The green consumerism trend is growing as consumer awareness towards combating natural resource degradation got a place on the global agenda. When you open or move your business online, it is very likely that your customers prefer your fastest delivery option to any other variation. Unfortunately, those lightning fast services do come with costs: thinner ozone layer, more traffic, higher costs for human resources and an alarmingly high rate of air pollution.
This is why the consumer demand for “as soon as possible delivery” is driving upwards the demand for environmentally responsible choices, shifting online shopping towards a sustainability focus and expansion of green product categories. Adequately, the incipient and ultimate phase of the transportation process should follow the same green trend, becoming the green first and last mile.
In this article, we’ll develop an understanding of how ecommerces can use sustainability in their first and last mile logistics operations.
First mile delivery is generally known as the transportation of goods from a merchant’s premises to the next hub from where the goods are sent further. Yet, this term can mean different things, depending on the type of ecommerce you run. For example, if we’re talking about a manufacturing online business, it means transportation of goods from a factory to a distribution centre. If you are a retailer, like C&A or Zona Sul, or a marketplace (see the case of Unilever), the first mile logistics means shipping goods from local distribution centres to stores.
Following the same pattern, last mile delivery refers to the last leg of supply chain operations. A product’s journey from a warehouse to the doorstep of the end-customer is termed as the last mile delivery. This last step of the delivery process is most critical and should be well managed for speedy shipping. Moreover, it is directly correlated with customer satisfaction, so this last segment of the delivery process better not be faulty.
Last mile delivery also happens to be the most expensive leg of the journey from the transportation hub to its ultimate destination. Down the supply chain, last mile logistics are more costly and detrimental to the environment than the first part of the process. Thereby the need for resource optimization should be the key focus area. Now that it is clear what first and last mile delivery are, it’s time to find out how to put that green in front.
Since March 2020, online orders skyrocketed out of necessity and getting your groceries on time was more crucial than ever. When businesses were struggling to cope with the changing customer needs like same-day delivery or hunting for a food drop-off time slot in advance, in came challenges like contactless delivery, zero cash payments and our most precious, sustainability.
A study by the World Economic Forum showed that last mile deliveries are likely to increase by 30% in the next ten years as the number of online shoppers snowball. The same report also noted that the demand for last mile deliveries in urban areas would rise by 78% by the year of 2030, which will result in a 36% increase in delivery vehicles within inner-city limits.
If these predictions prove correct, last mile emissions could contribute to carbon dioxide emissions rising 25 million tonnes annually and a 21% increase in traffic congestion. There is no nice way to put it: this sounds like an awful lot of pollution and decrease in air quality in the very recent future.
Because of that, modern consumers are more loyal to brands that ensure a flexible online buying experience and, on top of that, have a lesser negative impact on the environment. To deliver on these expectations, supply chain leaders need to revisit their last mile strategy, and adjust it to higher standards of environmentalism. But how?
Aa an online business, be it a retailer, grocer, marketplace, big or small, old or new, it will take time and a well-placed investment to change the way products are delivered. Fortunately, adopting a last mile delivery strategy that is eco-friendly will likely result in an ecommerce balance between satisfying their clients’ demand for fast deliveries while lessening their carbon footprint. The actions below are means to guarantee that.
One of the most strategic ways of reducing travel times for drivers is to optimize their delivery routes. Companies who are serious about expedited delivery while taking into account their carbon footprint would do well to consider investing in last mile delivery optimization software. One cannot imagine how much traffic is caused by ecommerce shopping through parcel delivery. Artificial intelligence-driven last mile delivery algorithms provide companies with the most efficient routes and ensure the promised delivery schedules – which not only has its environmental benefits, but also saves money.
There’s also a strong case for using transportation that’s not powered by fuel, such as electric or hybrid vehicles, drones, and delivery robots. These modes of transportation do not rely on fuel and thereby significantly reduce the negative impact on the environment caused by deliveries.
Remember how some coffee shops give you a discount if you bring your own cup? Or did you ever pay a deposit for a glass bottle that you got back once you returned the empty bottle? Companies can also employ the same strategy to entice consumers to go for last mile delivery alternatives that are eco-friendly. Waiving delivery charges for waiting on longer delivery times is a good incentive for consumers since many online shoppers would rather wait a couple of days or hours as long as they get free shipping.
Integrating the inventory of all branches in the delivery routes goes a long way in reducing long drives. This means incorporating hyper-local deliveries where companies source ordered goods from the retail outlet nearest to the customer, which helps reduce the carbon footprint per online order.
There’s always the option of keeping the same hour or day deliveries as the last option since on-demand deliveries leave them with very little time to optimize their routes and deliveries. It doesn’t mean not offering them since it’s also needed to serve customers needs, but to give more visibility to longer SLAs deliveries.
It is very important for online businesses, now more than ever, to find a balance between fulfilling the growing demand for online retail against fast deliveries and minimizing the carbon footprint of their operations. Fortunately, there are ways to make first and last mile deliveries sustainable with the proper management, investments, and eco-friendly solutions.
The CCX Company, in collaboration with VTEX Commerce Cloud, expresses gratitude for having had the opportunity to enhance its understanding of the advantages, trends, and other elements addressed in the current topic. This article was jointly developed and is brought to you by the VTEX Commerce Cloud team.
