Municipalities and logisticians must collaborate if we are to deliver sustainable last mile logistics

Urban logistics needs cooperation between logistics transporters and public authorities, to create a model that serves the end-customer.

The world’s population has grown from just over two billion in 1950 to approximately eight billion today. More than half of the people in the world now live in urban areas.

Recently, in countries with highly developed consumer cultures, this explosion of the urban population has been associated with new ways of consuming, especially with online shopping. These have had an effect on logistics in cities. The authorities are increasingly facing a series of problems, linked to urban mobility, specifically in terms of the delivery vehicles. Apart from the obvious problem of congestion, the most negative consequences are related to noise and pollution.

These municipal and regional authorities often struggle to come to terms with the problems they face. They also lack sufficient knowledge about the logistical challenges, of delivering more packages, to a greater size of businesses and customers.

It is they who define the rules and regulations that govern the cities. However, it is the private logistics companies, who lead the way in terms of knowledge and experience. It is they who are driving change.

Decisions need to be taken quickly for the logistics of the future. The level of pollution generated by these activities, estimated at 30% of urban pollution, increased risks, and improvements in urban logistics, are essential, given that 20% of city traffic today is generated by the logistics activities.

There is also a clear demand from citizens and consumers to make substantial and meaningful changes. They themselves adopt more responsible purchasing behaviours and delivery choices. They are willing to adapt and to accept alternative solutions. It is the responsibility of logistics stakeholders to provide the solutions, which satisfy the customers’ needs, and at the same time mitigate the negative aspects of city life.

The COVID-19 crisis has undeniably focused the attention of the public and politicians on supply chains. Other trends have also accelerated, such as the adoption of e-commerce reinforcing the local distribution networks, client expectations regarding speed and the real-time tracking of deliveries, innovative delivery methods, and the inclusion of small businesses within the “at-home” delivery chain, for the logistics of the future.

It is becoming urgent to react and develop a new model: a model with closer cooperation between the logistics transporters and public authorities, to serve the end-customer, via urban logistics.

The current model is based on each distributor, having their own logistics infrastructure and transport strategies, which is neither economically sustainable, nor environmentally satisfactory. The solution could require a single logistics operator, for a specific sector of a city. Here, the urban logistics subsidiary’s CEO Alfonso López explains, “The development of collaborative micro-hubs could be the opportunity to initiate the required collaboration between the various stakeholders involved in urban distribution.”

Municipalities must play their part, by implementing measures which only they can; legislating to organise and reserve the limited space within the city, required for the new logistical solutions. But, Alfonso López adds, “To get things moving, the logistic operators should be setting up initial collaborations themselves, to get started, ahead of the authorities”.

National government also has a role to play, in the future of the logistics. Without national coordination, there will be reduced inter-regional flexibility and a disincentive for the private sector to invest.

Boosted by European Union programmes, municipalities have started to produce the overall strategies for urban logistics, and with the logistics sector, they are trialling and developing the logistics solutions of tomorrow.

FM Logistic, through its city logistics solution, is an enthusiastic participant in these programmes. Working with the city of Madrid, we investigated the effectiveness of urban consolidation centres (UCC) using electric vehicles. By comparing flows from a single suburban warehouse, to those combined with a UCC or Proximity Hub, the initial results show that the emissions and congestion were both reduced.

Another project in Madrid developed and tested a prototype, of a 12-ton ultra-low emission electric cargo vehicle, in real conditions.

“At FM Logistic, we understand the problems the cities are facing, in terms of mobility and emissions, and we are committed to being a part of the search for new solutions, to a more sustainable urban delivery and micro- logistics system,” says Alfonso López.

However, to make a greater impact in the logistics of the future, the innovation must be of a legislative nature. This has to come from the local and regional governments, supported in the true spirit of cooperation, by the hands-on expertise of the logistics sector.

To read more about the Urban Logistics challenges and solutions, download the FM Logistic White paper.