The supply chain continues to become more complicated, faster, more diverse, and more global. Ironically, the effects are being felt acutely in the most local ways, as on-demand shipping and last-mile delivery considerations force logistics companies to rethink processes. At the same time, cities are grappling with congestion and pollution by establishing walkable and limited access areas that make delivery even more difficult.
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The cheap and easy movement of goods is a crucial competitive differentiator for any city, but must be balanced against features such as livability, walkability and compliance with environmental regulations. As urban areas become denser and more congested, some cities are creating pedestrian-only and reduced-emission zones that make last-mile delivery challenging. At the same time, consumer demand is increasing the complexity of both goods and distribution channels. Even now, about 40% of overall logistics costs go to the last mile. These costs will only increase as cities grow and change—the United Nations estimates that over two thirds of the world’s population will live in urban areas by 2050 and that within a dozen years there will be over 40 mega-cities with over 10 million inhabitants each. Congestion, traffic, scarce parking, warehousing costs and pollution will only increase, presenting mounting challenges for all parties in the supply chain.
Urban logistics will increasingly rely on tailor-made solutions involving communications and information technologies. Innovations such as in-store pickup and retail locker boxes have become widespread already, paving the way for other solutions. The result will be a continual increase in the number of available delivery modes, including autonomous transport, drones and crowdshipping—delivery by ordinary citizens on foot or using other forms of personal transportation. These new delivery solutions can help companies maintain competitive logistics costs as they supplement the existing carrier infrastructure with lower cost modes while providing access to destinations and neighborhoods that are not easily reachable with the traditional delivery truck or van.
Visibility into the location and condition of individual packages will be indispensable as shipping modes and delivery facilities proliferate. Small-form sensor tracking devices or other technologies that report real-time location and other information, such as temperature or shock, will make it possible to track specific shipments from origin to destination, regardless of the method of transport. In the event that a shipment is disrupted—by traffic, weather or some other external factor—real-time location data will make it possible to reroute or, if necessary, reship a package.
Transparently integrating this data into each logistics partner’s information system will improve service and provide audit trails for regulatory compliance. More importantly, it will help independent entities—from crowdshipping workers to apartment building concierges—predict and manage demand against existing capacity.
New modes and technologies, working in concert, will emerge to improve the quality of life in big cities, moving goods faster through dense urban areas while reducing emissions and making life more pleasant for city residents. Collaboration driven by technology will help all the partners in an increasingly complex supply chain deliver goods on demand efficiently and sustainably.