Accenture finds last-mile delivery reduces traffic volume by 13% in London

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Post and parcel organisations, retailers and delivery companies could significantly reduce harmful emissions and traffic congestion within cities, if bold steps are taken to reshape last-mile delivery ecosystems, according to a new study by Accenture, undertaken in collaboration with Frontier Economics.

The report, “The Sustainable Last Mile: Faster. Greener. Cheaper.,” found that using local micro-fulfilment centres (MFCs) across London, Chicago and Sydney to fulfil just half of the e-commerce orders could significantly reduce traffic volume and harmful air emissions.

Of the three cities included in the study, London would see the largest delivery traffic reduction from the use of MFCs — standing at 13%, which equates to about 320 million fewer miles travelled by delivery vehicles. It also found that greater use of MFCs could lower delivery vehicle-related emissions in London by 17% by 2025.

A flexible logistics solution for e-commerce, MFCs enable inventory to be stored closer to customers in convenient suburban locations, enhancing supply chain processes, speeding up last-mile deliveries and enabling in-person pick-up of parcels. MFCs include in-store click and collect points, automated locker storage facilities, and stand-alone micro-warehouse facilities. Increasing the use of MFCs to enable same-day or next-day deliveries provides retailers and postal and logistics organisations with operational benefits, while simultaneously creating significant positive environmental and societal impact, according to the study.

“Last mile delivery has always had a significant impact on air emissions & traffic congestion, but in the current climate, the environmental and societal challenges it presents are even more pressing” said Henry Cartwright, Accenture’s Post & Parcel Industry Lead for Europe. “With the uptick in demand for eCommerce during the Covid-19 pandemic looking set to stay, the need to address the carbon footprint of the last mile supply-chain has never been more pressing. If left unchecked, we’re likely to see an  increase in vehicle movements and traffic congestion on the roads as we emerge from the lockdown, impacting on air quality as a result of higher levels of vehicle-related emissions.”

The study identifies substantial and achievable reductions in the emissions of carbon dioxide (CO₂), nitrogen oxides (NOx) andparticulate matter (PM10) arising from a reduction in delivery vehicle volumes through the increased use of MFCs. It found that London could achieve a 144,000 tonne reduction in CO₂, 722 tonne reduction in NOx, and a 5 tonne reduction in PM10, by 2025. The reduction for CO₂ in particular, would be equivalent to taking over 15,000 cars off the road permanently. The offering of convenient ‘click-and-collect’ options by retailers could encourage consumers to travel in-person to collect parcels at local fulfilment centres – whether this is by low-emission vehicles such as private cars, zero-emission vehicles such as bicycles, or on foot – further contributing to reduced consumer traffic volumes and vehicle emissions.

Overview of results for London

Estimation of results if micro-fulfilment centres are used for 50% of e-commerce orders in London, between 2020 and 2025, if all of these orders same or next day delivery:

The task of reshaping last-mile delivery practices will involve governments and retailers incentivising greener choices among consumers and businesses; delivery companies and postal agencies re-assessing how they manage their supply chains and deploy assets such as heavy goods vehicles; and the greater use of data and analytics technologies by e-commerce retailers and logistics organisations.

The increased integration of MCFs would also allow for the use of smaller vehicles, such as scooters, to be used on the second leg of the journey. Not only do these vehicles take up less road space and cause less congestion compared to other delivery vehicles, but this would also facilitate the first leg of the last mile journey to take place at less congested hours, such as the early morning. Deploying route optimisation technologies alongside the MFCs, could also reduce delivery traffic by an additional 3% in London. This could result in an additional reduction in vehicle travel of up to 87 million miles across London.

“No single entity can solve the challenge of last-mile delivery alone,” Cartwright said. “Consumers, retailers, local authorities and delivery organisations must cooperate and work together to improve the sustainability of last mile delivery and to make it more efficient and cost effective – it will take an ecosystem of partners working together across London to create the lasting change that is critically needed.”

“The good news is that collaboration is happening and progress on greening the supply-chain is being made; but this isn’t moving fast enough. The industry must act now to accelerate the pace of change if it is to contribute meaningfully to achieving the UK’s net zero targets. This will require the pairing of human ingenuity with technology innovation, across the sector.”