Convenient and sustainable: developing an out-of-home delivery strategy

This article is adapted from a presentation given at Leaders in Logistics Summit 2022 in Copenhagen. Click here to watch the talk in full.

Last mile sustainability is getting worse, not better. While carbon emissions per parcel are creeping downwards for many carriers thanks to their good work, the growth in parcel volume is enormous and completely overwhelms the positive impact of any increased carbon efficiency. As a result the industry overall is still emitting much more carbon than ever before, and those emissions are likely to increase.

Currently, parcel volume growth inevitably leads to higher emissions. In a home-delivery-first model, increased parcel volumes translate directly into more miles being driven. More miles being driven means more emissions.

We have to change these equations to make a difference. Firstly, there’s lots of ambition to decarbonise transport and parcel delivery, but there’s a long way to go and electrification, usually touted as the key puzzle piece, is still far from a panacea. The timeline to fully electric fleets remains long-term and there’s a huge carbon cost to creating and deploying these new vehicles, plus additional electricity consumption does still have a carbon cost associated with it thanks to the nature of most national power grids.

We can more directly reduce miles driven per parcel by increasing drop density. We have ways of doing that which exist in the market today – consolidating deliveries in a many-to-one delivery model, i.e. out-of-home deliveries.

By increasing the number of parcels delivered at single locations, and reducing the proportion of failed deliveries, out-of-home deliveries significantly reduce the number of miles drivers need to cover to deliver the same volume of parcels.

InPost CEO Rafał Brzoska says that an average delivery driver manages to drop 70-80 parcels per shift, where an InPost driver can achieve 1,000 parcels delivered. DHL ran a simulation where using their Service Points, drivers delivered the same volume of parcels having driven 38% of the distance as home delivery drop-offs would have required.“The average parcel home-delivery driver will maybe deliver 70-80 parcels during a daily shift… ours will do 1,000 parcels a day.”

How consumers use the out-of-home network is fundamental to success. Data from a nationwide study of Belgian pickup point usage gives great insight into when OOH is truly beneficial for emissions reduction.

In short, if customers drive to the pickup point, especially as a journey they wouldn’t otherwise make, out-of-home delivery is less sustainable than home delivery – delivery drivers are using carefully planned routes and delivering many parcels on that route, so have a higher parcels per km than a customer picking up one or two items from a pickup point.

However, the majority of the time, this is not how pickup points were used in the study – a clear majority of consumers trip-chained or used low-emissions transport methods or both, resulting in massive emissions reductions versus home delivery.

Carriers need to:

For carriers to become more sustainable, they first need to understand how parcel recipients access their networks, by tracking behaviour across location types and regions. When this data is in place, they can analyse their own routing and measure GHG emissions saved through OOH deliveries.

Combining both sets of data gives the most accurate picture of OOH sustainability, and allows carriers to start promoting OOH delivery with sustainability messaging that is compelling for consumers and useful for merchants, who are keen to offer measurably sustainable delivery options at the checkout.

Overall, increasing the proportion of deliveries happening through OOH networks will enable carriers to deliver the same volumes in fewer miles driven, which directly reduces GHG emissions and buys time for initiatives like electrification to become more realistic widespread options for green delivery.

We help carriers develop out-of-home networks and strategies that can achieve greater sustainability and delivery cost reduction. Talk to our team today to get started.