Efficient and sustainable last-mile logistics: lessons from Japan

The WEF’s Future of the last-mile ecosystem report forecasts trends in global e-commerce–related indicators. Mckinsey leveraged the model in Japan to present specific insights, factoring in local conditions such as demography and purchasing behaviors.

The WEF’s report forecasts that e-commerce distribution volumes in central Tokyo’s 23 wards will rise by 85 percent by 2030, which will require a 71 percent increase in delivery vehicles to travel 25 percent more in distance. In addition to placing a greater strain on city logistics operations, the rise in e-commerce would lead to a 20 percent increase in carbon dioxide emissions.

Urban versus suburban

The differences between urban and suburban areas mean that different forms of intervention would achieve different levels of effectiveness based on geography. In suburban areas, the volume of last-mile traffic will also rise, but by 10 percent less than in Tokyo. Delivery fleets will need to be expanded by 51 percent, or 20 percent less than in Tokyo. However, the lower population density in suburban areas means that delivery vehicles will have to cover greater distances, emitting relatively higher levels of carbon dioxide despite smaller delivery fleets. Depending on the level of urbanization, some forms of intervention work better than others. A number of interventions can be employed to cope with the increasing demand for online deliveries.

Interventions

Electric vehicles and hydrogen fuel-cell electric vehicles are likely to lower carbon dioxide emissions in both cities and the suburbs. When it comes to delivery costs, parcel lockers and delivery robots may lead to modest cost reductions. In suburban areas, parcel lockers, the use of microhubs, and the retrofitting of parking-based infrastructure will likely lead to some cost savings. Delivery robots offer a promising space to explore. The Japanese government will allow the use of delivery robots on roads as of 2021.

McKinsey suggests:

  1. At the regional level: Joint delivery systems, including networking sorting center
  2. At the neighborhood level: Parking-space management
  3. From truck to door: Governance of robot operations on pedestrian walkways.

 

Source: McKinsey

Picture: Rakuten Group

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