The Sustainable Last Mile – Reducing the Carbon Cost of Home Deliveries

The last mile is one of the most confusing legs of order movement and has the capacity to choke both – the environment with fuel emissions, and business revenues via cost leakages.

While the national freight activity in India is expected to grow about five-fold by 2050, the last mile emissions per delivery in India stand at 285 gCO2, which are significantly higher than 204 gCO2, the global weighted average.

This paints a grim picture for the country, where the last mile emissions in the 5 metro cities, namely – Delhi, Mumbai, Chennai, Kolkata, and Bangalore, exceed the cumulative emissions in Canada and France!

Further, as India moves towards an eCommerce penetration of 65.6% by 2025, having a coherent vision for a cost-effective, optimized, and sustainable last mile is assuming a dire stance!

Three-Pronged Approach for Efficient and Sustainable Last Mile

Right from order allocation to asset (vehicle and driver) selection, and dynamic routing – operational efficiency stems from multiple optimizations.

Smart logistics automation platforms can drastically reduce the carbon footprint and help logistics stakeholders achieve their sustainability goals by reducing the number of miles traveled, eliminating empty miles, increasing first-attempt deliveries, and preventing vehicle idling. Smart automation platforms improve resource utilization, thereby reducing trip volumes. Also, automation facilitates the digitization of the documents and paperwork (Proof of Deliveries, IDs, order-related documents, bills, invoices, etc.)

Smart Local Fulfillment

Accenture points out that local fulfillment excellence can boost sustainability in the last mile. New retail models in quick commerce such as dark stores and hyperlocal deliveries are energizing low-cost delivery operations in multiple segments, such as retail, groceries, medicine, QSRs, etc. 

Smart platforms with built-in AI algorithms can smartly allocate multiple orders to a single driver (using the most cost-efficient vehicle, generally a bicycle or even on foot) to fulfill such deliveries. Businesses can increase the per-driver deliveries by 14% which automatically reduces road travel.

Some other crucial functions in this category that facilitate smart delivery fulfillment include:

• Ensuring first-attempt deliveries via real-time customer communication in an omnichannel manner
• Reducing the number of returns by integrating visual proofs (such as images)
• Strategizing for RTOs, such as reducing the miles traveled for RTOs by marking the goods “available for sale” and storing them at the destination warehouse for the next order

Optimized Asset Use and Smart Routing

Using smart automation for automatic delivery route generation, vehicle capacity utilization, and maximizing the number of deliveries per vehicle can reduce road transportation costs by 12%. 

By considering the transportation costs as a function of vehicle movement, it is quite clear that optimized vehicle use smart routing can significantly reduce carbon emissions in the last mile. 

Sustainable Delivery Modes

For every delivery fulfillment, AI-powered logistics management platforms suggest the most profitable, resource-efficient, and eco-friendly modes of delivery, such as bicycles and EVs for shorter distances. 

The vehicle assignment is automated and stems from multiple delivery fulfillment constraints, such as delivery radius, vehicle make, fuel type, area codes, real-time road conditions, vehicle capacity, nature of goods being transported, etc.

So, an order coming from the corner shop is mostly going to be fulfilled via a bicycle or a walk-in door delivery.

Incorporating smart data analytics and business intelligence in the operations also empowers businesses to track their carbon footprint and energize efforts to reduce the same.

Last-Mile Excellence and Sustainability – The Roadmap & Key Considerations

Sustainability requires all ecosystem players to work together in smart and innovative ways as no single entity can create the sustainable last mile alone. Further, any approach toward reducing the carbon emissions in the delivery segment requires careful considerations of scalability, profitability, and feasibility. 

Recent studies suggest that India can not only reduce its logistics costs by 10 lakh crore but can also save 3 billion TOE of energy via freight efficiency.

The most viable approach to solving this complex environmental and logistical enigma is more aligned toward a hybrid policy, instead of zooming out only on cleaner energy sources.

With businesses leveraging multiple types of vehicles and delivery models, creating a highly sustainable last mile model for large-scale implementation is a daunting task. For instance, electric vehicles can reduce carbon emissions greatly but there is a lack of reliable information about fuel-saving technologies among fleet operators and a reluctance to invest in fuel-saving technologies and EVs is also there. 

Also, there is the need to enhance fuel consumption and emissions standards of ICE (internal combustion engines) vehicles and promote collaboration across multiple industry players to leverage smart technological solutions. Supportive policies such as pilot projects for large-scale EV deployment including a robust charging infrastructure network are also required. Hence, mass adoption of clean and green transportation requires a careful strategy for feasibility. 

Another critical consideration is local fulfillment excellence. Starting from the destination hub, the logistics stakeholders should opt for a highly controlled order allocation, capacity planning, asset movement, and routing system that is backed by smart AI/ML-powered platforms.

As the CEP industry alone is generating more than 2.8 billion pieces per annum, having a highly efficient, resilient, smart, and precisely orchestrated last mile is just the answer to a sustainable last mile.

While the automation and relevant eco-friendly policies from the government are definitely the way forward for a sustainable last mile, Deloitte states that educating the end-users – the shoppers and consumers – about the importance of clubbing their orders, smart management of multiple online orders, and ways to reduce returns are also essential.

Planning, managing, optimizing, educating, and learning along the way – the road to a sustainable last mile is a consistently evolving landscape that can definitely be traversed with smart collaboration and technological innovation.