The last mile of logistics

CEP (Courier, Express and Parcel) service providers face major challenges. Firstly, they have to cope with the high volume of orders, which – driven by e-commerce – is constantly increasing. Then they also have to deal with less and less tolerance from customers towards delivery drivers. Double-parking, air pollution in the city centre caused by delivery vehicles and higher delivery costs are just some of the criticisms that CEP service providers have to face. And that is not all. Delivering an item to a recipient is the most expensive and time-consuming stage of the entire logistics chain. The last mile is a challenge. In its new white paper, EPG gets to the bottom of the matter with Prof. Dr. Boris Zimmermann from the Fulda University of Applied Sciences and presents possible ways to optimise the delivery process. The logistics experts also provide insight into various scenarios for the future that may soon become reality.

The last mile of logistics – the distance an item travels from the depot of a parcel service provider to the recipient – is the most expensive leg of the logistics chain, accounting for 50 percent of total costs. The costs pose major challenges for the CEP market: “The current situation for last-mile logistics companies can be described briefly as short distance, maximum effort”, says Marcel Wilhelms, Managing Director of the EPG | CONSULTING division of EPG. “To help ease the situation, we looked for ways to optimise the system and took a closer look at a number of scenarios for the future in our white paper, such as delivery by transport drone or robot. Of course, always with an eye on a reasonable cost-benefit ratio”. In addition to the high delivery costs, customers also want more and more services, such as same-day delivery or even same-hour delivery, but very few are willing to pay for them. “While the financial burden on the last mile is continuously increasing, the costs cannot be passed on to end customers because of a lack of acceptance,” says Dr. Boris Zimmermann, professor and logistics specialist at the Fulda University of Applied Sciences. “This is putting pressure on CEP service providers. To prevent the CEP system from collapsing, new strategies need to be developed urgently in addition to existing, established solutions to provide relief”.

In their white paper, the experts from EPG | CONSULTING examine possible alternatives for the last mile of logistics, as well as the topic of data transparency. Data transparency means that all participants in the supply chain must have access to relevant information in order to coordinate and deliver the order as quickly as possible. An undisrupted data flow is also important, so that information can be accessed in real time – both by the responsible CEP service provider and the customer. “Using smart IT platforms, this scenario is already possible with reasonable effort,” adds Marcel Wilhelms.

Will we soon be getting parcels from a robot courier?