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05 December 17

How the rise of E-commerce has changed the strategy of last mile delivery?

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E-commerce is growing every year and shows no signs of slowing down: the e-commerce companies truly exploded in the late 1990s thanks to eBay and Amazon. eBay signed its first third-party licensing deal in November 1996, and it went on to host two million online auctions in January 1997 (compared to 250,000 in all of 1996).

E-commerce sales in the U.S. eclipsed $97 billion during the second quarter of 2016, which marked almost nearly 16% year-over-year (YoY) growth, according to the U.S. Department of Commerce. This was the greatest YoY increase since Q3 2014.


As consequence of the increasing of the demand of E-commerce, the logistics field is interested in improving innovation: thanks to the integration with Smart Devices became easier to have a complete control over the goods delivery and the new solutions gave a contribution to the reduction of the transit-time.

For the bigger operators the major problems, both about costs and inefficiency level of services provided, come from the so-called Last Mile, the final part of expedition and frequently the hardest to be controlled and organized.

The big topic is the research of green solutions with innovative tools. Almost 25 percent of consumers are willing to pay significant premiums for the privilege of same-day or instant delivery.

More than 50 %of consumers choose delivery options merely based on price while another 20 % prefer the cheapest available option of home delivery, according to Mckinsey.

As example of new technology, the drones are seen by the society as a  concrete alternative to the normal means of delivery. Considerating the evolution of technologies the drones can play an important role especially in the rural area thanks to the open space in respect to the big cities.

Another important role will be played by the Bicycle, especially in the cities where factors like traffics and narrow space are not the perfect conditions for medium-large vehicles. This solution take in consideration also the environment respect, utilizing means of transport  at Zero Emission.

Here below a description of new models:

  • Autonomus aircraft, e.g copters or vertically starting planes, carrt parcels (up to 15 kg) to their destination along the most direct route and at relatively high average speed, Like droids and AGVs, they too need to be supervised. We belive that one supervisor per roughly eight drones is reasonables assumption.
  • Crowdsourcing. Any member who has signed up as a driver to the crowdsourcing network can choose to complete a specific delivery order. The advantage of this model is its flexibility in supply, especially in covering peaks and troughs, the multipurpose use of certain assets such as cars, as well as the low investment requirements for parcel companies. Furthermore, some companies hope to create synergies beyond regular parcel delivery, e.g., with taxi services.
  • Autonomous ground vehicles (AGVs) with lockers. AGVs deliver parcels without any human intervention. Customers are notified of the exact arrival time. Upon arrival at their door, customers are asked to pick up the parcel from the specified locker mounted on the van or truck – picture a mobile parcel locker. Granted, such vehicles would need to be supervised. We assume that a central supervisor could manage roughly eight to ten AGVs
  • Bike couriers. Couriers employed by the parcel service provider deliver a small number of parcels by bike. Today, this is often seen in point-to point delivery, especilly for B2B documents and prepared food.

The future last mile offers great opportunity for existing and new space for service providers in the field, given the fast-expected growth of between 5 percent in Germany and 17 percent p.a. in China over the next years. However, before companies can move ahead it is crucial to develop a strategy that suits the market environment and the company’s strength.