuable data to improve two critical last mile sustainability metrics: fuel efficiency and empty miles.
- Fuel efficiency can be calculated through refuel and miles-driven data and can help identify poor fuel usage, due to driver practices or inefficient routing.
- Empty miles can be calculated as a percentage of total miles that an on-duty vehicle traveled without goods.
Utilizing telematics data to identify issues in fuel consumption and empty miles is essential when developing sustainable last mile delivery programs.
Establish a Multimodal Distribution Network
Multimodal transport is well established as a key component in the global supply chain, but it can also be utilized for distribution models to provide greater flexibility, reduce costs, and improve last mile sustainability and efficiency metrics. Multimodal distribution models employ multiple modes of transport running under a single contract to deliver goods to the final destination and are customized to meet the time, cost or efficiency expectations defined by the shipper or end customer. Multimodal route optimization can improve last mile sustainability by prioritizing eco-friendly vehicles and couriers, eliminating unnecessary miles and reducing total carbon emissions.
Shippers committed to last mile sustainability must consider packaging materials and work toward implementing the “3 Rs” that have long defined waste management: Reduce, Reuse and Recycle.
- Reducing the amount of packaging with smaller boxes or less stuffing minimizes waste and can reduce overall weight and improve shipping costs.
- Packaging that can be reused for shipping returns or another consumer use further minimizes waste.
- Utilizing recyclable packaging materials like paper, cardboard or compostable bags is easy to implement and greatly improves the last mile carbon footprint.
Eco-friendly packaging is undoubtedly beneficial for the environment, but it is becoming increasingly important for brand sentiment as well. A 2022 survey found that 86% of consumers are more likely to purchase from a retailer that uses sustainable packaging over a retailer that doesn’t.
Measure and Monitor
Data is essential to understanding the environmental impact of last mile delivery. Establishing KPIs and sustainability metrics helps identify areas for improvement and track progress toward sustainability goals. These metrics and KPIs may include fuel consumption, carbon emissions per month or per delivery, amount of packaging used, and missed delivery or redelivery percentages. By consistently collecting and evaluating these metrics, companies can better understand their last mile environmental impact and take steps to improve eco-friendly delivery.
Partner with Green Companies
Partnering with companies that have a strong focus on sustainability and environmental stewardship can greatly improve a retailer’s carbon footprint. Suppliers who sustainably source materials and transportation services from providers who limit carbon emissions are essential to establishing eco-friendly brands and products. Technology partners that drive logistics efficiency can further support last mile sustainability through route optimization, advanced data analytics and high-level supply chain visibility.
Technology Solutions for Last Mile Delivery Sustainability
Like many other facets of the supply chain, technology can play a pivotal role in improving last mile sustainability. Shippers should look for technology solutions with several key features:
Multimodal Route Optimization
Complex supply chains require multiple modes of transportation to move goods efficiently, but sustainably managing multimodal networks can be challenging, particularly in the last mile. Technology that delivers one point of contact between courier, parcel, LTL and FTL providers simplifies last mile operations and ensures the best mode of transportation for every shipment. API-driven last mile solutions can provide optimized route planning based on a complex set of rules to guarantee that every shipment is optimized, cost-effective and meets eco-friendly last mile delivery standards.
Tracking & Exceptions Management
Missed deliveries, redeliveries and unexpected route delays can add substantial time and miles to routes and dramatically impact last mile sustainability metrics. Real-time delivery tracking technology helps fill the gaps in last mile risk management with smart exception identification and alerts. This allows logistics teams to proactively address issues and reduce missed deliveries and additional miles to keep carbon emissions to a minimum.
The growing demand for home delivery frequently requires onboarding additional couriers and delivery partners. However, a diversified and fragmented last mile network can present sustainability challenges. Pricing, routing, dispatching and tracking multiple providers can be a logistical nightmare. Technology solutions that integrate courier networks to standardize delivery processes can greatly improve eco-friendly last mile initiatives.
Sustainable last mile delivery requires advanced data analytics to ensure continuous improvement and to form predictive models that drive future decision-making. Predictive analytics allows shippers to move beyond the visibility of current sustainability issues and toward anticipation of future problems, opening the door for proactive risk mitigation and sustainability improvements.
Improve Eco-Friendly Delivery & Last Mile Optimization with OneRail
In today’s high-demand e-commerce market, seamless and sustainable last mile delivery is essential to meeting consumer expectations and building brand loyalty. Technology solutions to centralize last mile operations deliver the real-time data companies need to meet sustainable delivery goals and drive efficiency. OneRail is a technology-driven last mile solution that gives retailers the tools they need to optimize delivery and improve last mile sustainability metrics. With OneRail, shippers can count on:
- A centralized platform to access an API-integrated multimodal network,
- Automated multimodal route optimization to ensure the best courier for every delivery,
- Real-time tracking and a dedicated Exceptions Assist™ team to address issues as they arise, and
- Actionable data insights to drive continuous improvement throughout the last mile.
Ready to learn more about OneRail’s last mile optimization solutions and improve your delivery sustainability metrics? Schedule a demo today.