The last mile delivery is the Achilles’ heel of the logistic industry. The steady growth of online shopping and the ever-increasing number of parcels to be transported and delivered in time through congested cities make the last mile so difficult and vulnerable for disruptions in the current situation.
However, there is an indispensable need to redesign and optimize the last mile, especially since 28% of a product’s value is today allocated to the costs of the last mile. According to a report, a 40% reduction in delivery costs can lead to a 15-20% increase in profit margin, resulting in a 15-20% price decrease.
The rising demand of the consumers towards a flexible and more convenient execution of the delivery presents another big challenge in the last mile. Consumers expect ever-shorter delivery times and free shipping while receiving and returning more deliveries than ever.
Trying to cope with these challenges in a fast-changing and competitive environment pushes logistics companies – whether small or large – to their limits. Hence, it is necessary to explore alternative means of transportation to avoid a standstill in the last mile.
Autonomous aerial and ground vehicles such as drones and robots are among the promising methods to execute the last mile delivery, as they can use the existing infrastructure, i.e., roads and airspace. They are found to reduce the cost per delivery and delivery time on the one hand and increase consumer satisfaction through enhanced service quality on the other hand.
Autonomous delivery vehicles can address most of the challenges of the last mile, considering the traffic environment and congestion, safety and energy savings, and the interests of consumers.
1. Delivery Drones
Urban mobility can be drastically improved by moving goods from the ground to the air, using unmanned aerial vehicles or drones for transportation. They can be pre-programmed for autonomous flights, and the control functions are either onboard or remotely controlled. Delivery drones are an interesting alternative for last mile delivery because they address many of the challenges of the last mile, which cannot be handled with existing means of transportation. As drones are operated without a human pilot and work electrically, they have reduced consumption of resources as no fuel and drivers are needed. Thus, unmanned electric means of transport have advantages in operating costs over a manned ground vehicle with fuel and labor costs for drivers and the potential to decrease delivery costs. By moving in the airspace, they can also use straight-line routes and avoid traffic jams, allowing more constant and higher speeds for deliveries.
In addition, greenhouse gas emissions and energy use can be reduced due to the low consumption of resources. But also, drones can relieve traffic, which is a big problem, especially in larger cities. Avoiding traffic jams and using straight-line routes brings advantages from the consumer’s point of view as well. Due to the avoidance of traffic, there are usually hardly any delays in drone deliveries. As a result, the delivery window is much smaller and more accurate, allowing consumers to plan better and miss fewer deliveries. Drone delivery combined with mobile phone applications would also ensure traceability and termination conditions to meet the highest consumer demand probability. In addition, drones facilitate same-day delivery, which plays an important role for consumers nowadays. A study shows that almost 25% of consumers are willing to pay significant price advantages for delivery services such as same-day delivery or immediate delivery.
However, the competitiveness of drones is limited in certain areas. Due to current battery technology, the geographical range of drones is limited to 30 to 40 min of travel per dispatch. The drones are only suitable for shorter distances and cannot be used for long distances. Drones are also limited in terms of packages per shipment. Due to the extremely high number of parcels that must be delivered daily, thousands of drones would be necessary to handle the parcel volume. Technical problems pose challenges in the use of delivery drones. Criminal activities could also become a problem. Civilian GPS signals were developed as an open standard, freely accessible to all, which could have a major drawback: they can easily be counterfeited or spoofed. This allows criminals to control a drone through cyberattacks without the drone operators being aware of a security breach.
2. Delivery Robots
Another promising alternative to standard delivery vehicles is ground-based delivery robots that deliver items to consumers without requiring delivery persons. These are mechanical devices that are programmable and multi-task, moving freely in the environment and overcoming obstacles without assistance.
Delivery robots find applications in three main areas. One area of application is express deliveries and deliveries with a narrow time window. The robot delivery provides a 15 to 20-minute time window, whereas traditional delivery usually only specifies the day of delivery. Considering consumers’ rising expectations, such as faster and more reliable delivery services, these can be satisfied by offering timed delivery windows through delivery by robots.
Further, these robots are used to deliver fresh food and beverages as they can keep them warm or cool. Lastly, they can bring home groceries from a supermarket. Delivery robots present an innovative technology that can relieve the couriers. They can offer a solution for retailers and logistics companies to increase supply chain efficiency and reduce costs. The robots have a decisive advantage over conventional means of transport such as trucks or vans, as they can reduce traffic and thus congestion.