OneRail

Sustainability: How to Reduce Emissions in Last Mile Delivery

Your warehouses buzz with activity, and your shelves gleam with perfectly stocked inventory. But let’s cut to the chase — none of that matters if you can’t get products to your customers’ doorsteps. Last mile delivery isn’t just another cog in the machine; it’s the beating heart of your entire operation. Your fleet hits the streets daily, weaving through a chaotic tangle of addresses, guzzling fuel and racing against time. All while bleeding you dry, gobbling up a staggering 53% of your total shipping costs

And that’s not even the worst part. With every package delivered, your carbon footprint grows. Your fleet has become a significant polluter, pumping out emissions at an alarming rate. The clock’s ticking, and the pressure’s mounting. If you don’t tackle this final mile delivery challenge head-on, you might as well watch your business choke on CO2. So, what’s your game plan? 

The Current State of Last Mile Emissions

“Going the extra mile” was once just a saying, but now, this catchphrase and state of mind is costing us — and the planet — big time. Last mile delivery is gobbling up 40% of all e-commerce emissions. Worse? Keep this up; you’re looking at a 32% jump in delivery traffic emissions by 2030. How can you turn the tide in your favor?

Tech: The New Co-Pilot in Last Mile Delivery

Remember how your grandparents used paper maps for road trips? Well, last mile delivery is getting a serious tech upgrade. IoT sensors and AI are becoming the ultimate backseat drivers, but in a good way. They’re mapping out routes so smart that they’re squeezing out every last drop of efficiency.

This tech boom will still go strong for the foreseeable future, too. The IoT market in smart cities could hit a mind-boggling $931.5 billion by 2032, growing at a 20.5% CAGR. Think less time twiddling thumbs in traffic and more high-fiving over record delivery times.

Blockchain is also stepping in to solve those he said/she said delivery disputes. And AI? It’s like having a super-intern who never takes a break, crafting routes so clever they’re trimming fuel costs by up to 20%. That’s not just pocket change — it’s serious money back in your business’ wallet.

The Big Guns: How Amazon, IKEA & DHL Are Making the Last Mile Cleaner

Look no further than industry giants that aren’t just talking about change but driving it (literally) for motivation.

Amazon’s fleet is starting to look like something out of a sci-fi flick. They’ve already rolled out 15,000 electric delivery vans and are gunning for 100,000 by 2030. At the same time, FedEx plans to convert its entire parcel pickup and delivery fleet to electric vehicles by 2040

Meanwhile, not content with just helping us assemble furniture, IKEA is assembling a cleaner future. They’re aiming to slash their greenhouse gas emissions in half by 2030.  And DHL? They’re going all in, pledging to zero out their greenhouse gas emissions by 2050. In the meantime, they’re pouring €200 million (218.65 million USD) into fossil fuel alternatives and experimenting with sustainable aviation fuel that could cut air transport emissions by up to 80%.

Strategies for Emission Reduction 

If you’re ready to slash your last mile delivery’s carbon footprint but don’t know where to start, fear not — smart strategies can help you cut costs and emissions in one fell swoop: going electric, optimizing routes and consolidating deliveries. 

Electrifying Your Fleet: The Road to Cleaner Deliveries

The future of last mile logistics is electric, and the numbers don’t lie. The EV market for last mile deliveries is set to grow at a 16% compound annual growth rate from 2023 to 2028. Why the surge? EVs offer a powerful solution to curb emissions and boost efficiency.

Consider this: An average company running just six delivery vans pumps out about 1,200 kg of carbon annually, or 5% of the entire supply chain’s carbon footprint! But with EVs, you can slash those numbers dramatically.

The shift to electric also ignites a full-scale transformation of the logistics ecosystem. Smart technologies like route optimization algorithms, real-time tracking and telematics systems are becoming standard features in EV fleets to help cut emissions while streamlining operations and boosting bottom lines.

That said, the U.S. will need over 42.2 million charge ports by 2035 to keep up with the projected 78.5 million EVs hitting the roads. However, with the government stepping in with up to $7.5 billion in funding for EV charging infrastructure through the Infrastructure Investment and Jobs Act, the road there looks less overwhelming. 

Optimizing Routes & Loads: Small Changes, Big Impact

While electrification is making waves, pay attention to the power of smart logistics. Simple tweaks to your delivery strategies can yield impressive results.

As we mentioned earlier, route optimization software alone can slash fuel consumption by up to 20%. That’s a direct hit to your emissions and a boost to your wallet. But why stop there? Let’s talk consolidation.

One U.S. food and agriculture company cut its emissions by 18% — nearly 8 million metric tons of CO2 — simply by consolidating 53 sites down to seven; imagine what similar strategies could do for your business. 

Freight consolidation packs a punch, too. By increasing delivery lead times and capturing underutilized capacity, we could potentially cut freight truck emissions by 100 million tons per year — about 20% of all U.S. freight emissions!

Remember to right-size your vehicles. In congested urban areas, electric-assist cargo bikes can outperform diesel vans for typical parcel deliveries. For larger loads, optimizing charging strategies for electric delivery vehicles can lower greenhouse gas emissions by up to 37%.

Lastly, consider batching deliveries. Integrated scheduling that aligns production, distribution and delivery times can minimize distribution costs and fuel consumption. Some companies have even cut annual emissions by 280 kilotons — equivalent to taking 60,000 cars off the road — by mixing transport modes like shifting from road to rail freight.    

The Role of Policy & Regulation

We also can’t talk about making the world of last mile delivery cleaner and more sustainable without considering the role of policy and regulation in driving this eco revolution. 

Green Means Go: How Government Incentives Are Turbocharging Sustainable Delivery

The push toward eco-friendly last mile delivery gains momentum, backed by substantial government support. The Biden-Harris Administration’s $4 billion in tax credits for clean energy manufacturing signals a clear priority: green technology adoption, including electric vehicles (EVs) for deliveries. Governments worldwide sweeten the deal for businesses embracing green initiatives.

These incentives change the game. Many companies find the financial benefits of switching to EVs or other green technologies outweigh the initial costs. New pollution standards for cars promise to avoid over 7 billion tons of carbon emissions, yielding nearly $100 billion in annual net societal benefits.

City Smarts: Urban Planning That Works for You & the Planet

Cities are getting smarter, and that’s great news for your bottom line. Urban planners are cooking up strategies that could save U.S. businesses up to $2 trillion in transport costs by 2050. Imagine shaving $2,000 off your annual expenses for each urban route — that adds up fast.

Yet it’s not just about saving money. Cities are reimagining themselves with your needs in mind. They’re creating employment and life circles within a 5-6 km radius, meaning shorter, more efficient delivery routes for you. At the same time, major cities from New York to London are transforming curbside management. Think less time circling for parking, faster deliveries, happier customers and fewer emissions in the process. 

Future Trends and Predictions 

The last mile delivery world is changing faster than you can say “free shipping.” So if you want to slash those pesky scope emissions and win over eco-conscious customers, you’ve got to stay ahead of the curve. Here are five trends that’ll have you delivering packages and saving the planet in no time:

  • Autonomous Vehicles Take the Wheel: Picture tiny robots and self-driving cars zipping through your city, delivering packages like nobody’s business. It’s not science fiction but a cold, hard reality that can help optimize routes, slash delivery times and significantly reduce emissions. The autonomous last mile delivery market could skyrocket from $20.52 billion in 2024 to $134.90 billion by 2032. Even better? This tech could slash delivery costs by up to 75% in the long run.
  • AI-Powered Route Optimization: Artificial intelligence is becoming the secret weapon for efficient deliveries. AI systems crunch massive amounts of data on traffic, weather and customer habits to plot the perfect routes. The result? Up to 20% improved delivery efficiency, fewer wasted trips and a major drop in fuel consumption.
  • Teaming Up for Eco-Friendly Deliveries: Collaboration is key to a sustainable future. Retailers, logistics providers and even competitors are joining forces to consolidate deliveries and maximize vehicle utilization. It’s like carpooling but for packages. Less traffic means fewer emissions, and you’ll make new business friends along the way.
  • Hyperlocal Fulfillment Centers: The era of massive, centralized warehouses is giving way to smaller, strategically placed fulfillment hubs. These neighborhood-based centers dramatically shorten delivery distances, leading to major emissions reductions. A bonus? Nearly 80% of customers want ultrafast same-day delivery, which these local hubs enable.
  • Eco-Conscious Consumers Drive Change: Your customers care about the planet and vote with their wallets. A staggering 77% of consumers worry about the environmental impact of their purchases, with 44% actively seeking out sustainable brands. Offering sustainable delivery options is both good for the Earth and a powerful way to build customer loyalty and stand out from the competition.   

From Last Mile to Green Mile, How You Can Pave the Way for a Sustainable Future

We’ve covered a lot of ground, haven’t we? From electric vans to AI-powered delivery routes, the world of last mile delivery is transforming before our eyes. Simply getting packages to doorsteps is only half the battle nowadays. You need to do it in a way that doesn’t leave our planet gasping for air. The big players like Amazon and DHL are flexing their green muscles, but here’s the kicker: Every business, big or small, has a role to play in this eco-friendly marathon, including yours. 

The road to sustainability isn’t one you can travel alone. It requires collaboration, investment and a willingness to embrace change. That’s where last mile delivery companies like OneRail come in, offering a comprehensive suite of solutions from a vast courier network of over 12 million vetted drivers to the cutting-edge OmniPoint® Platform. When you leverage such technologies, you not only meet today’s challenges, but also position yourself as a leader in this eco-friendly revolution. 

The time to act is now — every package delivered sustainably is a step toward a cleaner, more efficient future. So why wait? Schedule a demo with OneRail to take the first step on your path to greener last mile delivery, and turn your sustainability goals into reality while becoming part of the solution.

 

See how OneRail can
simplify your supply chain.

Let's Talk

Platform

OmniPoint™ Platform

Our data-driven visibility solution is architected on the trusted Microsoft Azure platform.

Schedule a Demo

See OneRail in action, and take the first step toward a connected supply chain.

Services

Services

Our team of technologists optimizes your last mile with customized solutions for a quick time-to-value.

Get Started

Dig into the details with a no-risk Value Analysis.

Industries

Industries

The world’s largest brands across major industries rely on our adaptable, scalable delivery solution.

TMS White Paper

Learn what’s missing from your TMS, and what customers are looking for in last mile delivery.

Let's Talk