The Road to Sustainable Urban Logistics. A 2017 UPS/GreenBiz Research Study

Transcription

1 The Road to Sustainable Urban Logistics A 2017 UPS/GreenBiz Research Study

2 Executive Summary The sustainability of urban logistics is an important issue for rapidly growing cities worldwide. Although many cities have developed strategies to move people more efficiently and safely within the urban environment, much less attention has been paid to the importance of delivering goods to people at work and home. It is an issue hiding in plain sight, as urban infrastructure is often not designed to accommodate critical logistics services. Crowded streets, with no parking available and poor curbside access to buildings have become iconic images of urban living. At the same time, city goals to promote greater quality of life, and reduce air pollution and congestion, often are accompanied by regulations focused on personal vehicle use, without regard for the impact on commercial vehicles. This approach overlooks an important point; urban life is deeply intertwined with sustainable e-commerce and access to goods. Sustainable e-commerce solutions can function as a kind of shared mobility for goods and services, similar to the way in which buses provide a more efficient option for personal travel than single-occupancy vehicles. When combined effectively, consolidated shipments on environmentally-focused vehicles using datadriven routing can provide a step forward. While no two cities are alike, it is important to have the tools and governance in place to design and execute an urban freight plan. This is especially important as city leadership may change with each election cycle, and most changes are difficult to complete in a single term. UPS partnered with GreenBiz to research the challenges associated with logistics in dense urban environments and, perhaps more importantly, to highlight some of the solutions and strategies that can contribute to a more environmentally sustainable city center. For the purposes of this study, logistics is defined as the warehousing, transportation and delivery of an organization s goods. GreenBiz conducted both quantitative and qualitative research to understand these challenges as well as what will be necessary to move toward a more sustainable approach for maintaining the flow of goods in urban environments. These include: Engaging and educating stakeholders on the tradeoffs involved in moving people, in addition to the goods and services they require, for a healthy, safe, and equitable environment. Partnering with natural conveners such as academic labs and NGOs that can facilitate urban planning discussions across multiple city administrations and local government entities. Becoming data-driven in making policy decisions and, where practical, evaluating and testing solutions in advance of full-scale deployment. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 2

3 Introduction Cities today are more congested than ever before. A recent United Nations report documents that more than half of the world s population lives in urban areas, a proportion that is expected to increase to 66 percent by As a result, there is an overwhelming influx of issues such as congestion, air pollution and an increased demand for goods, creating logistical challenges that will need both economically feasible and environmentally sustainable solutions. According to John Wilmoth, Director of the United Nations Department of Economic and Social Affairs Population Division, Managing urban areas has become one of the most important development challenges of the 21st century. Our success or failure in building sustainable cities will be a major factor in the success of the post-2015 UN development agenda. The increase in urbanization brings with it a number of challenges. By far though, the biggest challenges from an infrastructure and quality of life standpoint can be summarized in two words: congestion and pollution. When looking for solutions to congestion and pollution, there is no silver bullet, and the challenges are complexly intertwined. Many cities have concentrated on personal transportation (and the mass transit solutions Managing urban areas has become one of the most important development challenges of the 21st century. Our success or failure in building sustainable cities will be a major factor in the success of the post-2015 UN development agenda. John Wilmoth, Director of the United Nations Department of Economic and Social Affairs Population Division designed to alleviate these issues). At the same time, an increasing number of cities around the world are opening up a second front in the war against pollution and congestion they are looking at urban logistics and looking for innovative new solutions. In 2015, Americans were stuck in traffic for eight billion hours, with Los Angeles commuters each spending more than 104 hours a year in congestion. This is not a uniquely American problem: commuters in Moscow spend more than 90 hours stalled in traffic and similar delays are found in Bogota (79 hours), Sao Paolo (77 hours) and London (73 hours). 3

4 Introduction Commute times are only one part of a much broader conversation that society is beginning to have around urban design. Urbanites are asking themselves what their cities should look like, and what will make them pleasant places where they can live, work, shop and raise their families. Many cities have developed strategies to move people more efficiently and safely within the urban environment, but much less attention has been paid to the importance of goods delivery and logistics. It is an issue hiding in plain sight. The movement of goods is an essential function in a city; there is a vital need to have materials available to support businesses and residents. However, this often means competition for traffic lanes and parking spaces. With the current trajectory, as e-commerce and on-demand shipments increase, along with demand for immediate delivery, the result is more single-piece deliveries to individuals and ultimately, more vehicles on the road if no sustainable measures are put in place. To address increasing congestion, many cities have committed to more sustainable mobility options, such as biking, by providing bike lanes. While beneficial for encouraging commute options, these efforts alone will only help reduce congestion if the number of personal vehicles on the streets is reduced. Urban congestion is essentially a problem of competing priorities, and requires collaboration to create solutions. It is our hope that this report will provide a starting point for the dialogue that must occur between diverse groups of urban stakeholders. Well-managed city logistic operations can provide an opportunity to improve the overall urban environment, with reduced congestion and better air quality, enhanced safety and greater mobility and access, resulting in better cities and a healthier quality of life. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 4

5 Business in the Urban Environment UPS commissioned GreenBiz to conduct a quantitative survey of large and small businesses (those with revenues greater than $1 billion and those with revenues less than that, respectively) to understand their perspectives when it came to conducting business in cities. Most companies are concerned about the implications to business associated with growing cities. Seventy-six percent of respondents reported their companies are either aware (31 percent) or very aware (45 percent) of those business challenges. Yet, only 47 percent feel prepared to address them. When asked to identify the top two issues of concern in regard to the urban environment, 58 percent identified air quality and 53 percent noted traffic congestion. This far surpassed other factors such as more convenient public transit, safety and traffic noise. To address how air quality is impacted by commercial vehicles, a number of cities are encouraging carriers to explore alternative fuels. Compressed natural gas (CNG) and propane are lower-emission, petroleum-based alternatives that are readily available and work well in North America, whereas the emphasis in much of Europe is on zero-tailpipe solutions, such as electric vehicles. Not at all aware 4% COMPANIES SURVEYED RECOGNIZE THEIR BUSINESS CHALLENGES 95%OF IN GROWING CITIES. Very aware 45% Aware 31% Somewhat aware 19% THE TOP TWO ISSUES BUSINESSES ARE CONCERNED ABOUT IN THE URBAN ENVIRONMENT ARE AIR QUALITY AND TRAFFIC CONGESTION. 58% Air quality 53% Traffic congestion Convenience of public transportation Other Safety Noise 8% 18% 34% 31% UPS The Road to Sustainable Urban Logistics ups.com/sustainability 5

6 Business in the Urban Environment According to Matthias Winkenbach, Director of MIT s Megacity Logistics Lab, Electric vehicles offer a huge potential because urban logistics operations are not so much affected by the typical constraints of electric vehicles such as a need for extended range. Although businesses identified air quality as a top concern, which would typically include particulates, NOx, etc., few are measuring the greenhouse gas (GHG) emissions associated with the shipping or delivery of their products. While our survey showed that both large and small businesses have established environmental goals (84 percent and 64 percent, respectively), the rigor of collecting GHG emissions data is not as extensive when it comes to the shipping or delivery of an organization s products or materials. Of those surveyed, only 55 percent of large businesses and 17 percent of small businesses collect this data. Without this information, an accurate understanding of potential GHG reductions is not possible. Peter Harris, UPS s Director of Sustainability for Europe, adds that, In Europe, diesel trucks will soon no longer be an acceptable part of the future. Partly because it is diesel and therefore part of the emissions problem, and partly because it is a truck and therefore part of the congestion problem. Clearly that is a business risk, but it is also an opportunity for leadership. Both scope 1&3 Scope 3 only Scope 1 only 45% OR 19% 18% 17% FORTY-FIVE PERCENT OF BUSINESSES WITH REVENUES GREATER THAN $1 BILLION DO NOT COLLECT GHG EMISSIONS DATA ASSOCIATED WITH SHIPPING DELIVERING THEIR PRODUCTS. City Profiles London Creates Low Emissions Zones In London, city officials are planning to expand and accelerate the Ultra Low Emissions Zone to further reduce emissions of NO2 and particulate matter in the city center. Working with the Freight Electric Vehicles in Urban Europe project, UPS converted select model delivery trucks from diesel to electric power, which eliminates tailpipe emissions and circumvents the limited availability of brand new electric delivery vehicles. At year-end 2016, UPS was operating 52 electric vehicles in central London approximately 30 percent of its fleet in the city center 40 of which were diesel-to-electric conversion vehicles. In 2016, UPS concluded a successful test of a range-extended electric vehicle, which carries a small generator that recharges the batteries and automatically turns on or off when entering or leaving the city center. This can serve long-range routes while still operating as a fully electric vehicle in the city. UPS will deploy up to 15 range-extended electric vehicles in the U.K. in In addition, with support from the U.K. government, UPS is currently working with U.K. Power Networks and Cross River Partnership to deploy smart charging technologies in its central London facility. These technologies will dramatically reduce the cost of getting power to the growing fleet of electric vehicles based there compared to conventional power supply upgrade methods an essential development if the electrification of transport is to reach scale in our cities. In a parallel development also supported by the U.K. government, UPS is working with Fernhay, Skotkonung, the University of Huddersfield and Outspoken to develop a zero-truck cycle logistics system suited to a megacity environment. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 6

7 A Problem of Congestion City Profiles Arguably, nowhere in the U.S. is mobility more impacted by congestion than in Los Angeles. According to Seleta Reynolds, Los Angeles Department of Transportation General Manager, We might have reached the edge of improvements in congestion that we can impact through operational changes, such as making signal timing more responsive or having parking lanes that become traffic lanes in the afternoon. And notably, we have a very ambitious capital program to bring subway and light rail to restore high-capacity transit throughout the city. But all these efforts are still not enough to deal with congestion management. More than anywhere else in the world, Americans are car-dependent. Many cities are trying to move some of those trips to other modes such as mass transit, biking or walking, and away from personal vehicle use because for most cities, there is no more available land to build more roads. Los Angeles Considers Congestion Pricing The Los Angeles Mobility Plan 2035 places a citywide emphasis on safety, access and health. There is also a strong focus on socio-economic equity in a city where if you cannot afford a vehicle, your upward mobility is extremely limited. Los Angeles Department of Transportation s General Manager Seleta Reynolds sees transportation as the connective tissue that can increase equity and safety throughout the region. Very much a concern Some concern A small concern Not at all a concern 91% 9% NINETY-ONE PERCENT OF THE 523 WHO RESPONDED WERE CONCERNED ABOUT THE IMPACT OF URBAN TRAFFIC CONGESTION ON THEIR BUSINESS. 30% 35% 26% It is the city s job to make sure that everyone has access to transportation and that it remains affordable, says Reynolds. One of our challenges is that the cost of driving a car is invisible to people. The way they use that infrastructure is so different from the way we use the infrastructure that delivers water and power. We pay for that based on our use and the cost of it is more transparent to us. But we do not pay for road infrastructure that way and so, as a result, we have bottomless demand for its use and no way to currently manage that. These conditions could set the stage for introducing a congestion-pricing scheme such as that instituted in London, where fees are charged during commuting and business hours to enter the city. But that may be a hard sell for a city like Los Angeles, with more than seven and a half million registered vehicles. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 7

8 A Problem of Congestion While often overlooked in transportation planning, goods transport and delivery drive the economy of a city. According to University of Washington s Anne Goodchild, Director of the Urban Freight Lab, Most cities do not have a freight plan. They have a transportation plan, a bike master plan, a transit master plan. But freight has not been something cities have been planning for. A number of problems can arise for cities that implement initiatives without considering an overall freight plan. In Mexico City, city officials created Hoy No Circula (no drive days) to combat congestion and pollution. Under this scheme, the last digit of a license plate determines which day a vehicle cannot be operated. While well intended, citizens as well as logistics operators began incorporating additional vehicles to increase their transportation options. Vehicles were purchased or leased based on availability and affordability, rather than environmental soundness. According to a Cal State University Los Angeles study, this scheme over time has resulted in a 13 percent rise in carbon monoxide levels and has had little impact on alleviating congestion. In European cities where access restrictions are based on maximum vehicle size, they may be solving for one problem while creating others. To meet demand, carriers must deploy a greater number of smaller vehicles, and that can also increase congestion as well as GHG emissions, and deteriorate air quality, depending on the vehicles used. City Profiles Hamburg Trials Micro Depots and Cargo Bikes Hamburg s inner city is lined with narrow streets and the infrastructure struggles to keep up with modern demands. Commercial vehicles make streets impassable and parking is often nonexistent. In addressing increased demand for urban logistics services, additional roads were not an option. The city needed solutions that would not disrupt the infrastructure already in place. And it had to be both environmentally sustainable and economically feasible. The city partnered with UPS on some innovative solutions. The world s largest transportation and logistics company proposed replacing its large delivery vehicles with a smaller, city-friendly fleet in Hamburg. UPS drivers pick up deliveries from micro depots, which are essentially storage containers of consolidated shipments in the center of the city. UPS drivers then use alternative methods, including walkers, conventional tricycles and electrically-assisted tricycles, to make deliveries throughout the city center and in pedestrian-only zones. This not only helps reduce congestion, but is also more environmentally responsible. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 8

9 The Impact of E-Commerce and the Need for Greater Planning The challenges of increased pollution and congestion are being compounded by the rise in business-to-consumer or e-commerce. MIT s Winkenbach notes, Urbanization often goes hand-in-hand with an increase in the average affluence of a city. Urban customers tend to order more online and those goods are shipped to him or her directly rather than being picked up at a retail store. This rising affluence also comes along with a rising expectation with regards to service level. This creates a conflict as logistics operations become more complex, costly and difficult to control. Meanwhile customers demand faster, more reliable and more flexible delivery options. The rise in e-commerce transactions is creating an increase in the volume of packages to be delivered which, if not supported by sustainable logistics practices, could result in even more vehicles on the road and an increase in congestion and emissions. We asked survey respondents how much the rise in e-commerce, increased urbanization and congestion have affected how they conduct business in cities. This is clearly an issue, as 81 percent of respondents see some form of impact on their business. 81% 81 PERCENT OF THE 474 WHO RESPONDED WERE CONCERNED WITH HOW MUCH THE RISE OF E-COMMERCE, INCREASED URBANIZATION AND CONGESTION HAD AFFECTED HOW THEY CONDUCT BUSINESS IN URBAN AREAS. Significant impact Moderate impact Some impact No impact at all 21% 21% 19% 39% UPS The Road to Sustainable Urban Logistics ups.com/sustainability 9

10 The Impact of E-Commerce and the Need for Greater Planning In parallel, there is a proliferation of smaller operators and even on-demand car services, such as Uber, handling deliveries in an unconsolidated and inefficient manner. That can lead to a dramatic increase of under-loaded cars, vans and trucks on city streets, contributing more pollution and congestion. Traditionally, smaller, City Profiles China Rapidly Responds to Rising E-Commerce Deliveries Thirty billion parcels were delivered in China in 2016, representing an increase of 10 billion, or 53 percent more than This rapid growth is causing problems when it comes to last mile delivery. However, according to Nikkei Asian Review, this will also provide a source for opportunities whether it is asking consumers to provide the last mile or using an Uber-like crowdsourcing model to deliver parcels. Online retailers are experimenting with lockers, or what they are calling mini depots, where final delivery by a courier is replaced by self-pickup by the consumer. The lockers have been deployed on-demand delivery companies design logistics processes and distribution networks that are based on dynamic responsiveness, rather than efficiency. This will not be sustainable moving forward. And it shows very clearly the benefit of consolidated delivery models that place multiple deliveries on the same by independent organizations so that multiple delivery services can utilize them. JD.com is one of the largest e-commerce companies in China. One of the company s business units (referred to as O2O, or onlineto-offline) works with local businesses such as grocery stores, delivering a wide range of goods and services to people s homes, from food to laundered clothes. Home deliveries are one of the company s fastest growing businesses. It also recently purchased Dada Nexus, a firm that leads the country s crowdsourced delivery market with 1.3 million registered delivery personnel. These three approaches lockers, store delivery and crowdsourcing are just a few of the ways logistics providers are working to address the scale of delivery in China s megacities. vehicle in many ways, serving as the public transportation for goods. But while consolidating deliveries within a dedicated fleet of vehicles helps with congestion and pollution more than unconsolidated methods, it does not fully resolve the issues. As logistics providers serving urban areas deal with increased complexity and uncertainty, the clear way to understand, manage and plan for it is to be more datadriven. Unfortunately, not all of the necessary data exists. As Dr. Goodchild notes, What happens in the absence of data is that cities come up with ideas and then implement them without a lot of participation from the private sector, or without a lot of insight into what the impact will be. Both University of Washington s Urban Freight Lab and MIT s Megacity Logistics Lab are working toward collecting the data and creating the tools that can help cities plan for a more sustainable infrastructure for goods transport and delivery. Dr. Winkenbach notes that, Using richer or higher-resolution data to develop better models helps us build more optimized urban logistics networks that really capture much of the true uncertainty and variability in an urban market. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 10

11 The Impact of E-Commerce and the Need for Greater Planning Instead of being a congestion multiplier, efficient, data-driven, sustainable e-commerce actually may stand to reduce personal vehicle use. In this sense, facilitating sustainable urban logistics should be seen as entirely aligned with city goals to promote increased quality of life. Delivery traffic also represents a small fraction of overall traffic, but is an exponentially more important driver of economic importance. Cities aiming to become more walkable and bikeable, with reduced congestion and better air quality, would be remiss to overlook the importance of freight and delivery services in their decision-making. Far from being a problem, sustainable e-commerce and logistics solutions represent a parallel opportunity that should help cities achieve their broader quality of life goals. City Profiles Central and South America Use Mobile Payments to Enable Nanostore Delivery Efficiency In much of Central and South America, residents in cities are served by nanostores mom-andpop outlets that serve low-income consumers. These stores can be carts or garages with fifteen square yards of retail shelving. Due to their small size, they carry very little inventory and therefore require regular replenishment. According to the MIT Megacity Logistics Lab, the number of nanostores is large. In Mexico, Coca- Cola supplies 1.2 million points of sale. In Mexico City alone, Unilever delivers ice cream to more than 10,000 freezers. One of the key challenges for delivering products to nanostores is that they are largely run on a cash basis. This has meant that each company tends to make their own deliveries to collect payment. In Mexico City, beer and soda trucks traveled delivery routes where neither truck was fully utilized, and the driver was required to not only deliver goods but also collect payments. With the advent of electronic payments via cell phone, it will be possible for logistics companies to consolidate and coordinate last mile delivery operations and payments can be posted for each supplier digitally. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 11

12 Collaboration Is Key It is clear that there are major barriers to providing more sustainable and efficient urban logistics, with 65 percent of businesses responding to our survey highlighting insufficient collaboration across sectors, and 64 percent citing a lack of critical infrastructure. While these issues rose to the top, lack of investment, leadership accountability and governance were also identified as major challenges to overcome. If these barriers are not addressed and if cities cannot improve management, then businesses and residents will suffer. When asked to identify issues impacting their organizations as a result of increases in urban populations and the way cities are being managed, nearly a third of all respondents noted some impact associated with delivering goods in an urban environment. In addition to having a wide variety of approaches, such as congestion pricing or vehicle size restrictions, many cities have different visions of what they want to become. As UPS s Harris notes, City organizations like C40 [a network of the world s megacities committed to addressing climate change] and others can have a certain degree of effectiveness when it comes to harmonization, but we are never going to take away the desire INSUFFICIENT COLLABORATION AND LACK OF CRITICAL INFRASTRUCTURE ARE THE BIGGEST BARRIERS TO MORE EFFICIENT AND SUSTAINABLE URBAN LOGISTICS. Lack of investment in innovative solutions Lack of leadership and accountability Governance Demand superseding capability Other Challenges in meeting e-commerce customer expectations Challenges in deliveries to retail locations Challenges in meeting city requirements for emission levels Delivery challenges resulting from city transportation regulations Challenges in deliveries to residential customers 13% 25% 65% Insufficient collaboration across sectors 36% 49% 56% 64% Lack of critical infrastructure BUSINESSES ARE FACING ISSUES DUE TO URBAN POPULATION GROWTH AND THE WAY IN WHICH CITIES ARE BEING MANAGED. 33% 32% 31% 30% 29% UPS The Road to Sustainable Urban Logistics ups.com/sustainability 12

13 Collaboration is Key of a mayor to want to be able to be different from the last mayor. City officials are also seeking to differentiate their cities from others in order to drive preference among businesses and residents, who provide the revenue base that helps cities thrive. To avoid making decisions or passing laws that result in unintended consequences, city officials will need to collaborate with logistics providers to address these challenges. Based upon the study, businesses see a role for themselves at the table. 72 percent of respondents believe that businesses should work closely with city officials in identifying and addressing urban environmental and social challenges. While no two cities are alike, it is important to have the tools and governance in place to design and execute an urban freight plan. This is especially important as city leadership may change with each election cycle, and most changes are difficult to complete in a single term. According to Ani Dasgupta, World Resources Institute s (WRI) Global Director of the Ross Center for Sustainable Cities, If you want to continue a path of reform or change, you really BUSINESS LOOKS TO CONTRIBUTE TO A MORE SUSTAINABLE URBAN ENVIRONMENT. 72% Businesses should work closely with city officials in identifying and addressing urban environmential and social challenges 63% Businesses should take a proactive role in identifying and addressing urban environmential and social challenges 7% Businesses should be responsible for their own opperations and impact, but have no responsibility beyond that need a coalition that can sustain or live beyond a single mayor. That is why you need to bring all of the interested parties together so the momentum of change is sustained for a longer time. Dasgupta goes on to share how his organization often finds that even inside a city administration, different departments are not talking to each other as much as they should. This is why it is important to bring cities and businesses and communities and civil society together. When asked which stakeholders should be engaged to address congestion and other mobility-related issues in urban environments, respondents answered that, in essence, everyone should have a seat at the table. There are a large number of innovative ideas to consider when approaching the development of a freight-accommodating citywide logistics plan (see Delivering the Goods ). The economies of scale that shipping and delivery companies bring to help develop these solutions can accelerate the piloting and adoption of new approaches, but only in collaboration with a wide range of stakeholders, according to UPS Senior Director of Industrial Engineering, Ed Rogers. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 13

14 Collaboration is Key From a sustainability standpoint, this is a precompetitive space. We want the whole pickup and delivery industry to be more efficient and have a lower impact on the environment and on the social structures of a city. UPS s Harris presents an optimistic perspective, This is inherently a decentralized issue. It is complicated but it is also good in another sense. Cities, being independent, can move very quickly. They can become fountains of innovation where national and regional governments tend to be much slower and more bureaucratic in their approach. A DIVERSE SET OF STAKEHOLDERS SHOULD BE ENGAGED TO ADDRESS CONGESTION AND OTHER MOBILITY-RELATED ISSUES IN URBAN ENVIRONMENTS. Public transit officials Business owners operating in the city Logistic delivery services (UPS, etc.) Residents City Chief Resilience Officers Personal mobility providers (e.g., taxis, Uber/Lyft, etc.) Citizen advocates Other 16% 98% 93% 86% 81% 78% 76% 73% City Profiles New York City Makes Off-Hours Delivery Trucks and commercial vehicles are critical to the economic vitality of New York City (NYC), which accounts for the vast majority of freight movement into and within the city s five boroughs. In order to reduce daytime congestion and decrease emissions associated with excessive idling, NYC 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. The success of the project is largely based on the multi-stakeholder cooperation between public- and private-sector partners, community advocates and trade organizations. As reported during the 8th Annual Conference on City Logistics, The path to implementation began when the project demonstrated how it could benefit all stakeholders: citizens and bicyclists would enjoy enhanced quality of life with less interference from deliveries; the urban economy would be improved by lower delivery costs; carriers would benefit from increased productivity; receivers would enjoy increased reliability; day-hour travelers would experience faster travel speeds; and with the use of low-noise truck technologies, local communities would not be impacted by night noise. For some of the businesses involved, such as restaurants and hotels, the results of the pilot program were impressive. Median service times in the off-hours were as low as 25 minutes for one delivery, whereas median service time from 7 a.m. to 4 p.m. all exceed one hour per delivery. Median speeds for deliveries from customer to customer were higher and no parking fines were reported during the pilot, reduced from what had been costs of about $1,000 per month per truck. Unfortunately, this is not a one-size-fits-all solution as it is impractical for many instances of residential and office deliveries. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 14

15 Delivering the Goods One of the biggest challenges for a logistics provider is the last mile, the movement of goods from a transportation hub to its final destination. As urban environments present unique challenges for fulfilling last mile deliveries, there are a number of organizations working on innovative solutions. As UPS s Rogers notes, There is so much hype on the Internet about various start-up companies testing new models and technologies that separating fact from fiction is sometimes difficult. Below are some technologies that are in use around the world and may eventually operate at scale. Importantly, though, there is no silver bullet to urban delivery, no single solution that is appropriate for every city scenario. Reducing congestion and enhancing quality of life demands a collaborative approach with the private sector, which should foster innovation and broader use of emerging technologies. Electrically-assisted bikes (ebikes) ebikes are equipped with battery-powered electric motors that make it possible to cover longer distances, carry substantial loads and navigate hills and other terrain. Maximum energy efficiency is achieved when combining battery power and human power simultaneously. The ebikes work in combination with a centralized container, which can be brought into the city during non-peak hours. Cycle logistics Cycle logistics incorporates ebikes, trikes and even foot-powered walkers all integrated with a centralized container strategy and augmented by Electric Vehicles. Having a variety of options available creates the ability to serve cities in the most efficient way possible, allowing for adaptation all the way down to individual city blocks. Alternative fuel vehicles A fully-loaded, zero-emission delivery vehicle can be an effective way to reduce the number of inefficient, less-environmentallysound delivery vehicles on the road. As new technologies, such as renewable hydrogen fuel cells, emerge, the number of viable alternatives is increasing. Unmanned deliveries Much has been written about autonomous vehicles and drones, and both of these technologies are advancing at a rapid pace, in many ways faster than the regulatory environment, and insurance industry are prepared to respond. 15

16 Delivering the Goods Delivery lockers In the U.S., federal law prevents any entity other than the Postal Service to deliver to a mailbox without the required postage, and in Europe most countries require home deliveries to be attended to obtain a signature of receipt. Apartment buildings and businesses are being fitted (or retrofitted) to house package rooms or delivery lockers that can be accessed via key card or cell phone, an accepted replacement for a signature. Lockers are also finding a place in public locations, such as retail stores and subway terminals, to allow for quick access from a centralized point. It may sound like a modern logistics riddle, but what do you get when you combine unmanned deliveries with delivery lockers? The answer is autonomous vehicles equipped with lockers that can drive to a neighborhood (or campus or church or mall or soccer field) and park for the day to allow local residents to retrieve their purchased goods. Robotic deliveries Delivery bots are more personalized versions of autonomous lockers and are showing up in cities as pilot tests are rolled out. Think of R2D2 opened with an access code to retrieve your goods. In the boot Package theft is a challenge for goods delivery but Volvo and other automobile manufacturers are experimenting with in-car delivery services. A smartphone app can be assigned a onetime digital key to access the customer s trunk (or boot, in Britain). This provides a safe and convenient delivery and could be especially useful in garages and car parks. Additive manufacturing By employing what is often referred to as 3D printing, the logistics effort of getting goods into the city is significantly reduced because things can be printed closer to a customer s location, and you need to supply only the raw materials that can be used across many different products. Park and walk Low-tech approaches are being piloted as well. In Washington, DC s Foggy Bottom neighborhood, UPS drivers discovered that it was more efficient for them to park their truck and use a handcart to deliver packages than to move the truck through the street to complete deliveries. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 16

17 The Way Forward The public officials, academics, logistics providers and others interviewed all stressed the importance of addressing each city s mobility and urban logistics plans uniquely. However, while each city is different in its own way, there are important takeaways that can be applied to cities around the world. Engage and educate all stakeholders and help them understand the tradeoffs that are made in approaches to moving people as well as the goods and services they require for a healthy, safe and equitable environment. Partner with natural conveners such as academic labs and NGOs that can facilitate urban planning discussions across multiple administrations Be data-driven in making policy decisions and, where practical, evaluate and test solutions in advance of full-scale deployment. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 17

18 About the Research This report summarizes results of both quantitative and qualitative research. The quantitative results presented in this report are based on a survey of the GreenBiz Intelligence Panel, consisting of executives and thought leaders in the area of corporate environmental strategy and performance. Panel members participate in brief monthly surveys to provide their expertise and perspective on corporate initiatives, laws and regulations and scientific advances that are shaping the corporate sustainability agenda. The Road to Sustainable Urban Logistics presents the findings of qualitative research, along with an online survey conducted by GreenBiz in June 2017 among a sample of respondents within the GreenBiz Intelligence Panel. An link was sent to the panel s 3,520 members inviting them to participate anonymously in the survey. For the purposes of this report, we analyzed the results from 612 respondents who represent 14 sectors. Approximately 67 percent of these respondents are based in the U.S. Twenty-eight percent of respondents are from organizations with revenues greater than $1 billion. It is important to note that the quantitative data in the report reflects the demographic of the GreenBiz panel the responding companies represent a broad span of diverse corporate sustainability experience, including those just beginning to engage in corporate sustainability as well as those that have been engaged for years. The qualitative research consisted of oneon-one phone interviews with city leaders, academics, fleet operators, nonprofits, retail organizations and other subject matter experts. UPS The Road to Sustainable Urban Logistics ups.com/sustainability 18

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