Authors: Dr. Jean-Paul Rodrigue, Dr. Laetitia Dablanc
Last-mile facilities are designed to support the final segment or urban deliveries, mostly through deconsolidation to delivery vehicles.
a. Fast Delivery Hubs
Three main types of distribution facilities support last-mile for urban deliveries, which is taking place in specific urban areas (e.g. districts or neighborhoods). The first involves fast delivery hubs supplying the local market with pre-positioned high demand or perishable goods. The fast delivery market is highly specialized and segmented due to the variety of goods it delivers, from parcels to groceries and parts for maintenance and repairs. The second type involves delivery stations where parcels are loaded on vans for home deliveries or to delivery points. The third type of facilities is composed of freight stations allowing for local delivery points, instead of a delivery to an address.
The purpose of a fast delivery hub is to supply time-dependent fulfillment requests. To do so, they jointly act as a fulfillment center and a distribution hub for last-mile logistics. By carrying a smaller number of high demand items and by being positioned in high-density areas, fast delivery hubs are designed to improve the velocity of urban deliveries. This allows for better response times through the benefits of being strategically positioned. Fast delivery hubs are commonly used for e-commerce, the deliveries of groceries, and perishable goods as well as for restaurant deliveries. The cargo handled by fast delivery hubs can either be placed directly on delivery vans (or other conveyances), sent to a sortation center, or to a delivery station.
Another form of fast delivery hub involves the conversion of a retail facility, allowing for pickup and deliveries, which can reduce. costs since additional distribution centers are not required. However, this requires several important modifications to standard retail procedures. Fulfillment capabilities need to be available, allowing for the retrieval of inventory (often from store shelves) to be packaged for customer pick up or for delivery (own account or through a third party). Also, store employees need to be trained to perform a new set of related tasks such as order retrieval and preparation (packaging, boxing, labeling). Further, fast delivery hubs require real-time inventory management to track the location of the inventory within the facility as well as providing accurate information about the inventory that can be made available for online sales. This approach is particularly relevant when the provider (e.g. retailer) has a network of facilities allowing to maximize customer accessibility.
b. Delivery Stations, micro-hubs
Delivery stations are flow-based facilities specializing in deconsolidation of urban deliveries by breaking loads for last-mile deliveries. They have emerged to support the growing quantities of urban deliveries, a trend that is particularly driven by e-commerce. Delivery stations allow for the final load break in an area covered by its delivery routes. Cargo can be delivered to a delivery station in full truckloads, which are deconsolidated into unit loads for delivery routes. They tend to have a small footprint and located at accessible locations close to (or in) central areas. Depending on the density, regulations, physiography, and environmental conditions a variety of delivery vehicles can be used, such as vans, electric vehicles, or cargo bicycles. With the advent of drone technology and automated vehicles, some delivery stations could also be used as a delivery hub for these vehicles.
Delivery stations are designed and positioned to support a specific modal option for urban deliveries as each mode requires a custom-designed facility (load units, access ramps, bay doors). Joint operations are possible, particularly if the load unit is similar. Otherwise, a specific area within the delivery station must be allocated to different vehicles, such as trucks and vans. A specialization of delivery stations according to the weight of the delivery is also emerging, particularly for e-commerce. Since bulky and heavy cargo (furniture, appliances) requires special handling equipment and procedures, their last-mile deliveries can require a specialized facility and delivery vehicles.
‘Micro-hubs‘ are small delivery stations in dense urban areas. They are most often used in networks of micro-hubs, for parcel express delivery operators willing to transform last mile delivery into faster and cleaner operations. From micro-hubs, vehicles such as cargo-cycles or small electric vans are used to delivery parcels quickly to the final consumer. They can be implemented underground in car parks, or in areas of cities that are not used anymore such as former gas stations and industrial or retail properties.
c. Freight Stations
Freight stations are facilities designed as a pickup point for deliveries, instead of direct deliveries to the final delivery location. They compensate for the local lack of accessibility associated with congestion and parking difficulties. They can be implemented at a central location in a high-density area or in a reserved area within a large building facility. They come in two main categories: pickup points, composed of local stores (convenience stores, dry cleaners, florists, etc.) and automated lockers. Local stores have the opportunity to convert a share of the footprint as a pickup point, particularly if they are in a high pedestrian traffic area. This includes subway stations, shopping malls, and high-density commercial streets. Automated lockers are being actively implemented in high parcel demand locations such as convenience stores, grocery stores, gas stations, and campus residences or condominiums. They are becoming an integral part of the design of lobbies in new residential and commercial developments.and made available to property managers so that they can be installed in apartment buildings and office complexes.
A clustering effect in the location of lockers is noticed around high income and education level neighborhoods (universities, hospitals, research centers) since such clusters are easier to service along a sequential delivery route from a delivery station. Urban areas have larger numbers of pick-up points than suburban or rural areas, underlining the function of density. Further, in suburban and rural areas, pick-up points are more likely located along main commercial streets.
As the demand for freight distribution taking place in urban areas continues to grow, last mile facilities will be designed and implemented to ensure that deliveries account for lower externalities such as congestion, energy consumption and carbon footprint.