Urbanisation radar: Last mile challenges in e-commerce

​According to Business Insider, an American financial and business news website, the last-mile delivery costs account for 53% of the overall transportation costs. At the same time, customers increasingly demand faster deliveries. Naturally, this is a topic of interest for future innovation.

​As collecting and delivering goods without solid route management can be very inefficient, crowdsourcing applications are becoming more popular, enabling more cost efficient and faster deliveries by independent drivers. Retailers are further expanding urban warehouse spaces in densely populated areas to provide faster deliveries.

However, being at home to receive a delivery is often challenging for busy consumers, so new technology is being developed to enable smoother home deliveries:

  • Internet of Things: tracking of shipments in 'real time' to get a precise delivery time
  • Unattended deliveries : the driver unlocks the door to your home, car or garage to deliver the parcel, whilst a camera is recording

The state of driverless vehicles

Unmanned ground vehicles (delivery robots) have been recently introduced by some retailers in several cities to deliver groceries directly to the consumer. We have also seen delivery robots taking care of the last-mile delivery of parcels from a local distribution centre to the consumer.

Commercial drone deliveries show a great potential for the future, but this is currently being held back by technological and regulatory challenges. China is a forerunner, using drones since 2006 for deliveries of e-commerce parcels to remote areas difficult to reach by truck. One of the first e-commerce delivery trials by drones, in an urban environment near a major international airport, took place in March 2019 around Helsinki. 

Several companies are working on self-driving trucks and trials have already taken place. Automated trucks could start taking shifts away from human drivers within six to ten years.

Whatever the delivery method is, a right-sized package should take up as little space as possible, and a light-weight, six-sided shaped package is easier to handle. Overpacking should be avoided, but a damaged product is, after all, the least sustainable option.

Artificial Intelligence will play an increasing role in the whole e-commerce value chain, from predicting consumer demand and recommending relevant products, to optimising and automating fulfilment processes and transportation routes.

Anna Keinänen, Market Intelligence Manager, Metsä Board


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