Local pick-up a key to reducing emissions in e-commerce: Accenture

E-commerce skyrocketed during 2020 due to shopping shifting to online because of COVID-19, but emissions from parcel delivery actually dropped through the use of click and collect and curbside pickup, according to Accenture.

The environmental gains from using what's called micro-fulfilment could mean that these emissions reductions could be enhanced post-pandemic, according to a new report, The Sustainable Last Mile: Faster. Greener. Cheaper." undertaken in collaboration with Frontier Economics.

If retailers focus on green delivery options - using stores as locations for customers to click and collect, shipping from stores to homes, and curbside pickup - and if delivery companies used data to optimise delivery routes, companies could lower what's called last-mile emissions between 17 and 26% by 2025.

On the flip side, with no interventions, the report forecast there will be a 32% jump in carbon emissions from urban delivery traffic by 2030.

There's also a cost-case to be made for retailers to adjust their approach to logistics - Accenture's report found last-mile delivery accounts for 53% of the total cost of shipping—and 41% of total supply chain costs.

"The carbon footprint of the last mile has long been an environmental and societal challenge," said Koorosh Rouhani, a managing director within Accenture Australia's business.  "But during COVID, something unexpected happened. Stores that had closed, morphed into micro-fulfillment centres, ship from store and curbside pickup emerged, parcel drop density rose, and last-mile delivery got greener.

"We now have an opportunity to harness those changes and make last-mile delivery more efficient, less expensive and more sustainable for the long-term."

The study used data from London, Chicago, and Sydney. The model estimates the impact on outputs such as emissions and traffic congestion, based on inputs including local fulfilment centre prevalence, population density, average distance travelled per parcel, delivery vehicle mix and consumer demand projections.

"Analysis shows that if just half of the e-commerce orders in Sydney used local micro-fulfilment centres (MFC) it would result in a 2% reduction in delivery traffic, or about 27 million kilometres of reduced vehicle traffic across the Greater Sydney region, and save 52K tons of carbon emissions," Rouhani said.

Micro-fulfilment centres are a flexible logistics solution for e-commerce and also include automated locker storage facilities, and stand-alone micro-warehouse facilities.

"Combined with increased buyer awareness about the environmental impact of delivery options and more options for greener delivery, government incentives for delivery companies to invest in green fleets, and increased use of data to optimise delivery routes, the potential to create a sustainable last-mile has never been greater," Rouhani said. "Organisations with innovative local fulfilment strategies and that lead in digital adoption and sustainable business practices will become tomorrow's industry leaders."

In late 2020 Accenture and Frontier Economics developed an economic model of the impact of local fulfilment centres for e-commerce using data from Accenture modelled the impact of fulfilling 50% of e-commerce orders via micro-fulfilment centres, across the three cities. To estimate distance, the model assumes that central dispatch warehouses are located near airports and micro-fulfilment centres are evenly spread throughout the city. The model excludes the impact of fleet electrification. The distance from the micro-fulfilment centres to household varies by city due to population density, Accenture said.

Read more: Frontier EconomicsAccenture AustraliaKoorosh Rouhani