Richa Sahay, leader of content and communities for automotive, supply chain and transport industries at the World Economic Forum, examined how COVID-19 has structurally shifted the last mile ecosystem, including the trends and technologies that will have the largest impact on the logistics sector. She explained that last mile transport was already seeing an increase in demand prior to the pandemic, due in large part to the scale of urbanisation and growth in e-commerce channels. Sahay introduced the initiative from the WEF and McKinsey & Co to address the negative impact of the increased demand, for example the impact of carbon emissions and traffic congestion.
Sahay highlighted four areas of structural changes that are already happening the last mile: accelerating technological deployment (e.g. contactless deliveries, electrification of vehicles, inner city testing autonomous deliveries), tightening city regulations (London LEZ, government support for decarbonisation & other green economic stimulus packages across the world), and consumer habits shifting to take into account the sustainability of their choices (over half of millennials choosing alternatives to home delivery, over half of all consumers are conscious of the environmental issues related to e-commerce). Sahay explained that city authorities, in partnership with supply chain businesses, can combine selected interventions to produce beneficial outcomes for all stakeholders. The potential impact across the entire delivery process is a 30% decrease in local emissions and cutting costs by a quarter.
Sahay stressed key areas for supply chain professionals to focus on: the sustainability perspective (dramtically reducing emissions and easing congestion), and the economic perspective (unlocking breakthrough business models while minimizing disruptions to employment).
Sandra Roling, Progam Lead at the Climate Group, explained the EV100 initiative, a corporate leadership scheme that has brought together 88 international companies who have committed to set the example in their own operations by going electric in their own operations by 2030. This entails switching their own fleets to EVs, installing their own charging/customer charging, and asking their service providers to offer EV based services.
Roling asserted that within in the next decade we need to halve emissions and that businesses have a major opportunity to help with this, especially when it comes to clean transport. Two thirds of new vehicle registrations in Europe are made to businesses, and as an NGO working to reduce climate change, this is a key focus of the EV100 initiative.
Are business leaders solely responsible for driving the change towards green recovery, and if not who is?
Sandra Roling (SR): Ultimately, transport is a system: it is made up of many different parts, there is no single stakeholder. The Climate is not waiting for us to recover from covid. In thinking about a post-covid recovery strategy, it is imperative to include sustainability goals in this as all. There is an opportunity here.
Richa Sahay (RS): Companies have seen greater volumes nad higher demands, and a real reliance when it comes to ecommerce. Not just about getting to the consumer faster, but delivering a broader range of things (food, medicine) – companies are thinking more critically about transportation systems. Consumers have gone through a rollercoaster through lockdown: people previously unreliable on ecommerce have had to learn to live with it. Consumers are realising just how unsustainable packaging has become as past of the requirements surrounding covid. I have a real sense of optimism for comps and cons for more sustainable and safe ways of delivering to consumers. There will be a surge in demand for more sustainble ways of getting their goods.
How can different industry verticals (logistics, retail, delivery) are reacting differntly to climate change? Are there any sectors lagging behind?
SR: The awareness is there across the board, which is a huge positive. DHL, for example, in the postal sector has 11,000 postal vans around the world. Inka group, or Ikea, have pledged 100% electric deliveries by 2025 (all 3rd party companies, . FlipCart, the largest online Indian retailer, is going fully electric by 2030.
What types of technologies and investments can help curb carbon emissions for the last mile?
RS: There is no ‘silver bullet’ technology for reducing carbon emission. It is a synergistic model that will help reduce carbon emissions, which has to include government regulation and intervention. Having said that, there are several technologies available currently that are ready to be deployed. We did a study of 24 different interventions that could reduce carbon emissions, and found that the one that has the largest impact is electric vehicles. Autonomous vehicles and parcel lockers also have the potential to have a lot of impact. Using technologies such as dynamic rerouting of delivery routes is important and effective; collaboration with local authorities and other businesses accelerates these changes.