State of Green Business
Cities mobilize to avert 'peak delivery' congestion
The following is adapted from State of Green Business 2018, published by GreenBiz in partnership with Trucost.
Cities across the world are congested enough. But the growing wave of online and app-based commerce could reach a tipping point. That's bad news for local economies and the companies that operate within them.
Online sales in the United States will grow from an estimated $409 billion to over $603 billion in 2021. With those sales come material deliveries. The United States alone accounted for an annual 13 billion parcel shipments — just over 40 packages a year for every man, woman and child in America — and that number likely will double in the next three to four years.
That double-parked delivery van is a branded problem hiding in plain sight. In Manhattan alone, UPS and FedEx pay millions every year in parking fees, and commuters curse the congestion. Hidden from view are app-based delivery services from Amazon and Uber that add more to the congestion as they deploy passenger vehicles with even fewer opportunities to consolidate multiple deliveries.
Until now, cities mostly have conducted in-depth studies focused on public transit, bike lanes and walkability. The continued increase in online and app-based deliveries points to the need for an urban logistics plan if cities want to avoid getting choked with more pollution and congestion.
One solution highlighted by McKinsey at the GreenBiz VERGE 17 conference is the construction of Urban Consolidation Centers (UCC), which are located outside city centers and receive orders from numerous suppliers and retailers. Goods are consolidated to fill trucks to their maximum capacity for transport and staging in the city.
Getting into the city will pose another challenge as urban areas establish low-emissions zones either to ban certain types of vehicles or seek to regulate them with congestion charging fees. Cities such as Paris are planning to ban diesel cars entirely by 2024 and all petrol-fueled cars by 2030. This will spur the electrification of fleets as companies commission all-electric delivery vans from startups such as Workhorse and Chanje. Additional efficiencies will come as companies such as Starsky Robotics roll out technology that lets a trained driver use remote control to steer the truck from a highway exit to its final destination.
Once a truck is staged, a package still needs to get to its final address. In the German city of Hamburg, UPS sends out electric vehicles that act as micro depots and then uses walkers, conventional tricycles and eBikes to make deliveries throughout the city center and in pedestrian-only zones. In the United States, five states are looking to Starship Technologies' robots to make those doorstep deliveries.
The streets aren't the only place where multi-modal delivery systems will operate. Drones as a standalone solution might not be deployable at a large scale, but drones taking off from delivery vans might solve a lot of problems in urban delivery. Japan's Chiba City plans to eliminate delivery vans entirely as large drones bring packages from a portside warehouse, dropping them off at a staging area where smaller drones deliver packages to balconies on high-rise condominiums.
Getting to the last mile is not the only challenge being addressed by technology. Automated delivery lockers — some in building lobbies and some driven by autonomous vehicles — can be opened by a smartphone app. Volvo and other automobile manufacturers are experimenting with in-car delivery services, where a single-use digital key provides access for deliveries in the trunk of a car. Amazon and Walmart are even asking permission to enter your home.
For all of this to work, we’ll need better data. The city of Seattle has partnered with the University of Washington's Urban Freight Lab to collect data that will help them tackle the final 50 feet from a city-owned curb to someone’s front door. MIT's Megacities Logistics Lab has created open-source online maps to provide details of urban supply chains. Cities may begin to require app-based services such as Uber and Lyft to expose their now-private data. That, combined with both mobile and stationary sensors in urban areas, will help planners identify opportunities and monitor the impact of pilot programs.
The critical factor to keep urban growth from gridlock will be city leaders embracing multi-stakeholder collaboration. New York City and Seattle realized they couldn’t go it alone when they developed comprehensive mobility plans that incorporated logistics planning. This is reinforced by business leaders in research conducted by GreenBiz, where 72 percent of those surveyed acknowledged that businesses should work closely with city officials in identifying and addressing urban environmental and social challenges.
Ever-growing urban centers are at a crossroads. To avoid making decisions or passing laws that result in unintended consequences, city officials need to take the lead in engaging and educating stakeholders on the tradeoffs involved in moving people in addition to the goods and services they require for a healthy, safe and equitable environment.
Not to mention enjoying the wonder of same-day delivery.