What is Last-Mile Delivery?

And how are these 3 startups making it more sustainable?

Mar 19, 2021

After the products are manufactured in the factory, they are kept in a warehouse.

When a customer places an order, they are shipped from the warehouse to the customer’s place and this final leg of the product’s journey is called the last-mile delivery.

This is applicable to all e-commerce companies.

I would put food deliveries in the last-mile deliveries as well. Here’s my analogy-

The food(product) is prepared in the kitchen(factory), it then comes to the pick-up area in the restaurant(warehouse) and is shipped to the customer’s place.

Due to the boom in e-commerce and takeouts, last-mile deliveries are on the rise, putting pressure on the environment.

The number of delivery vehicles on the road is expected to increase by 36% in the top 100 cities globally between 2019 and 2030, emitting 6 million tonnes of CO2 and congesting the cities.

Here’s how 3 startups are tackling this⬇️

🚚Providing green mobility solutions to one of the fastest-growing economy

A list you don’t want to get featured in…22 of the world’s 30 most polluted cities are in India. New Delhi was ranked as the most polluted capital city. While numerous sources like biomass burning & electricity generation contribute to it, vehicular emissions are the biggest culprit.

e-commerce growth is fueling the problem…An increasing internet user base and favourable market conditions will make the e-commerce sector a $200B industry in India by 2027. To sustain growth in an eco-friendly manner, electric vehicles have to be adopted for business and public transport. Using a fleet of e-cargo vans and electric bikes, India-based DOT provides last-mile delivery fulfilment services.

It provides a wet-leased(both vehicle and operator) EV fleet to leading Indian players like Swiggy, Zomato and BigBasket.
While it works on different revenue models, the most common one is revenue/delivery.
It has over 200 electric three-wheelers and more than 200 electric bikes serving major cities across the country.

It wasn’t a smooth start…Back in 2015 when DOT started, they had to create their own mini-ecosystem- a fleet of electric vehicles, parking and charging infrastructure. 6 years later, the situation hasn’t really improved. With the EV charging infrastructure in India expected to grow at 40% CAGR(2019-25) and players like OLA venturing into the EV market, things might get easier for DOT in this decade.

🚚Making urban cities more livable

Leading the pack…6400km northwest of India, the situation is different. Sweden is one of the least polluted countries in Europe. But if you happen to search for electric mobility startups, a majority of them are in Sweden. As of December 2020, it had ~50% electric vehicle share and stands 3rd worldwide in the adoption of electric vehicles (after Norway and Iceland).

Let’s take the cycling route…With rising urbanization, e-commerce and field services, cities’ streets are getting congested with delivery vans and bigger vehicles. Swedish startup Velove believes that last-mile deliveries can be carried out by smaller and more energy-efficient vehicles. Its four-wheel fully suspended electric cargo cycle Armadillo provides faster and smarter last-mile delivery.

The cargo bikes utilize the bike lanes along with other cyclists, bringing down energy consumption by 95% (as compared to vans).
To ease the transition from vans to Armadillo bikes, they even provide Velovers- certified and trained e-cargobike users.
Velove’s bikes are used by sustainable transportation companies like Budbee and Airmee.

Building a strong feedback loop…Pling Transport is a delivery company that uses Velove’s bikes. Both Pling and Velove have the same founder, Johan Erlandsson. The team at Velove applies their learnings from Pling to improve the bike and provide a better experience to other companies like Budbee and Airmee. Johan himself spends every Friday morning delivering packages to understand the pain points of riders and customers.

🚚Building a clean, affordable delivery solution

What’s happening across the Atlantic?…If you stay in North America, whether you order groceries for a month or just a burrito, it would always arrive in a car. Unless it’s arriving in an electric vehicle, it’s causing air pollution. And even if it’s arriving in an EV, it’s using up way more resources than required and is congesting the streets.

Geoffrey is on its way, look for a cute pink robot…Toronto-based Tiny Mile is helping the environment and making food delivery affordable via its robots. Armed with cameras in the front and the back, these robots pick up the food from the restaurants (within a 2 km radius) and deliver it to customers. It’s a box on 4 wheels driven by people sitting in an office using a controller and a laptop.

When an order is placed (via Uber Eats) at the restaurant, the robot is driven to pick up the food.
The restaurant employee places the food inside the container.
It is then driven to the customer’s place where they show the order number to the camera, the lid opens up and the customer picks up their food.

Geoffrey the robot is the new, cute way to get contactless delivery in Toronto | CBC News — A Tiny Mile robot in action

What else can they do?…Apart from economizing the food delivery(costs $2.99 per delivery vs ~$10 with delivery apps), founder Ignacio Tartavull believes that the robots can be used to deliver lighter items like medicines and books. I believe this service can even be used by people to send packages to friends and families within the city if Geoffrey can take the weight of those packages.

JoyRun, a peer-to-peer last-mile delivery platform that enables users to pick up and deliver items for friends and neighbours was acquired last year by this American MNC.
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In September 2019, Amazon announced it would purchase 100,000 electric vans from this company.
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This social enterprise, established in 2001, is Eliminating the Idea of Waste®.
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Just hit reply and send in your responses. I will publish the answers in the next edition😊

Here are the responses to the last edition’s quiz- STYROFOAM, SEAWEED, CELLOPHANE

😲Eye Openers

Here are my top reads from this week-

Palm oil is repeating its mistake, this time in Brazil.
A low-tech method to remove CO2 from the atmosphere.
Regulation and enforcement have killed air pollution in the past, and it can happen again.

I would love to know your thoughts on them. Please drop them in the comments.

🤷🏽‍♂️ Not My Problem