E-Commerce Logistics Challenges: How City Distribution is Disrupting Delivery

E Commerce Logistics Challenges How City Distribution is Disrupting Delivery

Two converging trends – the rise of e-commerce and urban population growth – are creating big challenges for B2C and B2B parcel delivery in cities.  City Distribution refers to freight traffic and parcel delivery in urban areas, where the population is dense which creates unique challenges in delivery and logistics within this environment. Micro hubs and delivery by e-bike could be possible solutions, however a more holistic approach is necessary, according to logistics provider Dachser.

What are the stakes in city distribution?

As urban areas are growing rapidly, this leads to more and more complex environments, where carriers have to rethink their traditional delivery methods.
Alongside the requirement to decrease costs, it is also necessary for carriers to improve the speed and effectiveness of delivery. At the same time, the environment should not suffer and public life should not be disturbed. Due to e-commerce and the growing economy, consignments into cities are growing at record speed and the infrastructure is not able to grow at the same speed.

Is treating B2C the same way as B2B the solution?

All this is challenging for both B2C and B2B deliveries, according to Stefan Hohm, who is Corporate Director Corporate Solutions, Research & Development at Dachser:
The main challenge in the B2C sector is to meet the consumer at home at the right time and get a parking space in front of his house. A consumer wants the possibility to track his consignment all the way from the online shop and influence the delivery time of his order. In our core business, the B2B sector, the main challenge is to fulfill the requirements and restrictions specified by the receiver of the parcels or pallets.
A company likes to be able to track the consignment only in the case of discrepancies. This as well as heavy traffic and environmental framework forces logistics providers to plan efficiently with flexible IT tools when planning their route as well as when forecasting the traffic situation. A solution could be to treat B2C the same way as B2B, and apply the lessons learned in one segment to the other.”

What is Dascher’s city distribution project?

With the City Distribution logistics project Dachser aims to innovate deliveries in cities. The project consists of a closely collaborating team of more than 10 employees, located in several European countries. They are currently working on the development of a sustainable business model for City Distribution logistics and on a tool box for European metropolitan areas.
As all cities have their own individual and special requirements, the tool box will be a practical method for providing a variety of solutions to the local operational department. They will be able to choose between the relevant concepts and apply them regionally in their metropolitan areas, flexibly and according to their needs.

Why everyone must take part in innovating future city distribution logistics ?

Sustainable delivery involving micro hubs, night deliveries, implementation of new energies and technologies are part of Dachser’s plans to innovate and improve city distribution.
We are working on different concepts e.g. micro hubs, we are employing several types of electric vehicles, and we have developed different products for different consignment flows,” says Stefan Hohm.
However, carriers cannot carry the burden of improving city distribution all by themselves, as a more holistic approach to master the future situation is necessary. Authorities, enterprises and people in general need to step up and take part in making city distribution more sustainable. Doing so will make urban logistics more profitable for everyone involved.

What are the solutions to optimize city distribution?

To truly optimize city distribution we also need to collaborate with authorities and share our observations and needs. It will also be necessary for enterprises, authorities and people to change their mindsets and set more priority on sustainable solutions. Not everything has to be delivered in one hour!
I am sure that city distribution will be much more efficient in the future through IT solutions and electric vehicles, but due to the massive increase in shipments, the amount of traffic will not disappear overnight. City distribution will become a challenge for society as a whole and therefore politicians and public authorities have to participate more in this discussion,” Stefan Hohm concludes.
Stefan Hohm will be presenting the issues connected to City Distribution at Nordic Delivery Conference in Copenhagen May 4th 2017, where he also provides a detailed insight into how this issue may be solved in the future.
City Distribution logistics can be a great challenge for carriers and e-commerce professionals. As our cities become more dense, and our customers become more demanding in terms of delivery times, we will have to adapt and innovate to create sustainable solutions. These solutions will have a direct implication on future e-commerce sales in urban areas.
What’s the best innovation we could put into place?

Image credit : Lay