The growth of e-commerce and the expectation of immediate delivery is transforming how we buy everyday goods. We have become accustomed to getting what we want, when and where we want it. Thus, the logistics of moving goods around—namely warehousing, transportation, and delivery—are becoming some of the most critical development challenges for rapidly growing cities around the world.
And cities are only getting more crowded: The United Nations estimates that two-thirds of the world’s population will live in urban areas by 2050. Congestion, smog, and noise are getting worse. To help mitigate these problems, some cities are introducing regulations that require new models of transport, such as pedestrian-only or reduced-emissions zones, which can create implications for how people get around and how goods are delivered.
For example, London is working on goals to reduce congestion and pollution in its urban center, including instituting ultra-low emissions zones for all vehicles by 2019 and zero-emissions zones by 2025. These congestion-pricing programs charge a fee to the most-polluting vehicles when they enter the city during commuting and business hours. In New York City, where trucks and commercial vehicles account for the vast majority of freight movement into and within the city’s five boroughs, the city has trialed the concept of off-hours delivery, in which goods are delivered in the evening or early morning hours rather than during the business day, in an effort to reduce daytime congestion and decrease emissions associated with excessive idling.
Such programs require careful forethought and implementation. Mexico City introduced “hoy no circula” (no drive days), whereby the last digit of a license plate determined which day a vehicle could be operated in the city. People began buying additional vehicles to increase their transportation options, which over time resulted in a 13 percent rise in carbon monoxide levels, while having little impact on alleviating congestion, according to a Cal State University, Los Angeles, study.
But while many cities have focused on personal transportation and mass transit solutions in order to move people more efficiently and safely around an urban grid, much less attention has been paid to the role of logistics in supporting a better quality of life in urban areas.
The road to sustainable urban logistics
In 2017, UPS and GreenBiz conducted research to better understand the perceptions and challenges related to city logistics, and to uncover solutions and strategies that can contribute to a more environmentally sustainable urban center. Nearly two-thirds of research respondents felt there was insufficient collaboration across sectors, and 72 percent noted that businesses should work closely with city officials to identify and address urban environmental and social challenges.
I couldn’t agree more. The economies of scale that UPS brings to the table can accelerate the development and adoption of new approaches, but only if we work with a wide range of stakeholders. Here are a few examples of how we are partnering with city officials, vehicle manufacturers, and research institutions to ignite a new conversation about urban mobility and create innovative logistics solutions.
Partnerships with purpose
In 2012, we collaborated with the city of Hamburg to rethink package delivery in the city’s urban center. Hamburg’s city center is lined with narrow streets, which hampers modern delivery demands. Working with the city and local retailer association, we developed an innovative solution that replaced our large delivery vehicles with a smaller city-friendly fleet. Packages for the day’s deliveries are loaded into a storage container, which is delivered to the city center early in the morning. UPS drivers deliver packages from the container throughout the city center and in pedestrian-only zones by foot or by using electrically assisted tricycles designed to navigate narrow streets. What started as a pilot project is now scaling across other cities in Europe, most recently in Dublin and Munich. We are testing similar last-mile solutions in US cities as well, such as eBikes in Pittsburgh and Fort Lauderdale.
UPS has a long history with electric vehicles, having introduced them into our fleet in the 1930s. Electric vehicle technology plays an important role in our urban logistics efforts, as it provides a solution with zero tailpipe emissions. We’re collaborating with our supplier, Workhorse Group, to deploy electric delivery vehicles that are comparable in acquisition cost to conventional gasoline- or diesel-powered trucks—an industry first that removes a barrier to large-scale adoption. These new vehicles will need recharging, so in 2017 we joined a consortium in the United Kingdom to develop smart-grid technology that enables simultaneous recharging of an entire fleet of electric vehicles. If feasible, this technology will eliminate the need for expensive upgrades to the power grid.
We are also working with academic partners to research and engineer last-mile and “final 50 feet” solutions that allow us to test new technologies and help city officials inform municipal policies. Our partnership with the University of Washington’s Urban Freight Lab has led to a new understanding of delivery barriers and the impact of the built environment on city congestion. Similarly, a UPS-led summer studio class with Georgetown University and the Washington DC Department of Transportation utilized a collaborative approach to data sharing and applied research.
Collaborating on a path forward
An important lesson I’ve learned along the way is that developing new solutions to urban congestion, noise, and pollution is as much about partnership as it is about innovation. While there is no silver-bullet solution that will work in every city scenario, we’ve uncovered useful takeaways that can be applied to new projects in other cities.
Often, the early solution to solving congestion issues is to drive less. But city-dwellers want reliable access to goods, which reinforces the importance of e-commerce delivery into their neighborhoods. Instead, let’s shift the conversation to how we can drive smarter, using alternative vehicles and convenient package pick-up locations.
A blend of innovative technology and policy is essential. Big data applications, Internet of Things, and emerging technology advances can enable better urban mobility, but political action by local officials is equally important.
As with any city planning effort, developing mutually beneficial and sustainable e-commerce solutions requires engagement from all stakeholders. At UPS, we’ll continue to work with city officials, suppliers, academic institutions, and nonprofit partners to test new solutions, scale what works, and learn from what doesn’t.