Key development strategies need implementation in logistics industry

So-called last-mile delivery, an aspect of logistics that has transformed significantly in the past two years, is one of the most prominent ways of promoting sustainable development goals and minimising carbon emissions, says research and consulting firm Frost and Sullivan research director Craig Parker.

“To achieve the goal of sustainable development in South Africa, there is a need for a reduction in carbon emissions; however, the last-mile delivery landscape in Africa is littered with ‘smoking’ vehicles and two-wheelers.”

South Africa, therefore, has a carbon emission crisis and Parker says it will be only a matter of time before private companies are pressurised to minimise their carbon emissions.

He suggests that South Africa hone in on opportunities, such as facilitating fleet electrification, as there is significant potential to facilitate electric two-wheeler fleets in urban areas.

Fleet electrification has been achieved by logistics companies, such as DHL, in Europe, Parker highlights, adding that such electrification may also involve the construction of dedicated solar charging facilities for the fleets.

Therefore, this shift in logistics, and the development of smart cities – urban areas in which different technologies and electronic methods are used to improve operational efficiency – needs to be part of the agenda in South Africa, he adds.

This will ensure not only that sustainable development goals are achieved but that carbon emissions are also reduced.

Moreover, the involvement of logistics companies will enable cities to plan their technology rollout and sustainability roadmaps so that they are aligned with smart city initiatives.

With the steady increase in last-mile delivery demand in urban areas, smart city mobility planning should also include the integration of these fleets’ requirements into the technology and infrastructure.

Parker cites the Paris Smart City 2050 initiatives, which aim to create a carbon-neutral environment by 2050, as an example.

However, the initiatives require 68 new metro stations to replace almost 5 000 diesel buses “and also plan to ban fuel cars by 2030 and increase the number of electrical vehicle charging points to 12 000 by 2023 to help achieve the goals of a carbon-neutral environment”, he adds.

Technological Advancements

While it is evident that new technology in the delivery chain is growing in international markets, this will remain a challenge in developing countries, with last-mile operators facing major challenges as competition and congestion increase, says Parker.

These challenges include increasing demands from customers, as “a two- to three-day delivery time is no longer acceptable. Same-day, even same-hour delivery is now increasingly the norm in developed economies,” he notes.

As the volume of demand increases, it becomes more economically viable to enable faster delivery times.

Parker says there are many ways through which logistics providers can mitigate these challenges.

Parcel lockers at centralised locations can reduce the time and cost of delivery, minimising delivery failure rates. This measure can reduce labour time by almost 70% and reduce parcel cost by up to 30%, he adds.

Night-time deliveries could reduce costs by 50%. Parker highlights the Off Hour Delivery pilot programme, in New York, which is showing “great success”, as an example in this regard.

“There are also solutions for retail outlets, whereby the company’s outlets could turn into ‘dark stores’, with no customers, just fulfilling delivery and pickup through app orders.”

He also suggests delivery drones, for which there has been “a massive uptick”. Companies such as e-commerce company JD.com, e-commerce and online retail company Rakuten, delivery and logistics company SF Express, and post, logistics and courier company Japan Post are using drones for some point-to-point deliveries and product returns.

JD.com also uses autonomous technologies to deliver small orders using, for example, a small autonomous delivery vehicle.

Parker therefore concludes by highlighting the importance of not only the development of last-mile delivery but how new technologies and innovative solutions can help achieve it.