ANALYSIS: Green Last Mile Europe 2024 Report

Rising global temperatures, which are estimated to warm by about 1.0°C above pre-industrial levels and potentially reach the critical threshold of 1.5°C between 2027 and 2042, highlight urgent environmental challenges.

These challenges are exacerbated by greenhouse gas emissions associated with the recent increase in e-commerce and parcel delivery vehicles.

UPIDO forecast predicts e-commerce parcel delivery could emit up to 5.5 million metric tons of CO2 by 2032 highlights the need for drastic action in the logistics sector to mitigate these effects. More importantly, we could potentially reduce this carbon footprint by over 91% in just ten years or, more visually, save over one forest the size of the Black Forest in that time.

Commitment to sustainable development

The significant carbon footprint of last-mile delivery, which accounts for 40% of all e-commerce emissions, is due in part to traditional, inefficient delivery methods. Despite widespread claims by logistics stakeholders about green policies, there remains a pervasive problem of “eco-shaming” in which real progress towards sustainability is often overestimated.

However, some companies are showing real commitment by implementing more sustainable practices, such as increasing the use of lockers and PUDOs or eco-friendly vehicles. First-time home delivery failure – which can be as high as 25% and incurs high costs – poses further challenges. Research suggests that where efficient and dense OOH networks exist, moving parcels to nearby parcel lockers or PUDOs can reduce CO emissions2 emissions by up to two thirds in urban areas. We also believe it is important to explore how the sharing economy can promote a greener approach to last-mile delivery.

This includes, but is not limited to, strategies:

• Shared transport arrangements: Independent transport operators, including courier, express and parcel (CEP) providers, should cooperate to share vehicles. Ideally, these vehicles should be low or zero emission to minimize environmental impact;
• Implement shared parcel lockers: Instead of competing carriers operating inefficient, overlapping networks, a unified shared parcel locker system open to all courier companies would increase reach and reduce waste.

Although the sharing economy poses challenges and requires unique business models, it fits well with environmental goals. Several innovative solutions are being explored to improve the green last mile. These include parcel pickup boxes, smart door locks and in-car delivery, with parcel lockers and PUDO locations expected to be the main drivers of alternative delivery methods. Initiatives such as Quadient’s Open Locker network in the UK and new OOH partnerships in Poland are seen as positive steps towards denser and more effective OOH networks.

Improving city logistics

As urban areas become increasingly congested, non-fossil fuel vehicles and electric cargo bicycles are becoming increasingly important for sustainable urban logistics, offering significant reductions in air pollution and traffic congestion. Regulatory changes in many major cities around the world are promoting these sustainable modes of transport, increasing their profitability and use.

Looking to the future, the last-mile delivery sector is poised for transformational change with the emergence of autonomous delivery systems, on-the-go manufacturing and robotic stores on wheels.

Advanced technologies such as drones (UAVs) and autonomous ground vehicles (AGVs) are improving, but it will be some time before they can provide cost-effective and environmentally friendly alternatives for large-scale parcel delivery, especially considering safety concerns , regulatory issues and social acceptance.

Meanwhile, concepts such as crowdsourced delivery are emerging as flexible and eco-friendly alternatives that leverage existing travel and clean modes of transport, although they require solid management to ensure reliability and trust.

Demand

Overall, as climate awareness increases, consumers increasingly value sustainable supply options, which are expected to become more common and sought after, driven by consumer demand and technological advances. Currently, the cost of the green alternative continues to be an issue for consumers and this is another reason why OOH delivery is crucial, as it offers the opportunity to provide cheap and low-carbon delivery.

While there has been a concerted effort to transition to more sustainable last-mile delivery options, the implementation of OOH delivery continues to face adoption challenges due to consumer preferences for direct home delivery in many markets.

What will you find in this report?

• The report covers last mile green projects of all logistics organizations and CEPs that have shared information about their green initiatives in the European arena, as well as selected other projects that we managed to identify based on desk research or expert interviews;
• In the footnotes you will find interactive links to data sources (if applicable);
• We also try to identify the most promising initiatives and extrapolate what their impact could be if implemented on a broader scale;
• We look at Ukraine, where there is a war going on, but at the same time we care about the environment and develop low-emission solutions until the last mile.

What are the sources and methodology?

The main sources of the report are:

• Extensive CEP market research, including company press releases, websites and other sources;
• Using the results of the advanced UPIDO internet search algorithm to estimate CO2 emissions in 27 EU countries as well as in Norway, Switzerland and the UK;
• Published information on the environmental impact of CEP last mile;
• Interviews with senior market experts;
• Last Mile experts have in-depth, expert knowledge;
• Collaboration with subject matter experts, including our partner SwipBox, our colleagues Will Simpson from Kantar, Marta Cudziło from Łukasiewicz Poznań Institute of Technology, Mathilde Carlier from Statista, Vytautas Atkocaitis from Vinted Go and our partners Last Mile Experts who submitted their sustainable projects;
• Where actual or published data is not available, we have made estimates based on our market knowledge.

Projects and case studies

• All business cases were described by the solution owners and were not subject to modification by Last Mile Experts;
• Both the content and vocabulary used in the descriptions come from the authors and project owners;
• Last Mile Experts is not liable, legally or civilly, for any inaccuracies and errors in project descriptions.

To receive a copy of the report, please register on the Last Mile Experts website.