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The Challenges of Last kilometer Logistics

Enjeux-Logistique

The Challenges of Last kilometer Logistics

The “last kilometer” is an expression that has come to make sense with the rise of e-commerce. In effect, e-commerce has contributed to the surge in home deliveries as well as a reduction of delays.

All of this quickly became a significant headache for transport drivers, who competed with ingenuity to find faster and more efficient ways of delivering.

However, we are still far from being able to face all the challenges placed before us.

Management of the last kilometer in response to logistical, economic and environmental challenges.

The “last kilometer” represents a very important component of road transport, at all levels. It accounts for more than 20% of total logistics costs and accounts for almost 20% of urban traffic.

All of this presents the road sector with a large number of areas for improvement, be they economic, logistic or environmental.

The multiplication of delivery points: a major logistical challenge

E-commerce, with its goal of customer satisfaction, has lead to an explosion in home deliveries. The multiplication of points of sale was a direct result of the change in our consumption patterns. Customers are not only interested in obtaining the products they want, they also want them to be delivered directly to their homes, to their work, or even to relay points; this method being much less time-consuming for them.

All this has led to an increase in urban traffic, with urban freight transport now accounting for nearly 20% of total urban traffic, or one in five vehicles. Beyond the multiplication of motorway vehicles, this consumption trend to modify the profession of road transport operators, these are being held in a vise grip by the performance objectives and by the increase of the journeys to be carried out.

Under these conditions, it is easier to understand why last kilometer logistics represents a major challenge for the transport sector in the 21st century. One can therefore expect a major revolution in this field.

Last kilometer logistics in the face of environmental issues

How could we not address environmental issues when discussing the transport sector? Indeed, urban traffic congestion by delivery vehicles has led to very negative externalities for the environment.

Urban freight delivery today accounts for most of the greenhouse gas emissions, and this is mainly due to non-optimal management of the “last kilometer”: according to ADEME, the rate of kilometers traveled by empty delivery trucks exceeds 25% and trucks rarely exceed 67% filling capacity.

Reduction in journey times, optimization of routes taken and vehicle speed or load distribution are many levers capable of significantly improving the performance of the sector, while reducing its environmental impact.

The challenges of last kilometer logistics: A powerful economic lever

The “last kilometer” alone accounts for more than 20% of the total cost of the value chain. The optimization of its logistics thus represents a powerful lever for economic growth.

Home delivery is a market that has jumped more than 30% since 2010. Parcel business is expected to surpass $ 5 billion in sales this year. This will certainly attract newcomers to a market that is already highly competitive: giants such as UPS or FEDEX are not on their first go-round in this field and each have delivered billions of parcels worldwide.

Consequently, transport carriers capable of perfectly optimizing all segments of their distribution chain will be able to distinguish themselves from those who simply rely on their experience.

Conclusion

The next few years will see major changes in “last kilometer” logistics, and both traders and carriers will need to focus on many factors for improvement at the organizational and environmental level if they are to remain in the race.

At Transport Econo Nord, we put our expertise to work for the service of our customers every day. Contact us for all your freight transport needs.