Urban Transformation

Sustainable deliveries: How cities and companies can lead on logistics

Demand for deliveries is contributing to traffic jams and parking shortages.

Demand for deliveries is contributing to traffic jams and parking shortages. Image: Pexels.

Michael Fröbel
Cities, Transport and Infrastructure Industry, Lead (EMEA), Accenture
Prince Arora
Post and Parcel Industry Research Lead, Accenture
This article is part of: Centre for Urban Transformation
  • In cities across the world, deliveries have skyrocketed, with changing consumer expectations, more e-commerce and new delivery norms increasing demand.
  • Despite the benefits of e-commerce, cities face more congestion and more emissions as a result. New research from Accenture highlights some of the key risks of continuing with business-as-usual.
  • The World Economic Forum’s Global New Mobility Coalition is bringing together leading companies and cities to find sustainable delivery solutions and to raise ambition across the ecosystem.

The rapid growth of e-commerce is transforming urban landscapes. Growing customer demand, coupled with expectations of rapid delivery times such as next-day or even same-day, has changed the e-commerce landscape beyond recognition in recent years. With global e-commerce retail projected to exceed $8 trillion by 2027, a 39% increase from 2023, cities are facing the effects of increased last-mile deliveries, from urban congestion to carbon emissions and impacts on quality of life. New research from Accenture in collaboration with the World Economic Forum is investigating the impact of the deliveries sector on cities, looking to current trends and challenges, but crucially the solutions which can be deployed to tackle problems with deliveries. In this article we outline its findings.

The surge in delivery traffic: a global trend

The rise in e-commerce has significantly increased delivery vehicles on the road, with potential for a 61% global increase in last-mile delivery vehicles by 2030. Driven by changing consumer behaviors, technological advancements, and the COVID-19 pandemic, this surge has led to heightened urban congestion. Delivery vehicles are major contributors to traffic jams and parking shortages. For example, Dublin's congestion level rose from 45% to 66% and Milan's from 30% to 45% between 2018 and 2023. In rapidly developing cities like Bengaluru, delivery traffic is projected to add 7 minutes to a typical 10 km commute by 2030.

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The impact on climate and health

The rise in delivery vehicles is worsening congestion and contributing to climate change through increased carbon emissions. Current trends indicate delivery vehicle emissions are expected to rise by 60% by 2030, accounting for 54% of the transport sector's emissions and 13% of a typical city's overall emissions. This will negatively impact urban air quality and public health, potentially reducing life expectancy and increasing healthcare costs.

Demand for deliveries is causing infrastructure challenges

Cities are struggling to keep up with e-commerce growth, in part due to limited availability of real estate for solutions like EV charging infrastructure and parcel lockers. The lack of robust guidelines on parking and road usage for delivery vehicles also exacerbates safety issues and congestion, leading to double-parking and obstruction of cycle lanes and footways. In fact, a recent study found that commercial vehicles in downtown Seattle spend 28% of their trip time searching for parking. Urban planning must explicitly address logistics to effectively tackle these challenges.

How the public and private sectors are rising to the challenge

To mitigate the adverse effects of e-commerce growth, cities must prioritize commercial vehicle use in strategic planning. This involves developing sustainable transport infrastructure, enforcing delivery vehicle regulations, and promoting alternative delivery methods. With 23% of online transactions abandoned due to slow delivery speeds, consumers play a crucial role by opting for sustainable delivery options and accepting longer delivery times as retailers must balance the demand for faster deliveries with cost-efficiency and sustainability.

Ingka Group: Supply chain collaboration and innovation

Ingka Group (the largest IKEA retailer in 31 countries) is leading in zero emission home deliveries despite a complex setup where most deliveries are performed by external partners. They are working with their supply chain to reduce carbon emissions from its retail operations. Ingka Group is not only working with vehicle manufacturers to make sure fleets are fit for purpose, but they are setting up different business models. These business models aim to make zero emission fleets available for use by their delivery partners who may not have the capital to modernise their own fleets as quickly. These are just some of the ways that Ingka Group drives action on sustainable deliveries.

Hitachi: Depot electrification strategies

Hitachi ZeroCarbon is revolutionising EV charging for fleets by partnering with operators to develop decarbonization strategies that transition traditional depots to efficient, distributed energy hubs, as was the case with First Group’s bus depot in Glasgow, UK. Hubs like these leverage data and AI to optimise charging schedules and reduce strain on local energy grids, helping to substantially reduce the cost of grid upgrades. Depots that generate and store energy efficiently can also create new revenue streams by making spare capacity available to other operators, including those serving the last-mile.

"There are big challenges ahead and underlying the transformation is a complex ecosystem play.”

Ram Ramachander, CEO of Hitachi ZeroCarbon.

Pittsburgh: Smarter management of the kerbside

Since 2022, the City of Pittsburgh's Department of Mobility and Infrastructure and the Parking Authority have partnered with Automotus, an automated curbside management company, to implement the Smart Loading Zones project. Using digital cameras and computer vision, this initiative has increased loading zone turnover by 40% and reduced average stay times by 23%. It has also cut CO2e emissions from circling and idling by 12 metric tonnes per year and decreased double-parking by 40%, improving traffic flow and safety for cyclists and pedestrians.

Detroit: Accelerating urban transformation through innovation zones

The City of Detroit is deploying the Transport Innovation Zone, a designated area with temporary permitting to enable agile, rapid experimentation of innovative projects. This approach addresses the slow pace of traditional planning processes. The regulatory framework facilitates safe, inclusive experimentation for quick learnings and scalable solutions. Detroit also aims to build positive public perception of the industry and position itself as a model for integrating innovative logistics into urban planning.

"We put an emphasis on consultation in urban logistics. Public engagement helps us kick the tyres on our ideas, while working with the private sector allows us to get a sense of what's next. By building a foundation of compliance and inclusive feedback, new technology pilots scale, adapt and iterate faster."

Vincent Keenan, Head of Innovation for the Office of Mobility Innovation, City of Detroit.

Many other cities are also leading innovations in urban deliveries. Rotterdam's local government is implementing a zero-emissions zone for logistics based on private sector recommendations. In Shenzhen, 26% of logistics vehicles are now electric, with plans to expand EV adoption and provide widespread charging points.

The way forward

The future of urban deliveries is at a crossroads. As e-commerce grows, cities must adapt to manage its impact. Embracing innovative solutions and prioritizing sustainability can make cities great places to live and do business. Collaborations on urban micro-hubs, electrification, curbside management, and the Pick-Up and Drop-Off (PUDO) network offer potential to mitigate delivery impacts but cities play a crucial role in enabling this ecosystem.

The Forum’s Global New Mobility Coalition, in collaboration with Accenture, is helping the public and private sectors to come together to address industry challenges. A new research report, featuring insights on current trends, challenges and solutions for sustainable deliveries, will be published in the coming months, showcasing the opportunity for change in urban deliveries and highlighting how leaders from the public and private sector can take action. Watch this space.

Contributing author: Victoire Risgallah, Capital Projects & Infrastructure Sustainability Lead (UKIA), Accenture.

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