The Future of Urban Last Mile Deliveries - Not a piece of cake

Abstract: Urban last mile delivery has become an increasingly relevant topic in this day and age, where the urban population is growing at the same time as climate change forces nations to limit emissions. The demand for fast and flexible deliveries in urban areas accelerates, which further escalates the need to optimize these last mile deliveries since they are the most polluting part of the supply chain. Previous research on the topic is scarce, and has mostly focused on the Business-to-Consumer (B2C) perspective. As there are not just residents, but also many businesses operating in urban areas, it is also interesting to look at the Business-to-Business (B2B) deliveries that take place in cities. In this single case study, the last mile delivery from a B2B perspective is examined in Stockholm, Sweden. The purpose is to examine how the case company should improve its distribution and last mile delivery setup in Stockholm to better meet the customers’ expectations and needs, and at the same time consider costs and externalities. The analysis included mapping the customers’ general expectations to identify gaps between this and the current last mile delivery setup of the case company. The study showed that business customers demand frequent, reliable and flexible deliveries, but they also value sustainable deliveries highly and will toughen their demands on sustainable deliveries in the coming 5–10 years. The Swedish policy makers will likewise increase their sustainability demands on the transport sector in the coming years. Customer willingness to pay for more sustainable choices is however very low, and it is therefore hard for companies to see such investments as financially viable. Although in order to stay relevant on the market, it will be necessary for the company to make such investments, as well as implementing additional solutions to increase the flexibility and transparency of deliveries. It was furthermore found that the best way forward for the case company was to outsource the urban last mile delivery operations in Stockholm to a 3PL provider with more knowledge and resources in the area.