Bala Ganesh, senior director of marketing for the US 2020 Team at UPS, blogs about how future logistics models need to adapt to cope with surging city populations.
We need a new model of logistics to ensure those city dwellers get what they want, when they want it – and in a sustainable fashion.
By 2050, two-thirds of all people will live in a city. This means roads will get even more congested. Air quality in those urban areas will likely worsen. And the demand for goods in megacities will further test already strained transportation networks.
In some bigger cities, such problems have already surfaced. There are restrictions on when commercial vehicles can enter city limits. Some do so on even-numbered days. Others get the odd ones. And for many logistics providers, night-time delivery may become a requirement.
It’s not all that different from Ancient Rome, when wagons and carriages were barred from even entering the city during the day.
You certainly couldn’t blame city officials today for looking for ways to mitigate the effects of mass urbanization.
Luckily, this doesn’t have to be a doomsday scenario.
Forward-looking logistics companies like UPS have started transitioning to a model tailor-made for the cities of tomorrow.
The latest UPS Corporate Sustainability Report showcases how goods can flow freely in environmentally conscious ways, even in the world’s busiest cities.
A big-city twist on the supply chain
Strict travel restrictions in major cities can remove vehicles from the road during rush hour. What they can’t do, however, is convince a customer to receive a package only in the middle of the night.
So how do you create a distribution network that can dispense packages during the daytime without gridlocking an entire city?
The answer is multifaceted. And the solution has to be both economically feasible and environmentally sustainable.
As outlined in the UPS Corporate Sustainability Report, there are a number of ways to limit vehicle emissions and meet the delivery needs of those living in megacities.
Governments, customers and stakeholders all have a role to play in developing more sophisticated transportation systems.
Putting vision into action
For example, in London, where there is a congestion charge zone in the city centre and strict environmental regulations in place, UPS is working with the European Union’s Freight Electric Vehicles in Urban Europe (FREVUE) project to transform its delivery network.
There are now 28 electric trucks operating in London, with another 40 expected in the next few years – the ultimate goal is an all-electric fleet in London’s city centre.
Across European cities like Amsterdam, Rotterdam and Hamburg, UPS has nearly 80 electric vehicles meeting the needs of customers.
UPS recently started testing an electrically supported cargo bike for the delivery and pickup of packages in downtown Basel, Switzerland.
Such efforts extend beyond developing alternative modes of transportation.
You might be familiar with UPS Access Point locations, which allow customers to pick up their packages from a central area, such as a convenience store, effectively eliminating failed drop-off attempts – and reducing vehicle emissions.
In partnership with Shell, UPS has rolled out Access Point locations across the globe. These spots act as mini-hubs, enabling drivers to drop off a larger number of packages at once. This can happen during hours with minimal impact on traffic.
Augmenting these services is a growing focus on “final-mile” deliveries. Think of it as a ride-sharing program for packages. Bicycles, push carts and other economically friendly modes of transportation can handle the last leg in a given supply chain, helping delivery trucks avoid the most congested areas in a city.
The rise in urban consumer spending creates a growth opportunity if you make cities more sustainable.
This is not a task that an individual business, or even a number of the world’s largest companies, can accomplish without help.
Governments, customers and stakeholders all have a role to play in developing more sophisticated transportation systems, capable of fitting seamlessly into a city’s infrastructure.
Our approach is to engage with city officials and provide thought leadership as we work toward collaborative solutions, advocating for the harmonization of regulations so that delivery companies can innovate as efficiently as possible.
The mass migration to cities isn’t slowing down anytime soon. Neither should your work to construct a supply chain flexible enough to meet a city’s demands.
This steady increase in urban consumer spending is a huge opportunity for growth. But that’s only if you make the cities where customers live more sustainable.
- Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.