Urban logistics is proving to be key sector in the ongoing health crisis. It will be a significant challenge once the world returns to normal again. Before the coronavirus crisis, e-commerce already accounted for 20% of total commerce in Spain. It is foreseeable that these figures will increase significantly from now. Online shopping involves advanced logistics, which includes the so-called last-mile delivery, one of its most important links. It is no coincidence that cities have been for years searching an eco-efficient model to ensure sustainable delivery of these and other goods. Madrid is no stranger to this debate. Madrid’s City Council announced in December that it intends to develop a special plan to regulate the urban distribution of goods within the city limits. The adoption of advanced measures in Madrid Nuevo Norte is also on the agenda, a project that represents a unique opportunity for implementing innovative models. Indeed, the project is currently searching for better alternatives for moving forward.
“There is a global trend towards greater growth of large cities, which further increases freight traffic”, stated Marc Nicolás, head of Mobility at the Association of Manufacturers and Distributors (Aecoc). “Furthermore, there has never been a strategic plan for this type of transport in an urban area, as there is for passenger transport”.
In the opinion of this expert from the association that brings together most consumer goods industries, e-commerce sales represent a tiny fraction of this challenge, albeit “the most conspicuous”. Indeed, these parcels account for only 5% of the goods transported daily to the city before the Covid-19 crisis. This figure could reach 10% in societies with broader adoption, such as the British one.
Online purchases have increased to record values during the coronavirus lockdown: “E-commerce has grown between 25% and 250% depending on the sector,” confirms Nicolás. According to the expert, the last-mile delivery logistics passed with flying colours this unprecedented challenge. “The retail sector is used to peak trading periods like Christmas or Black Friday; hence, they faced this growing demand effectively, staving off collapse”.
“Last-mile” logistics refers to the delivery of a good from a distribution centre to the end-user in an urban area. A route that, because of its characteristics, including multiple delivery points (“capillarity”) and smaller delivery vehicles, “is the most expensive by volume transported,” according to Nicolás.
The sheer volume of road vehicles fed into city streets is the real challenge faced in a typical urban context, leading to poor air quality, global warming and discomfort to the citizens. This volume increases further due to specific e-commerce issues, including the so-called “reverse logistics”, i.e. management of returned products, a subject for which no definitive solution has yet been found globally.
“No city wishes to forego urban distribution as it contributes to raising living standards and boosting the economy”, said Nicolás. “However, this does not preclude the need for short-term actions and solutions, always through public-private partnerships”.
Indeed, last-mile logistics has become the hottest topic between the industry experts in recent years, and a subject advocated by city councils of the largest cities. Aecoc has analysed the latest solutions applied in European cities to define their main strands of work.
A key proposal focuses on deploying a network of parcel collection lockers and delivery points for e-commerce. This requires, in principle, an urban space for such facilities; even though there are already partnership models in which local shops serve as delivery points. “A means to build synergies with local shops that are willing to serve as an online purchase fulfilment centre”, highlights Aecoc. This would reduce delivery failures (when no one picks up the parcel, which requires a new delivery attempt) and make it easier to handle returns. The association stresses the importance of compatibility between these lockers and all delivery operators to avoid multiplying infrastructures unnecessarily.
Further measures suggested by the association include digitising loading and unloading areas to generate big data, improve planning and proper sizing of these areas. There are already mobile applications that allow the operator to report arrival and departure times and extract real data on usage and peak and off-peak hours. Aecoc also emphasised the possibility of sharing logistics data between enterprises and government offices. After the logistics data is collected, the goal is to achieve improvements which favour all stakeholders.
In the case of more complex urban streets, Aecoc suggests that the same lane be used for different purposes, for instance, for freight distribution or as a bicycle lane during certain hours and for parking during the night-time. This would be based on a needs assessment and smart systems for flexible management. The association also proposes making access to loading and unloading operations more flexible, distributed across different hourly segments. Aecoc added that during the Covid-19 lockdown, this measure was adopted by “many large Spanish cities”, for instance, all metered parking spaces were free, and cities, such as Madrid and Barcelona, made it easier for larger LGVs to access the city centre.
In specific urban contexts, Aecoc also supports the creation of large logistics hubs closer to the city to minimise the distance travelled to the end destination, “shortening the last-mile”, explains Nicolás. Although this solution cannot be implemented in all cities and districts, according to the association’s representative, it may be appropriate for areas deemed suitable.
That is the case with Madrid Nuevo Norte, the largest urban regeneration project of the capital, which proposes this solution alongside others, including incentivising overnight delivery, digitisation and creating a network of collection lockers and pick-up points.
The Madrid Nuevo Norte project seeks to integrate the city’s logistics network and proposes creating a comprehensive network of micro-platforms and distribution points. All this would reduce the distance between warehouses and final delivery points, investing in smart mobility. This innovative network would provide a more permeable system, reducing and optimising the traffic flow of delivery vehicles across the city.
Madrid Nuevo Norte has recently obtained the final approval. The administrations involved in the process – state, regional and municipal- are committed to this project as the great catalyst of the regional economy in the foreseeable future. Initiatives to create quality employment and activate key sectors will be more necessary than ever to drive the recovery as the worst of the crisis passes. This growth should be sustainable, with a focus on significant urban challenges. Therefore, steps must be taken to incorporate the most advanced measures into urban logistics, a vital area of the future city.