Tech innovation and changing urban delivery networks
Cities are getting smarter through integrating new and evolving technologies. The improvement of digital platforms, implementation of wireless technology and use of big data analytics, has meant that data can be collected from transactions, devices, vehicles, distribution facilities, building envelopes and people, and subsequently analysed in real-time.
4 minutes to read
The European Commission defines a smart city as follows: A smart city is a place where traditional networks and services are made more efficient with the use of digital and telecommunication technologies for the benefit of its inhabitants and business. It means smarter urban transport networks and, more efficient ways to light and heat buildings.
What does this mean for urban logistics?
Logistics providers need to be prepared for drastic changes, especially in urban centres. Competition for land, traffic congestion and emissions are the drivers for changes to current distribution models, and innovative technologies are offering workable, cost-efficient solutions.
"The future of urban logistics will be dominated by connected, shared, autonomous, and electric solutions. "
These trends will be driven by emerging technologies such as IoT, Big Data, predictive analytics, cloud computing, crowdsourcing platforms and connected devices. As logistics operators embrace digital technologies, inventory management, distribution networks and supply chain optimisation will increasingly rely upon advanced analytics, automation, robotics, and AI.
Urban logistics operators can harness this data and technology to improve their operations.
"Technological innovation and digital capabilities are key to driving more sustainable and efficient urban logistics, both in terms of freight movements and warehousing operations; optimising delivery routes and transport modes as well as fulfilment and supply chain models"
Technology is enabling dynamic route planning, consolidation of deliveries and better utilisation of both warehouse and fleet capacity.
Despite technological advances offering potential sustainability and efficiency gains, particularly where we are looking at shared intelligence or shared capacity and consolidation of deliveries across companies, issues arise with privacy and security with respect to gathering, storing, analysing, and sharing data. There are many technological ideas and concepts, with various schemes such as decentralized warehouses or aggregating goods flows being trialled, but they are not yet functioning at scale.
We have investigated how some of these new, emerging technologies and interconnected digital concepts are set to change the urban logistics landscape.
Integrated systems and capacity sharing
Applying the smart cities concept to urban logistics, means building an integrated digital ecosystem where all the players from small bicycle courier firms to major global parcel carriers are participating. The sharing of data via a central platform allows for capacity sharing (load pooling) and could enable efficiency gain.
"Load pooling or capacity sharing requires an online system that matches vehicles with spare capacity and customers who require delivery space. At full potential, McKinsey believes load pooling in urban areas can reduce delivery costs by up to 25%"
Urban consolidation centres are a form of logistics pooling that will benefit from higher levels of data and software integration amongst users, from the optimisation of space usage to more efficient vehicle movement in and out of the facility.
Significant levels of cooperation amongst carriers across a city is not yet being seen and may be unrealistic. However, we are seeing a rising number of urban logistics partnerships. Typically, where larger global parcel carriers identify gaps in their network or offering and look to partner with a local delivery firm, or store network that can offer click & collect facilities. These partnerships often rely upon some degree of data sharing and integration of systems.
The Post Office has opened its branch network to parcel carrier firm DPD. This is the first time it has allowed an external carrier access to its network. DPD will offer a click & collect service, available at around 250 Post Offices before being rolled out to around 1,500 branches and will integrate with existing PO systems (used for transactions, accounting, and stocktaking). The partnership will allow DPD to offer more delivery options at the point of purchase, while the customers the choice to pick a branch close to their home.
Delivery drones and autonomous delivery vehicles
High levels of congestion in urban areas and potential security concerns mean that operating delivery drones within built up urban areas is not yet viable. Amazon recently cut back its Amazon Prime Air drone delivery business in the UK, which launched in 2016, signalling that the technology and regulatory environment may be some way off from enabling drone parcel deliveries.
However, aviation authorities in the US and in Japan have both recently relaxed rules regarding the use of drones within populated areas at night and the UK’s CAA (Civil Aviation Authority) have authorised delivery drone trials (to test the safety of allowing drones to be flown beyond the pilot’s line of sight). Could this be a step towards widespread adoption of delivery drones in urban areas? Delivery companies like UPS and Amazon have been funding and exploring drone technology solutions for years, though the technology may be better suited to servicing remote locations rather than urban ones. In May, the Royal Mail trialled scheduled autonomous flights for one month between the Cornish mainland and the Isles of Scilly, with the use of a drone to deliver parcels to remote communities on the islands.
UK high street retailer, Wilko recently announced a £3 million investment in autonomous delivery vehicle company StreetDrone, to bring autonomous deliveries to the last-mile. The investment will allow StreetDrone to accelerate the development of its autonomous delivery vehicle operations. StreetDrone is aiming to deploy driverless delivery vehicles on the UK’s roads by the end of 2023 and is working with UK-based vehicle safety agencies on defining industry standards.
Download Future Gazing 2021