Madeleine Hillyer, US Media Relations, Tel. +1 646 592 5044; firstname.lastname@example.org
· Demand for urban last-mile delivery is expected to grow by 78% by 2030, leading to 36% more delivery vehicles in the world’s top 100 cities
· Deliveries will cause related emissions to rise by nearly one-third and add 11 minutes to each passenger’s commute
· A new report analyses 24 interventions, including droids, electric vehicles and parcel lockers, that can decrease both CO2 emissions and congestion by up to 30%
· Read more on urban deliveries here
New York, USA, 10 January 2020 – A new analysis released today estimates that urban last-mile delivery emissions are on track to increase by over 30% by 2030 in the top 100 cities globally. Without intervention, these emissions could reach 25 million tons of CO2 emitted annually by 2030. Along with increased carbon emissions, traffic congestion is expected to rise by over 21%, the equivalent of adding 11 minutes to each passenger’s daily commute. New analysis released by the World Economic Forum identifies and prioritizes 24 interventions to combat these trends.
The Future of the Last-Mile Ecosystem analysis suggests that growing demand for e-commerce delivery will result in 36% more delivery vehicles in inner cities by 2030, leading to a rise in both emissions and traffic congestion without effective intervention.
However, effective interventions do exist. For example, options that have the greatest impact on reducing CO2 emissions include greener vehicle use choices, such as switching to battery electric or – in the long term – hydrogen electric vehicles. Another intervention, dynamic rerouting, finds the best way to get from point to point through constant updates that reduce mileage and the time drivers need to deliver goods. Other solutions include pavement delivery by automated robots, or droids, and parcel lockers.
Deliveries continue to get faster
Demand and offerings of increasingly fast delivery options continue to grow at a greater pace than other delivery options. Currently, same-day and instant delivery are the fastest-growing segments of the last-mile delivery environment, increasing at rates of 36% and 17% a year.
“Consumer demand for the convenience of online shopping and fast delivery is rising rapidly and companies are struggling to meet this demand with sustainable delivery options,” says Christoph Wolff, Head of Mobility, World Economic Forum. “Rising congestion and emissions from e-commerce delivery are already putting stress on city traffic patterns and this pressure will only rise from growing demand unless effective intervention is quickly taken by both cities and companies.”
For example, Walmart just made its same-day delivery option available for 75% of the population of the United States, and Amazon already delivers to nearly three-quarters of customers within 24 hours. In China, same-day and instant delivery make up more than 10% of the overall parcel deliveries, more than double the rate in Europe. These faster delivery options put a particularly heavy pressure on already strained city traffic.
How cities can tackle urban delivery
The Future of the Last Mile Ecosystem analysis, done by the World Economic Forum, McKinsey & Company and the World Business Council for Sustainable Development (WBCSD), assesses 24 supply chain and technology interventions by developing an advanced analytics-based congestion simulation and quantitative model, resulting in concrete, quantified insights on how these interventions can help solve inner-city delivery challenges, as well as lowering CO2 emissions.
“The ‘last mile’ is a complex, interwoven topic as it involves many ecosystem stakeholders. We have always had trends affecting the last mile, but not at that speed and not in parallel, not at this global scale,” says Bernd Heid, Senior Partner, McKinsey & Company. “We see numerous technology and delivery chain solutions working independently. Our research shows, however, that in an 'ecosystem scenario' in which both public and private players work together effectively, delivery emissions and congestions could be reduced by 30% until 2030 when compared to a 'do nothing' scenario, and technology can help to bring delivery costs down by 25% at the same time.”
Intervention examples and results include:Battery electric vehicle and hydrogen electric vehicles Even in scenarios driven only by consumer choice (not public-sector regulation), battery electric vehicles and hydrogen electric vehicles can reduce CO2 emissions by 16% and 24%, respectively.Night-time delivery Night-time delivery or delivery during adjacent times can reduce congestion by 15% and can be best achieved through company choice and regulation. This intervention includes night runs by mainly electric vehicles during off-peak traffic times. Multi-brand parcel shops Shops with packages from multiple delivery players improve consumer convenience and can ease congestion by 5% to 18%, depending on the scenario. Such shops have been piloted in the German city of Hamburg since 2015. However, they require logistics players to cooperate on retail space and build merged supply chains. Such a model would have a tremendous impact on the competitive dynamics in the logistics industry.
Impact of intervention options
The best results from the model involve companies, regulators, drivers and citizens to contribute to the ecosystem and change behaviour. More interventions and outcomes can be found in the report.
“Sustainable urban freight is the economic lifeline of cities of tomorrow where access and emissions are regulated,” says Thomas Deloison, Director of Mobility, WBCSD. “We need to act at systems level to find the technology, policy and business-related interventions which will make a healthy and attractive urban environment possible. We hope to inform insightful discussions for private and public players through the simulation findings in our report.”
“A multiplayer approach is critical for optimizing the decrease in congestion and emissions while also decreasing delivery costs,” says Richa Sahay, Lead, Automotive and Supply Chain and Transport, World Economic Forum. “However, fully implementing such a scenario would require investment of approximately $12.7 billion for any city with around 2 million inhabitants by 2030. Generating insights and financing for such sustainable transitions is the next step of this initiative.”
In the next phase of e-commerce delivery work, the World Economic Forum will apply the impact analysis of this report in upcoming projects with the cities of Amsterdam and Singapore.
Notes to editors:
Watch live webcasts https://wef.ch/wef20
Guide to how to follow and embed sessions on your website at http://wef.ch/howtofollow
View the best photos from the event at http://wef.ch/pix
Read the Forum Agenda at http://wef.ch/agenda
Become a fan of the Forum on Facebook at http://wef.ch/facebook
Watch Forum videos at http://wef.ch/video
Follow the Forum on Twitter via @wef and @davos, and join the conversation using #wef20 and #FairerWorld
Follow the Forum on Instagram at http://wef.ch/instagram
Follow the Forum on LinkedIn at http://wef.ch/linkedin
Learn about the Forum’s impact on http://wef.ch/impact
Subscribe to Forum news releases at http://wef.ch/news
The World Economic Forum, committed to improving the state of the world, is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business and other leaders of society to shape global, regional and industry agendas. (www.weforum.org).