Research: consolidation through resourcing in last-mile retail logistics

A new paper assesses how various ways of organizing last-mile logistics impact resource utilization and, in turn, opportunities for consolidating goods. The paper combines a conceptualization of resourcing and consolidation from the literature with an analysis of contemporary last-mile logistics options in the Swedish retail market. Based on the analysis of three forms of last-mile logistics: consumer logistics, retailer logistics, and hybrid logistics. The paper aimed to assess how the various ways of organizing last-mile logistics impact resource utilization and, in turn, opportunities for consolidating goods.

Resourcing and consolidation

The paper discusses how resourcing for fixed, mobile, and coordination resources can enable consolidation in terms of time, place, and form. Drawing from the Swedish context, the paper calls for additional research combining country-specific studies while examining similarities and differences in last-mile logistics, particularly concerning factors that enable or hinder consolidation and how such potentials are realized in practice. Although consolidation appears in the literature on last-mile logistics, this paper focuses on how consolidation can be achieved through resourcing and offers additional insights into current frameworks for last-mile logistics in retailing.

Any consolidation requires resources and is thereby related to resource utilization. In last-mile logistics, consolidation can involve various types of resources—for instance, vehicles, distribution centers, pickup points, shop facilities, consumer homes, time schedules, people, information systems, and packaging, each having unique features (in terms of time, form and place), which, in turn, can be exploited in consolidation. 

Types of last-mile logistics

  • In consumer logistics, an item is assigned to a specific consumer in a physical store at the acquisition point. That type of last-mile logistics was labeled acquisition in store, in which a consumer buys a product in a physical store and transports it to the point of consumption.
  • In retailer logistics, an item is assigned to a specific consumer and delivered to the final destination (e.g., the consumer’s home). The retailer organizes the transport, either in cooperation with a transport service provider (TSP) or via its own or subcontractor’s system.
  • In hybrid logistics, an item is assigned to a consumer, delivered to a pickup point, and retrieved by the consumer, who organizes its transport to the final destination (e.g., their home). A TSP or retailer performs all transport activities from the point of the item’s assignment (e.g., in a fulfillment center, distribution center, or manufacturing plant) to the determined pickup point. When performed by retailers, those activities are typically conducted via attended internal pickup points (i.e., collection in-store). However, TSPs can also organize those deliveries, typically by using attended external pickup points, although unattended fixed or roaming delivery points are occasionally used instead.

Types of consolidation

Across the three generic types of last-mile logistics, three types of consolidation were identified. First, the consolidation of form can occur when goods correspond to each other in their characteristics, packaging, and combinability, both with other goods in assortments in stores and with logistics and transport resources. Second, the consolidation of place can occur when goods correspond to each other in their geographical destination and mode of transport. Last, the consolidation of time can occur depending on the time, precision, availability, and frequency of delivery.

The framework can be used to identify the potential for consolidation and improve consolidation in last-mile logistics via resourcing. By offering a framework for a systematic analysis of various types of resources and their potential contributions for consolidation, new resources, as well as new resource combinations, can be identified, used, and exploited, some of which have not even been considered resources in a specific setting yet. In addition, the framework can work as a basis for collaboration initiatives and aid in identifying and disseminating good practices. 

Source: Hagberg, J., & Hulthén, K. (2022). Consolidation through resourcing in last-mile logistics. Research in Transportation Business & Management, 45, 100834.

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