Ice Break Shipping CEO Augusto Beato says that logistics planners need to adjust to the growing e-commerce industry to best address last mile logistic woes.
Beato, who is also the CEO of Portland SEO, noted that other than an increase in the number of vehicles caused by e-commerce, trucks delivering online purchases make more stops that slow down traffic.
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He cited an MIT report that found e-commerce shipments typically consist of 50 to 150 stops per day while beverage distributors to commercial clients only have routes of 10 to 15 deliveries.
Beato also pointed out that since most e-commerce deliveries require that the customer be home to receive the package, it often results in delivery failure, which adds to complexity and cost.
“You often need to schedule deliveries for customer specific time windows, and there’s a greater risk the customer will not be home,” says Matthias Winkenbach, a research scientist at MIT’s Center for Transportation and Logistics, and director of the Megacities Logistics Lab.
The growing congestion of cities also creates challenges in last-mile logistics strategies, which have been complicated by increasing gridlock in fast-growing megacities even before the e-commerce boom.
In recent decades, logistics centers have moved from the cities to the exurbs, due in part to lower real estate costs. With increasing shipments in urban areas, however, there are now more multi-tier distribution systems, in which hubs are augmented with smaller logistic centers and fulfillment operations in the city.
Retailers and delivery firms are also starting to augment their fleets by outsourcing delivery to third-party services.
Route planners often assume that drivers can park the vehicle in front of the customer’s house, but this is often not the case. The drivers know where they can potentially park, which might be three blocks away, but that information rarely makes it into the planning process.
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