Huge growth in the last mile delivery sector in the UK
By James Greetham, Managing Director & Founder, Sprung Collective
Super-fast last-mile delivery services for all your household essentials is nothing new in the US, with companies like GoPuff taking the market by storm with their business recently valued at $3.9Bn.
Now the race is on in the UK in more ways than one as competition heats up for companies such as Fancy, Dija and Weezy joining the battle to get your groceries delivered to your door via their app in just 15 minutes. The question is that it solves the pandemic's convenience demand, but can it support the need for our supply chain to be more sustainable?
My interest in the last mile delivery strategy came 5 years ago whilst working with renowned property developer Sir Stuart Lipton and his team on the iconic new 62 story City tower, 22 Bishopsgate. The key to Sir Stuarts 22B vision was to create a vertical village for its 12,000 tenants that created an enriching experience for all and passionately embraced the need to reduce the number of deliveries into the already overcrowded City. Their solution was to develop a management system that consolidates deliveries to the building and reduces the number of heavy vehicle trips needed, subsequently lowering emissions. This principle adopted by 22B is very similar to that of the last-mile delivery companies on the rise.
To understand this potential, in 2020 Accenture developed a robust econometric model of the impact of local fulfilment centres for e-commerce using data from London, Chicago, and Sydney. The model estimates the impact on outputs such as emissions and traffic congestion, based on inputs including local fulfilment centre prevalence, population density, average distance travelled per parcel, delivery vehicle mix and consumer demand projections.
The analysis is revealing. The last-mile supply chain made possible by local fulfilment centres could lower last-mile emissions between 17% and 26% through 2025. This improvement is broadly consistent across all three cities. Using local fulfilment for even half of e-commerce orders between 2020 and 2025 could lead to significant impacts.
So, it’s no mystery that the pandemic has radically accelerated the delivery benefits with new local or market-based fulfilment, permanently altering supply chains where the product is placed closer to customers than ever before.
What’s really interesting is something unexpected is happening with this model—it got greener. When supply chains started moving again, the ecosystem adapted fast, as people purchased more and different products online. Stores became fulfilment centres, shipping from store and curbside pickup emerged
The sustainability gains that came from the pandemic were unintentional. So, it’s now perfect timing to now get intentional and make the last mile more efficient, less expensive, and more eco-friendly. The whole last-mile ecosystem with post and parcel organisations, retailers, delivery companies, governments, and consumers are at a tipping point. Go one way, and it can create a truly sustainable last mile—faster, cheaper and greener. Go the other way, and things worsen.
There’s no turning back from the changes that the pandemic made to the last mile. Consumers’ shopping habits are different. Supply chains are different. Retail footprints are different. The last mile can be different too—much, much greener—if the ecosystem comes together to act on sustainable last-mile practices. Everyone has a part to play. What will yours be?
Faster. Cheaper. Greener.
James Greetham, Managing Director & Founder Sprung Collective
