Roland Berger explores how COVID-19 has acted as a catalyst for the city transportation sector
As with different components of the transportation ecosystem, COVID-19 has acted as a catalyst for the city transportation sector. Technological developments that had been seen and positive to turn out to be actuality have been accelerated by a number of years and are reshaping the trade.
One of many clearest and lasting impacts of the disaster is the rise in world e-commerce. E-commerce was already on a sustainable progress path earlier than the pandemic. For instance, the parcel and logistics section within the world postal providers income grew with a CAGR of seven.5% between 2013 and 2019. COVID accelerated the development of B2C e-commerce even additional. Regardless of a worldwide retail market decline in 2020, retail e-commerce gross sales grew by 27.6% in 2020 and reached €3.8tr (US$4.04tr) or 18% of retail gross sales. This progress was pushed by pandemic-related restrictions, digital retail growth and rising world on-line entry. Whereas the anticipated rebound of conventional retail will result in slower progress of e-commerce, it’s going to proceed to outperform and account for a rising share of the entire market.
As a response to this rising demand, operators are searching for new options to extend distribution effectivity. In addition to new, purpose-built car ideas which might be co-developed with start-ups or current OEMs, operators are rising their networks via PUDO (Decide Up Drop Off) and parcel lockers as proven in Determine 1. Primarily based on a 10-15% common anticipated e-commerce progress, deliveries are more likely to double by 2025. This progress and the pandemic-related want/acceptance of contactless supply fuels curiosity in Out Of House (OOH) and autonomous supply providers. Parcel locker networks are increasing quickly globally to deal with this want whereas decreasing supply factors and growing effectivity for operators.
Rising demand for e-commerce drives adjustments in buyer preferences. As proven in Determine 2, visibility and pace are nonetheless essential standards by way of shaping the way forward for final mile supply. Nevertheless, elevated supply choices and decreasing the environmental impression of e-commerce lead the record of vital short- to mid-term developments.
For a lot of logistics firms, on-the-road operations account for the most important GHG emissions with 10-30% ensuing from warehousing, storage and workplace buildings. Different elements like useful resource utilization (e.g., water), plastics and waste are clearly seen negatives of e-commerce. As clients and regulators alike are clearly targeted on sustainable consumption, logistics operators should discover methods to deal with these issues convincingly. De facto, final mile de-carbonisation of postal and parcel gamers is a should to maintain the “license to function” in lots of cities throughout the globe. Take the EU for example. City logistics within the EU causes 15% of EU visitors, 25% of all CO2 emissions and 50% of all PM and NOx emissions. As a consequence, many cities are actually implementing schemes to restrict entry to metropolis centres for items and freight autos. Restrictions are associated to time, goal or weight and measurement in addition to to emissions with low-emission autos solely allowed into Low-Emission Zones (LEZs). This forces operators to reconfigure their fleets with low emission autos driving the necessity for electrified final mile supply vans.
Effectivity and sustainability are key drivers to leverage new applied sciences within the Courier, Categorical and Parcel (CEP) worth chain (see Determine 3).
Conventional LCV OEMs haven’t proven curiosity within the growth of micro-solutions and have left the sphere largely to start-ups. Micro-solutions won’t eradicate (electrical) supply vans however function a complementary piece of the puzzle of final mile deliveries in cities. They serve the rising buyer demand for emission free deliveries that on the identical time relieve the visitors burden of contemporary cities. Relatively than delivering parcels and clogging up visitors because of the footprint of supply vans, micro-solutions equivalent to e-cargo bikes have been proven to be extra environment friendly than LCVs in densely populated areas.
All main CEP gamers have performed trials with suppliers of micro-solutions, usually partnering with a number of firms to know the relevance of assorted options in quite a lot of use circumstances. Built-in options which might be tailor-made to particular industries and areas cowl a number of steps of the worth chain (e.g., van, hub, cargo unit, e-cargo bike). They’ve been proven, for instance, to extend the variety of parcels delivered per run and, particularly in a US context, cut back the variety of parking tickets issued to CEP suppliers.
The general setting within the CEP house stays dynamic. Present issues about inflation, eroding buying energy, and a tough touchdown of the worldwide financial system could dent progress curves within the quick time period. But there isn’t a doubt that technology-driven effectivity features and a rising shopper demand for sustainable city supply options will proceed to offer constructive fundamentals for the sector.
Concerning the authors:
Wilfried Aulbur is Senior Companion, Chicago, at Roland Berger
Walter Rentzsch is Principal, Chicago, at Roland Berger
Frank Pietras is Companion, Berlin, at Roland Berger
Wenbo Yu is Companion, Shanghai, at Roland Berger