Retailers and logistics experts are working to satisfy consumer demand for a more sustainable way to receive packages.Getty Images
Since 2020, ecommerce sales in Canada have been skyrocketing. As a result, last-mile delivery – the final step from warehouse to shopper – has also seen a significant increase, and it is forecast to account for more than 30 per cent of urban carbon emissions by 2030.
Climate-conscious consumers want a more sustainable way to receive their packages, but they still want the process to be fast and cost effective, which has created a movement among retailers and logistics experts to develop solutions.
“As a consumer, you don’t really have a choice to say, ‘Please, I’ll pay an extra 50 cents or whatever it is to have it delivered on an electric vehicle,’ but we know there’s an appetite for that,” says Steve Kolbuc, co-founder and head of business development at Koorier, a soon-to-launch-in-Canada sustainable last-mile delivery service.
“That’s why for the last two years, we’ve been building the program software to be able to offer clients 100-per-cent EV [electric vehicle] delivery.”
The logistics of sustainable delivery in Canada are complicated, due to geography and inclement weather. Not all EVs are created equal and they don’t necessarily function well on snowy Canadian streets and in below-freezing temperatures.
The introduction of more durable EVs, such as the GM BrightDrop Zevo 600 van that Koorier plans to use, has allowed for deliveries that would not have been possible three to five years ago.
“More than likely we’ll be fully operational in January,” says Mr. Kolbuc. “We’re testing out vehicles as we speak, just to make sure it all works and that there are no issues.
“We have to operate a little bit differently than a gasoline fleet in terms of our reach in our coverage,” he adds. “I think we’re just at the cusp of being able to do this practically without losing our shirts and having to charge twice what it would be on a regular gas vehicle.”
Last-mile delivery is a huge cost for any retailer as it can account for more than 50 per cent of the total cost of shipping, and more than 40 per cent of total supply chain costs, according to a 2020 report from Accenture. But demand from large, powerful retailers for sustainable delivery is pushing others to find solutions, explains Pina Melchionna, president and chief executive officer of the Canadian Institute of Traffic and Transportation.
“These major retailers are now looking through their supply chain and asking the suppliers and anybody in their supply chain to make similar commitments,” says Ms. Melchionna.
Amazon, the world’s largest ecommerce platform, has announced several sustainable solutions to its delivery transportation, including 680 million packages already being delivered globally by electric vehicles.
IKEA has committed to having all customer deliveries and services across 30 markets using electric vehicles (EVs) or other zero-emission solutions by 2025. This is already happening in Shanghai, which has more than 900 home deliveries a day.
Jesse Steinberg, a research associate at the Conference Board of Canada who authored a paper on sustainable urban last mile delivery solutions, says that while cities can’t control the level of commerce experienced in urban centres they can affect elements such as land use and transportation planning, which can have a profound impact.
“One of the things that we were encouraging cities to look at are things like parcel locker systems,” says Mr. Steinberg, explaining that the idea is for couriers to deliver packages to a central location, like a transit stop, allowing people to pick up their packages at the lockers. “What this does is help consolidate packages for shippers and reduce the amount of travel overall involved in an e-commerce transaction.”
Other suggestions included curb management and dedicated delivery parking so that delivery vehicles don’t have to circle around trying to find parking or idle their vehicles. Or preferential parking for electric delivery trucks.
In Europe, cities are using cyclelogistics, the incorporation of bicycles into the goods movement journey, as a greener solution that also decreases congestion on busy streets. By creating micro hubs around an urban centre, the goods can move from the larger warehouses, usually on the outskirts, further into the city and then use cargo cycles as the final leg of delivery.
“It’s a model that has a lot of potential to it,” says Mr. Steinberg, adding that cities are getting creative about these micro hubs, using shipping containers or other flexible spaces. “In Montreal there has been a micro hub cycle logistics pilot where they’ve been using a decommissioned bus station that the city essentially bought and has leased out to delivery companies.”
With Koorier’s launch only months away, Mr. Kolbuc says he believes it’s time to give consumers the sustainable delivery options they have made clear they want and need.
“We can’t be everywhere in Canada, but we’re going to cover all the major cities, so that every shipment that a customer gives us for delivery is done on an electric vehicle,” he says. “Because being 100 per cent sustainable was our mission from day one and now consumers will be able to click that button.”