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The future of last mile

11 September 2023

The war in Ukraine is expected to boost drone technology and its application in civilian life. Ellis Shelton says drones will have a role to play in last mile delivery.

AS A result of thousands of online competitors being made available at the customer’s fingertips, fleet efficiency is paramount for logistics businesses to help ensure last mile deliveries are implemented to support the online boom.

To remain competitive, businesses must increase parcel volume distribution, expedite deliveries and meet customer expectations while also reducing costs to fund their shipping operations. 

The UK’s last mile delivery market has the potential to expand by almost 10% in revenue terms between 2022-2029. Last mile deliveries play a vital role for all sectors of the economy as they are responsible for transporting the goods to their final destinations, whether domestic or commercial  

However, with last mile deliveries representing the most complex and sometimes expensive part of the shipping process, logistics businesses need to identify cost effective solutions to deliver for customers looking for reliable, fast, and flexible delivery times. Consequently, many businesses are reporting financial losses as last mile shipping has the potential to account for 53% of a shipment’s total costs. 

The environmental impact of deliveries is a key priority for the logistics industry, with companies investing significantly in technology and automation solutions to revolutionise last mile deliveries and ensure operations remain aligned with the UK’s 2050 net zero commitment. It is estimated that drones could cut costs by up to 48% and provide the logistics industry with rapid distribution and delivery services in place of time-consuming activities for short journeys. By 2030, it is estimated that 76,000 drones will be in use within the UK - 11,000 of which will be operating within the transport and logistics sector alone. Automation of logistics of this type can help increase efficiency, reduce delivery times caused by congestion, and minimise the chance of human error. Alongside this, eco-friendly initiatives such as electric and hydrogen-powered vehicles are essential for reducing carbon emissions and ensuring environmental sustainability. 

Thorough planning needs to be considered when delivering within both rural and urban areas as the result of either congested infrastructure in built-up places or the lack of it in more remote areas. For example, in rural areas, drop off points can be several miles apart with only one or two packages being delivered per delivery. This compares to city deliveries where the stop proximity will be more frequent, resulting in more packages being delivered in a single day, but will be more subject to traffic congestion and delays. Opening micro-fulfilment centres that are strategically placed within densely populated areas will help to alleviate these pressures in urban cities and effectively optimise last mile deliveries. 

As it stands, the transport infrastructure that is in place to support the utilisation of last mile deliveries is insufficient for the ambition and requirements of the logistics industry in the future. The reliance on delivery drivers to fulfil time-sensitive drop offs will need to come under review to meet future needs. Logistics UK believes that a combination of technology, sustainability, urban planning, and customer-centric strategies is crucial to utilise last minute deliveries effectively, as well as collaboration between industry stakeholders and government bodies.

Ellis Shelton, policy advisor, Logistics UK 

For more information, visit www.logistics.org.uk