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Hitachi

Social Innovation

The evolution of last mile delivery

The growth of package deliveries, driven by e-commerce, is created a new term in transportation – the last mile. Here we look at some of the new technologies that are aiming to revolutionise the last mile

Today we expect to be able to order a product online and have it sitting in our hands in a matter of days - if not hours!

But have you ever wondered what toll that convenience takes on our road network, which must now support hundreds of thousands of deliveries every day?

Last mile delivery might not be something we think about often, but its evolution over the years is having a significant impact on our urban environment. The definition of last mile delivery is “the movement of goods from a transport hub to its final destination” and that element of the supply chain has boomed in line with E-commerce growth – an industry estimated to have been worth €153 billion to the UK economy in 2016.

The last mile is the least efficient element of most supply chains, with the final leg of the journey making up to 28% of a product’s total transportation cost. Added to this economic cost, congestion in urban areas, distance in remote areas, invalid or incorrect address details, hard-to-locate destinations and a lack of human presence to sign for deliveries mean the process is far from optimal.

The transportation industry is looking at ways to overcome this challenge, in the same way that over the last 150 years the horse and cart was displaced by the train, the car and the plane, turning days and weeks of transporting time into hours. With developments in artificial intelligence, a host of different autonomous delivery methods such as delivery drones and robots are being tested. These methods, though currently unproven, are expected to alleviate congestion and air pollution in cities. Amazon has started testing parcel delivery by drone and DHL is the first parcel service provider in the world to integrate a parcel copter in its delivery chain during a trial in Bavaria in 2016.

Starship Technologies, a developer of small, self-driving robotic delivery vehicles, rolled out its battery-powered mini delivery robots in a trial in London in 2016. The realisation of these ambitions may come sooner than we expect. In its report on the future of last mile delivery, McKinsey says we should “get ready for a world where autonomous vehicles deliver 80% of parcels”.

Yet drones and robots cannot fully take over last mile delivery and more traditional vehicles are still needed to transport goods over longer distances. It is hoped that the introduction of autonomous electric-powered vehicles to our streets will improve sustainability and efficiency. The UK government, for example, is running a trial of a platoon of self-driving trucks on public roads in 2018. Connected by Wi-Fi, the trucks will follow the lead of the head truck which will result in less braking and could cut carbon emissions by 10%. A number of companies, including Hitachi, are advancing autonomous vehicle technology to bring cleaner vehicles to the road.

Once upon a time, the fastest way to transport something from A to B was horse and cart – a look into the future shows something very different. New technologies, such as self-driving trucks, robots and drones are set to disrupt the transportation industry once again. On the advent of the fourth industrial revolution, it looks like technology is set to change last mile delivery as significantly as the first one did.