Urban logistics will be transformed over the coming decade by innovative delivery solutions as final-mile costs soar and regulations restrict operators, according to a new study from researchers Frost & Sullivan.
The US company’s recent analysis ‘Urban Logistics Opportunities—Last-Mile Innovation’ found that global logistics spending is expected to reach $10.6 trillion in 2020, with transportation accounting for the majority at 70%. Emerging technologies such as cloud computing, big data, and crowdsourcing, coupled with an influx of tech-savvy start-ups, are unbundling the value chain and transforming delivery models.
About two fifth of the overall logistics costs are associated with the last mile that are forcing providers to come up with newer innovative solutions to deliver packages within cities.
Frost & Sullivan predicts the market will rapidly move toward mobile freight brokerage-type, on-demand deliveries and autonomous technology, such as the use of drones and delivery bots which are set to solve the last mile delivery challenge by being more cost effective to end users with lesser regulatory mandates.
“Spiralling last-mile delivery costs and changing customer demands are causing retailers to rethink their strategies and look toward new business models such as click-and-collect, locker boxes, on-demand, and autonomous solutions,” said Vijay Narayanan Natarajan, Visionary Innovation Senior Research Analyst at Frost & Sullivan. “Moreover, the influx of start-ups in logistics has enabled innovative solutions that not only provide value-creation customized solutions for the consumer, but also tackle the inefficiencies currently witnessed.”
Further trends and developments driving growth include:
* Digital freight brokering platforms reducing empty miles by 8% to 10%;
* Shift toward low-emission and zero-emission solutions, such as use of low-carbon vehicles or bicycles;
* Fleet operators expanding their strategies by developing urban distribution centers for effective logistics management; and
* Retailers focusing on compact stores to reduce capital expenditure and bring products closer to a growing urban customer base.
“Rapid proliferation of connected technologies and solutions, and further advancements in autonomous applications could well usher in new innovations in logistics with delivery bots and drone solutions all set to be the future of urban deliveries,” noted Archana Devi Vidyasekar, Visionary Innovation Global Research Manager.
The study highlights the trends, drivers, new business models, technology scenarios, opportunities and innovations within e-commerce, omnichannel, retail, courier, and post that are set to disrupt the last-mile delivery market along with issues such as congestion and emission reductions, policies and regulations. It also includes case studies of key players and specific countries, including the UK and Germany.
