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Urban Goods Delivery
Innovations in goods delivery, from drones to courier network services, are changing how goods are delivered to us.
Goods delivery refers to the shipping and fulfillment process of e-commerce and its effects on communities, as well as the urban design implications and considerations the process brings with it. While the effects that e-commerce goods delivery has on urban areas are often the most visible, this process affects suburban and rural communities as well.
Variables to consider
E-commerce retailers usually offer up to three delivery types: standard delivery, same-day delivery, and hourly/instant delivery. Traditional delivery operates in a similar fashion to mail-order retail, where a retailer ships an order to a customer via various shipping carriers upon order receipt. Same-day delivery typically utilizes either in-house logistics or third-party delivery and fulfillment contractors, while hourly or instant delivery options may use either an in-house employee or courier network service (CNS).
In-house logistics and third-party delivery
In order to fulfill orders quickly and cost effectively, e-commerce retailers offering same-day delivery may use either in-house logistics chains or third-party delivery contractors rather than conventional shipping options for deliveries. By handling their own shipping in-house, retailers can better control delivery schedules and processing times. Using delivery contractors allows retailers to avoid having to provide benefits, liability insurance, and other employment-related support to their delivery drivers.
Courier network services
When same-day delivery is not fast enough, e-commerce retailers may utilize a CNS to provide hourly or instant deliveries. This allows retailers to leverage the ad hoc nature of a CNS network to respond to delivery requests organically without needing to hire and maintain employees of their own. In some cases, the retailer and the CNS will be the same entity, operating solely on an on-demand basis. In other cases, the CNS might be a third-party entity or an in-house department of a larger e-commerce retail operation—or even an in-house department of a larger transportation network company (TNC) operation, such as with Uber Eats.
- Delivery accessibility is a key driver of the widespread success of e-commerce goods delivery. Rather than needing to go to a physical storefront, retrieve purchased goods, and return with them, e-commerce goods delivery provides the option to have items delivered directly or very near to a customer, wherever they might be at the time. This removes the need for a vehicle, as well as the time required to retrieve purchased goods.
- Delivery speed is another significant element in the success of e-commerce goods delivery, particularly in the case of same-day or faster deliveries. Coupled with the accessibility described above, customers can have items delivered to them while they do something else, saving them the time that would normally be required to travel to and from a brick-and-mortar retailer.
- Customer convenience overall factors heavily into the widespread usage of e-commerce goods delivery. Outside of access or speed considerations, e-commerce goods delivery allows people to receive items they purchase online without any significant involvement in the process on their behalf. Items are delivered directly to them.
- Traffic congestion is a byproduct of e-commerce goods delivery. As more people purchase items through e-commerce retailers, more delivery vehicles are necessarily added to existing traffic flows. In addition to adding to slowdowns on roadways themselves, delivery vehicles also add to parking problems by double-parking for long periods of time and impeding traffic or by taking up already limited parking space. This is particularly an issue in dense urban areas.
- Building design and access are not always configured to easily accommodate e-commerce goods delivery. This is particularly the case with controlled access buildings—delivery drivers may not be able to get to a customer’s front door, the building may not have sufficient space to accept package deliveries, or both. Deliveries by in-house logistics chains and CNSs are especially prone to being affected by this, as they may lack access agreements with buildings that more conventional shipping companies might have.
- Labor and equity issues are both common in e-commerce goods delivery. E-commerce delivery requirements can be taxing for shipping and fulfillment workers, with periods of high demand such as holiday seasons pushing workers past healthy or safe limits. In-house logistics workers, third-party delivery contractors, and CNS contractors can also face low pay, limited or no benefits, and unsafe or highly stressful working environments as e-commerce retailers aim to maximize benefits while minimizing liability and costs.
- Online retailers such as Amazon, Alibaba, JD.com/Jingdong, and eBay are some of the largest providers of e-commerce goods delivery, though other smaller or more focused online e-commerce retailers also participate.
- Certain brick-and-mortar retailers such as Walmart, Barnes & Noble, Safeway, and Tesco provide goods delivery options in addition to in-store shopping.
- Dedicated CNS companies such as Postmates, Grubhub, and Caviar base their business models around delivering items such as food and grocery store purchases to customers on an ad hoc basis.
Use case examples
- E-commerce goods delivery can be used to acquire specific or specialty items. This can include items brick-and-mortar retailers don’t typically stock or stock at a certain price point, as well as items that are temporarily out of stock or have a temporarily inflated price.
- E-commerce goods delivery can be used when getting to or from a brick-and-mortar retailer isn’t feasible. This can include situations where a brick-and-mortar retailer is nearby but is unreachable due to health or logistical considerations as well as situations where a specific retailer is not located in the nearby area.
- E-commerce goods delivery can simply provide speed and convenience. Even if no other factors are present, the ability to acquire goods quickly and efficiently without needing to travel anywhere is often reason enough to warrant the use of e-commerce goods delivery.
Pilots & developments
January 2009 – FedEx adds two electric-assist tricycles to their delivery fleet in Paris, France.
September 2011 – Amazon installs delivery lockers, named Amazon Hub Lockers, in New York City, Seattle, and London, allowing multiple packages to be delivered at one stop. As of June 2018, Amazon Hub Lockers are located in more than 900 cities worldwide. These lockers reduce delivery costs and reduce the likelihood of package theft.
February 2012 – UPS launches their first electric-assist delivery pilot in Hamburg, Germany.
October 2014 – UPS announces their own version of the Amazon Hub Locker, UPS Access Point Lockers.
November 2016 – Starship Technologies, a robot delivery manufacturer, makes its delivery robots commercially available in the United States.
December 2016 – UPS announces a pilot program to test electric-assist tricycles for urban deliveries in Portland, Oregon—the first in the United States.
January 2018 – Amazon announces that more than 5 billion items were shipped with their Prime subscription service in 2017.
January 2018 – Researchers at the University of Washington’s Urban Freight Lab coin the term, the “final 50 feet” of delivery, referring to the final leg of between the curb and the destination address. The researchers find that is the most expensive and most time-consuming leg of goods delivery.
June 2018 – Nuro and Kroger join together to form the first partnership between an autonomous delivery company and a grocery store and pilot autonomous grocery delivery in Scottsdale, Arizona.
June 2019 – Amazon’s CEO of Amazon Worldwide Consumer, announces that “within months” packages ordered through Amazon Prime will begin to be delivered by drone.
Policies, Pilots, and approaches
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