1KE-CONSULT

Last mile logistics

E-Commerce and its impact on transport in urban areas andInnovative approaches in city logistics

for solving the last mile issue

Dr. Klaus Esser

Berlin, 26.05.2008

KE-CONSULT, Kurte&Esser GbR,Transport Economics Consultants

Oskar-Jaeger-Str. 175, 50825 CologneTel.: 0221 / 5503075, E-Mail: esser@ke-consult.de

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B2C-VERRA

B2C-E-Commerce: Impact on transport in urban areas (2002-2004)

supported by theGerman Federal Ministry of Education and Research (BMBF-FKZ 19M2017)in collaboration with the City of Cologne

OPTIMAL

Strategies for optimizing Pick-up and Delivery trafficof Internet Commerce – Packstations in Cologne (2005-2006)

supported by theGerman Federal Ministry of Economics and Technology (BMWi-FKZ 19G4042)in cooperation with the Deutsche Post World Net, DHL and the City of Cologne

Last mile logistics

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Last mile logistics

Data base of the study „B2C-VERRA“:

Trends in B2C E-Commerce / structure of internet consumers:in general: other examinations / literaturein Cologne Region: consumer survey

Delivery concepts:Interviews with B2C merchants, logistic providersWorkshops with B2C merchants, logistic providers

Acceptance of delivery concepts:Consumer survey

Consumer survery:Questionnaires to 15,000 households1.600 returned questionnaires0.1 % of relevant population

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Last mile logistics

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Database OPTIMAL

• Research project OPTIMAL: supported by BMWi

• Conducted by KE-CONSULT in cooperation with Deutsche Post World Net, DHL and City of Cologne

• Estimating the effects for Cologne (2005)

• Empirical data base:• Customer survey of more than 1,200 users at eleven

Packstations in Cologne• Data for all Cologne Packstations provided by Deutsche Post

World Net, DHL• Current traffic data for the City of Cologne

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Last mile logistics

KE-CONSULT

Trends in E-Commerce and Consequences for Express Courier:

more parcels,

subdivided parcels,

increasing deliveries to end-customer:

lower potential for bundling,

increasing multiple deliveries,

lower stop-factor,

rising costs of last mile logistics

Therefore: innovative concepts for solving the last mile issue are needed

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Last mile logistics

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Delivery concepts:

Conventional home delivery

Pick-up points, such as filling stations or kiosks

Package boxes for individual residential buildings

Locker facilities in publicly accessible places

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Last mile logistics

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Acceptance of delivery concepts:

Used and preferred delivery concepts

in percent

131

83

1

238

51

17

0

20

40

60

80

100

Pick-up point Package box Home delivery Locker facilities

Used Preferred

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Last mile logistics

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Acceptance of delivery concepts:

preferred delivery concepts by region

28%72%Suburbs

33%67%Outer city

61%39%Center city

Pick-up pointLocker facilities

Home deliveryPackage box

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Last mile logistics

KE-CONSULT

Impact of E-Commerce and delivery concepts on transport in urban areas (Cologne 2003):

shopping traffic – trip balance

1.12.0

0.5

-1.5

-5.1-6

-4

-2

0

2

4

Information Purchase Pickup Returns All trips

(in millions of trips per year)

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Last mile logistics

KE-CONSULT

Impact of E-Commerce and delivery concepts on transport in urban areas (Cologne 2003):

shopping traffic – reduced mileage in car traffic

-1.4

-3.6-2.6

-7.6

-10

-8

-6

-4

-2

0

Study region-overall

Center city Outer City Suburbs

(in millions of vehicle km per year)

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Last mile logistics

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Impact of E-Commerce and delivery concepts on transport in urban areas (Cologne 2003):

delivery traffic – delivery trips

8,20014,500

22,700

0

10,000

20,000

30,000

Pickup pointLocker system

Home deliveryPackage box

Total

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Last mile logistics

KE-CONSULT

Impact of E-Commerce and delivery concepts on transport in urban areas (Cologne 2003):

delivery traffic – mileage

790,000960,000

1,750,000

0

400,000

800,000

1,200,000

1,600,000

2,000,000

Pickup pointLocker system

Home deliveryPackage box

Total

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Last mile logistics

KE-CONSULT

Impact of E-Commerce and delivery concepts on transport in urban areas (Cologne 2003):

Synopsis of transport impacts

+3.1+1.8-13.3-7.6Region under study

+1.4+0.8-4.6-2.6Suburbs

+1.5+0.9-6.2-3.6Outer city

+0.2+0.1-2.5-1.4Center city

2006200320062003

Delivery traffic(mil. vehicle km)

Car traffic (mil. vehicle

km)

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Last mile logistics

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B2C E-Commerce results in

Reduction of private shopping traffic (personal motortraffic, public transport) and increasing delivery traffic

Reduction of demand for parking space in Cologne center city

Traffic related problems at locker facilities and pick-uppoints

Concentration of pick-up traffic in peak traffic periods(rush hour)

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Last mile logistics

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Packstation –an innovative concept solving the last mile issue

More than 700 Packstations in Germany (2006)

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Last mile logistics

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Packstation – an innovative concept solving the last mile issue

• Registered Packstation customers (gold card customer) …can receive postal packages at the Packstation for pick-up…can also send postal packages using the Packstations

• When a postal package recipient is not at home to accept delivery, the parcel is not deposited at a local post office but placed in a Packstationwhere the customer can pick it up (green card customer).

• DHL deposits postal packages at the Packstations to be picked up by customers (registered Packstation customers and green card customers) and collects the parcels sent from there by registered Packstation customers.

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Last mile logistics

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Customer pick-ups – temporal distribution

0,9% 0,2% 0,3%1,8%

6,0%

10,0%

12,6%

14,6%

21,8%

19,9%

8,7%

3,3%

0%

5%

10%

15%

20%

25%

0.00-2

.00

2.00-4

.00

4.00-6

.00

6.00-8

.00

8.00-1

0.00

10.00

-12.00

12.00

-14.00

14.00

-16.00

16.00

-18.00

18.00

-20.00

20.00

-22.00

22.00

-24.00

Delivery traffic of DHL

0,0%0,8% 0,6%

2,1%

19,8%

22,5%

17,8%

23,4%

12,2%

0,8%0,0% 0,0%

0%

5%

10%

15%

20%

25%

0.00-2

.00

2.00-4

.00

4.00-6

.00

6.00-8

.00

8.00-1

0.00

10.00

-12.00

12.00

-14.00

14.00

-16.00

16.00

-18.00

18.00

-20.00

20.00

-22.00

22.00

-24.00

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Evaluation of Packstation (I): impact on urban transport

• Alternatives to the gold card are the green card and the orange card (orange card: when a parcel recipient is not at home to accept delivery, the parcel is deposited at a local post office).

• The traffic volume per parcel is lowest for the registered Packstation customers.

• Green card customers have a higher traffic volume per parcel.

• The traffic volume per parcel is greatest with the orange card.

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Last mile logistics

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Evaluation of Packstation (II): impact on urban transport

• Pick-up traffic is organized more efficiently.

• Customers achieve savings of time and costs.

• The trip volume is reduced by 54,000 trips and the traffic volume by around 80,000 km across all transport modes.

• The City of Cologne is relieved of around 35,000 vehicle kilometres of car traffic.

• The environmental impact of pick-up traffic (particulates, CO2-emissions) is reduced. For example, CO2-emissions are diminished by 8 tons.

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Last mile logistics

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Effects in delivery traffic

• DHL can execute delivery trips more efficiently. This generates savings in time and costs.

• For Cologne, Packstations resulted in a reduction of vehicle delivery mileage of 7,000 vehicle kilometres in 2005.

• This leads to a reduction of CO2-emissions in delivery traffic by about 3 tons. The particulate matter burden created through delivery trips can be reduced.