The impact of last mile deliveries
12 December 2022
With the rapid growth of e-commerce and home shopping, last mile deliveries are the latest battleground in logistics
What is last mile delivery?
It’s the final stage of the delivery process, often from out-of-town warehouses, to the customer. It’s also the most costly part of the process, indeed analysts estimate that last mile deliveries often account for more than half of total shipping costs. Unlike normal logistics, where large amounts of cargo are transported long distances, ‘last mile’ involves the transportation of small parcel-sized goods to multiple destinations.
Last mile also has a disproportionate effect on the environment. Urban deliveries made by fleets of small petrol or diesel vans have downsides, including higher running costs, poor air quality, and higher CO2 emissions. What’s more, especially in densely populated areas, councils are imposing zero-emission transport zones: this impacts last mile costs and the choice of transport. No wonder that last mile delivery companies are actively turning to small electric delivery vehicles as a solution.
Electric = lower cost of ownership
Fuel is a major operational expense, and even more so in today’s environment. The actual cost per km of driving using electricity is significantly less than petrol or diesel, in fact it’s about half – as is made clear on this comparison chart produced by the Belgian government – a valuable benefit for businesses.
Vehicle maintenance is another major cost of running a last mile delivery fleet. Electric vehicles cost much less to maintain than internal combustion engine (ICE) vehicles, as they have many fewer moving parts. In fact, the average EV has about 20 moving parts compared to 2,000 moving parts in an ICE vehicle. The result is electric vehicles are 70% cheaper to maintain. They also require no oil refills or filter changes, and battery packs can last up to 300,000km.
Electric = better for the environment
According to a report by the European Environment Agency, transport was responsible for about a quarter of the EU’s total CO2 emissions in 2019. In fact, transport is the only sector where greenhouse gas emissions have increased during the past three decades, rising 33.5% between 1990 and 2019.
In general, EVs don’t cause health problems as they don’t pollute the environment. In Europe, 37.5% of electricity production – the average across the EU – comes from renewables, with wind (36%), hydro (33%) and solar (14%) producing the lion’s share of the electricity. There’s also nuclear power plants producing electricity and fossil fuels, but most of those emissions are not released into urban environments.
Who’s switching to electric?
Many suppliers and logistics companies have already chosen to go electric, including Amazon (100,000 vehicles have been ordered – they are looking to achieve full fleet implementation by 2024), and UPS (10,000 vehicles ordered – they also want to launch by 2024). And also Albert Heijn in the Netherlands.
The Dutch supermarket chain says that by the end of 2022, it will stock its supermarkets in the city centre of The Hague and deliver groceries there using only electric vehicles. And in the course of 2023, will achieve this in the city centres of Rotterdam, Utrecht and Amsterdam. Albert Heijn says it is mainly focused on cities with zero-emission zones where only fully-electric vehicles will be allowed to drive, particularly as 14 Dutch municipalities plan to introduce these zones by 2025.
This means that Albert Heijn and its logistics partners are starting to use a large number of electric delivery vans and trucks, including Addax, for last mile grocery deliveries.
Electric = quieter and cleaner
Constantijn Ninck Blok, Director Logistics & Supply Chain at Albert Heijn confirms: “The demand for transport is growing, partly due to the popularity of home delivery. At the same time, we want to reduce CO2 emissions as quickly as possible. We see it as our responsibility to take major steps in this direction. This can only be achieved through good cooperation and it is therefore fantastic that we are now doing this together with our transport partners in the four major inner cities. And we are not finished yet, our ambition goes further: ever quieter, cleaner and of course focused on convenience, so with sufficient availability, and always on time, for our customers.”