Author: Joris Beckers, University of Antwerp
Almost all attempts to decrease the impact of the last-mile go through the carrier. Carriers are asked to consolidate in hubs, use pick-up points, or deliver outside specific time windows to reduce emissions and kilometres in dense urban areas. Yet, the effects of these attempts are somewhat limited. The lack of success is due to a combination of unsustainable business models, a reluctance to collaborate, and a hyper-competitive market. Just for the sake of it, companies are not going to change their optimised operations.
Companies will change, though, when their clients tell them to. If end consumers demand delivery at pick-up points, DHL, UPS, or GLS will drop their parcels at pick-up points. Or when consumers demand a package on Saturday and not within 24 hours, PostNL and FedEx will move from an ‘as-fast-as-possible’ strategy to a tailored one. However, we need to connect consumers and carriers to make this work, which is difficult given that the shipper contracts the carrier, and the consumer has little to say. To change this, we propose a Logistics-as-a-Service or LaaS.
The idea of the LaaS is that consumers can receive the logistics services they want. Yet, a dynamic pricing algorithm providing the effective costs of these services, such as a fast delivery or a scheduled slot on the weekend, is required to make the LaaS work. The LaaS is not only about facilitating this interaction; it means to nudge it. In the Flanders Living Lab of GREEN-LOG, the cities of Ghent, Mechelen, and Leuven will translate their urban logistics policy goals into business rules. Coupling a reward program with these rules will nudge consumers to elect the delivery alternative corresponding to the city’s objectives. Given the consumer’s choice, carriers are then incentivised to act.
In summary, we see three benefits in the LaaS:
1. A better understanding of the receiver leads to better logistics
- There is a willingness to pay for logistics services (Hagen & Scheel-Kopeinig, 2021; Nguyen et al., 2019), and carriers can optimise their operations by understanding them.
2. Confronting the receiver with their logistics decisions increases awareness
- Raised awareness of the actual logistics costs results in fairer pricing for delivery alternatives (Kiba-Janiak et al., 2022)
3. Incentivisation of sustainable alternatives
- Regulatory role for local policy to increase the uptake of sustainable delivery alternatives
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