Embracing Sustainability in Last Mile Delivery

9:26:44 AM | 6/29/2022

With the rapid growth of e-commerce post-COVID-19 pandemic, now is the time for businesses to adopt sustainable approaches in the last mile delivery in logistics and supply chain management to reduce the environmental burden caused by the process, said RMIT researchers.

Featured in the leading independent publisher of global research with impact in business, society, public policy and education -- Emerald Insights, the research paper ‘Last mile delivery in logistics and supply chain management: a bibliometric analysis and future directions’ proposes a framework which explores the characteristics and interconnections of last mile delivery and its related components.

“In the context of logistics and supply chain management, last mile delivery can be generally understood as the final step of transiting orders to the right customers,” said the research lead author and Bachelor of Business (Logistics and Supply Chain Management) fresh graduate Ha Tuan Nghiep.

Since the beginning of e-commerce, customers have been searching to buy products online rather than traditional brick-and-mortar stores. Consequently, e-commerce is experiencing robust and steady growth globally; amounting to nearly $3.46 trillion in 2019 and estimated to reach more than US$6.5 trillion by 2023.

Nghiep said that although last mile delivery has become a must-have consideration for businesses, it is globally considered the most pollutant, inefficient and costly component of the supply chain.

“With the ever-growing trade volumes of e-commerce, the number of delivery vehicles in circulation also increased to bridge the last mile towards the consumers.

“This progress, in turn, exacerbated traffic congestion and traffic accidents, air and noise pollution and greenhouse gas emissions.”

“Last mile deliveries have become unsustainable across all three elements of sustainability: economic, environmental and social, and sustainability needs to be the future focus of last mile delivery,” Nghiep emphasized.

The research team noted that the idea of sustainability in last mile delivery is not new, however, most of the work in this area is still focusing on economic benefits over the social and environmental advantages.

“It includes five dimensions - delivery, transportation, operations, distribution and logistics,” he said. “Each of these dimensions is interrelated and possesses their own characteristics. Last mile operations, transportation and delivery are considered operational, whereas last mile distribution is tactical, and last mile logistics is strategic.”

One thing the team noticed is that the practitioners are focusing heavily on the operational level of last mile delivery and paying little attention to the tactical and strategic level of the last mile delivery.

“The fragmentation due to different disciplines and standpoints will be detrimental to the future development of the last mile delivery, particularly during the COVID-19 pandemic and increased e-commerce activities around the world,” Nghiep said.

RMIT Vietnam lecturer and co-author Bill Au said that focusing only on the operation level limits the decision-making processes of the e-commerce businesses and obscures the potential to develop new strategies for the e-commerce industry.

“Therefore, extending the planning and considerations to tactical and strategic level allow e-commerce businesses to understand more clearly the needs and demands of stakeholders,” Mr. Au said.

Sustainability in the last mile is possible and not a myth, because evidence showed that last mile delivery had become greener during the COVID-19 pandemic, and customers are now expecting convenience, speed and sustainability from their deliveries at the right price.

“Once the benefits of sustainability have been made clear to customers, they are more willing to make economic sacrifices in the name of the greater good: the planet and society,” co-author and James Cook University’s senior lecturer Dr. Mohammadreza Akbari noted.

“It should be noted that no single entity can enable sustainable last mile delivery - it takes all supply chain players in the ecosystem working together to do so,” he said.

The team believed that the holistic approach to all aspects of last mile delivery will be beneficial in the context of Vietnam where the e-commerce industry is booming and consumers are increasingly demanding businesses to be sustainable.

By Vietnam Business Forum