Last mile, or the “holy grail” of the new millennium

Antonio Perini, CEO and founder at Milkman | March 16th, 2016

Many people ask us: why has the last mile (the last stretch of home delivery, the one that brings products to your home) become a topic of conversation not only for insiders but also among the general public?

Just imagine: you are comfortably lying on the couch with your tablet on your lap. You read that the latest smartphone (the one you want badly) is finally on the market. So you order it from Amazon using Prime Now. Fifteen minutes later a warehouse worker puts the phone in a van that leaves for your house. Amazon, however, suggests you other products. It knows you well, sometimes better than yourself. In fact, among these products are two books by your favourite authors. You want them, but there’s no haste, so you choose the cheapest price at different shops. A few hours later two warehouse workers, from different parts of Italy, put the books in two vans, which are also directed towards your home.

If you multiply these actions for millions of online sales (indeed, Amazon has 54 million Prime users just in the US), you will realize that the pressure that our digital shopping, too often perceived as abstract, exerts not only on national and international logistics, but also on the environment, is great. We’re on the couch, probably complaining for the cost of delivery or asking why on earth is the threshold for free delivery set so high, while three vans are on the streets for us!

Everyone is talking about logistics, and this is because e-commerce is on the rise. But in order to continue growing, it needs a disruptive solution to the issue of transportation. Just in Italy – which accounts for only 3.1% of the European e-commerce market – online shopping has grown by 165% in the last five years, and generates today a turnover of €16.6 billion.

Another element influencing the upsurging evolution of the T&L (Transport & Logistics) industry is food delivery, that has become a trend on a global scale. Food delivery is divided into two branches: grocery, generating in Italy a turnover of €400 million, and meal delivery (not just pizza but, in the last two years, meals from other restaurants as well). Its growth is undeniable: In 2015 in Italy there have been 13 funding operations by hundreds thousands Euros, twice as much as the year before.

To keep pace with such a disruptive growth, the logistics industry has explored a limited number of solutions – you can count them on your fingertips. These are mostly aimed at making faster and more sustainable deliveries.

The most attractive but probably less viable option is that of drones. Amazon and Google, among others, are investing millions in drone research, but, as evidenced by Time, the difficulties you encounter in an unexplored area like this are many. Some open questions are: should drones fly out of their pilot’s sight? How high should they fly? Should they deliver right on our doorsteps, risking to bump into trees, light poles, people, and so on?

The most widespread solution to date are pick-up points: shops that, in exchange for little money, offer to store parcels until the owner comes and collects them. The greenest solution, instead, are bike or foot delivery, or electric vans, bikes and cars. Parcel lockers are rather practical and effective: they are computerized lockers where you store parcels and then collect them using a key or password. Finally, delivery can also be managed through platforms designed to use the residual space of vans, or crowdsourcing solutions.

Which solution is going to win? We don’t know yet. But one thing is certain: every economically and environmentally sustainable idea should be promoted. E-commerce is still far from reaching its “plateau-level” (i.e. maximum growth) and the great human and infrastructural machine that supports it is already beginning to creak. In the meantime, while we enjoy instant shopping and delivery, our planet is coughing.

Untangle the last mile issue is essential as it would start a virtuous circle of beneficial effects. It would generate a reduction in costs, as well as a higher efficiency (no more waiting for late deliveries, no more non-delivered goods); and what is perhaps more important, traffic would decrease. That’s why the last mile has become the “holy grail” of the new millennium.