E-commerce growth threatens 30% rise in urban delivery emissions, WEF report warns
Urban emissions from deliveries of e-commerce orders could surge by 30% in the world’s 100 biggest cities by 2030 unless action is urgently taken to reduce the environmental impact of the last-mile ecosystem, a hard-hitting World Economic Forum report has warned.
Growing demand for e-commerce delivery will result in 36% more delivery vehicles in inner cities by 2030, and, without effective intervention, urban last-mile delivery emissions and traffic congestion are on track to increase by over 30% in the top 100 cities globally, according to ‘The Future of the Last-Mile Ecosystem’ report.
But, more positively, it analyses 24 measures – including electric vehicles, droids and parcel lockers – that could help to reduce emissions and traffic congestion by 30%, and delivery cost by 25%, compared to the “do-nothing” scenario.
“Consumer demand for the convenience of online shopping and fast delivery is rising rapidly and companies are struggling to meet this demand with sustainable delivery options,” said Christoph Wolff, Head of Mobility, World Economic Forum. “Rising congestion and emissions from e-commerce delivery are already putting stress on city traffic patterns and this pressure will only rise from growing demand unless effective intervention is quickly taken by both cities and companies.”
Overall, the WEF analysis suggests that e-commerce growth will drive demand for urban last-mile delivery by 78% by 2030. In particular, demand for faster deliveries is rising, with same-day delivery growing by 36%, it noted.
Unchecked, this e-commerce growth would lead to 36% more delivery vehicles in the world’s top 100 cities and a resulting 30% rise in urban last-mile delivery emissions which could reach 25 million tons of CO2 emitted annually by 2030.
“The ‘last mile’ is a complex, interwoven topic as it involves many ecosystem stakeholders. We have always had trends affecting the last mile, but not at that speed and not in parallel, not at this global scale,” explained Bernd Heid, Senior Partner, McKinsey & Company.
However, effective interventions do exist, according to the WEF report, which was produced by the World Economic Forum, McKinsey & Company and the World Business Council for Sustainable Development (WBCSD).
Heid explained: “We see numerous technology and delivery chain solutions working independently. Our research shows, however, that in an 'ecosystem scenario' in which both public and private players work together effectively, delivery emissions and congestions could be reduced by 30% until 2030 when compared to a 'do nothing' scenario, and technology can help to bring delivery costs down by 25% at the same time.”
For example, options that have the greatest impact on reducing CO2 emissions include greener vehicle use choices, such as switching to battery electric or – in the long term – hydrogen electric vehicles. Even in scenarios driven only by consumer choice (not public-sector regulation), battery electric vehicles and hydrogen electric vehicles can reduce CO2 emissions by 16% and 24%, respectively.
Another intervention, dynamic rerouting, finds the best way to get from point to point through constant updates that reduce mileage and the time drivers need to deliver goods. Other solutions include pavement delivery by automated robots, or droids, and parcel lockers.
Another option is night-time delivery or delivery during adjacent times which can reduce congestion by 15% and can be best achieved through company choice and regulation. This intervention includes night runs by mainly electric vehicles during off-peak traffic times.
In addition, multi-brand parcel shops with packages from multiple delivery players improve consumer convenience and can ease congestion by 5% to 18%, depending on the scenario. However, they require logistics players to cooperate on retail space and build merged supply chains. Such a model would have a tremendous impact on the competitive dynamics in the logistics industry.
Overall, the best results from the model involve companies, regulators, drivers and citizens to contribute to the ecosystem and change behaviour, the WEF emphasised.
“Sustainable urban freight is the economic lifeline of cities of tomorrow where access and emissions are regulated,” commented Thomas Deloison, Director of Mobility, WBCSD. “We need to act at systems level to find the technology, policy and business-related interventions which will make a healthy and attractive urban environment possible. We hope to inform insightful discussions for private and public players through the simulation findings in our report.”
“A multiplayer approach is critical for optimizing the decrease in congestion and emissions while also decreasing delivery costs,” added Richa Sahay, Lead, Automotive and Supply Chain and Transport, World Economic Forum. “However, fully implementing such a scenario would require investment of approximately $12.7 billion for any city with around 2 million inhabitants by 2030. Generating insights and financing for such sustainable transitions is the next step of this initiative.”
In the next phase of its e-commerce delivery work, the World Economic Forum will apply the impact analysis of the report in upcoming projects with the cities of Amsterdam and Singapore.
