The sustainability of the last-mile e-commerce delivery on ZIP level

Problem and research questions
E-commerce is a growing sector for years and received an additional boost during the COVID-19 pandemic. The online sales and related deliveries of parcels are there to stay. However, with their growth, the sector and the related stakeholders are confronted with challenges, of which the sustainability is a main one. Despite its global character, the focus on the impact of e-commerce is currently on its last mile, as (1) consumers are confronted with the generated nuisances and pollution, (2) governments are identifying the last mile of parcel deliveries as a front-runner in the shift towards zero-emission freight distribution and (3) logistic service providers are confronted with high costs and increasing policy interventions. Many solutions already exist, yet the question arises what is most sustainable and in which circumstances. Research shows that the most sustainable delivery option (home, locker, collection point, physical store) depends on the urban/rural environment, the retail brand and the consumer (transport and omnichannel). Behaviour. No wonder that governments, logistic service providers, retailers and consumers don’t know which delivery option to choose or favorize as most sustainable. The need for more additional and especially more accessible and understandable insights in the sustainability of different e-commerce delivery options is very present. This paper presents the scientific development of such sustainability assessment tool for last-mile deliveries of parcels. The tool works for the Belgian territory and ZIP level and considers also failed deliveries and retours.

Methodology, research strategy
The sustainability assessment tool is based on the concept of transport-related external costs. The sustainability consists of the impact of air pollution, climate change, infrastructure, noise nuisance, congestion, accidents and well-to-tank processes. For the calculation reference figures are used and linked to transport performances (vehicle-kilometer) by different modes in different circumstances. Next, the tool combines different methodologies to produce the necessary transport performance data, as the tool considers three main different transport flows. Firstly, retailers are responsible for some (parts of) flows of parcels. The most obvious one is the transport of their parcels to their physical stores which function as collection points for their online sales. For these flows retailers possess a lot of data which enable the sustainability assessment calculation. Secondly, logistic service providers are performing transport activities to get the parcels to homes, lockers and collection points. The data of these flows are commercially sensitive and therefore hard to get. Consequently the transport model TRABAM is used to simulate the transport operations of the logistic service providers. TRABAM is implemented in open-source software MATSim and based on the Freight extension. Freight carriers are, as agents, performing transport operations on a one-day basis. The agents are generating day-plans with the aim to deliver all
their incoming orders in the most successful way (economically). Each agent considers routing, departure time, stops, stop sequence and mode- and vehicle-choice in the optimization process. Thirdly and finally consumer movements are based on a large and representative survey amongst almost 4.500 respondents.

Major findings
The results show that the most sustainable delivery option varies heavily between retail brands and within retail brands on ZIP level. In general, physical stores are in absolute terms the most sustainable delivery option as long as the consumers are living closely. In urban areas collection points and lockers are in general the most sustainable option. However, they don’t have the same network density in rural areas. Consequently, consumer movements are longer and less sustainable in these areas. Therefore, home deliveries are the most sustainable option there.

Takeaway
The tool is available to the broad audience and can be used by retailers, ideally in their check-out environment. It will be interesting to research how consumers can be motivated to choose sustainable delivery options.