Unlocking the benefits of pick-up points for sustainable E-commerce distribution in urban areas

Date: 23 August 2019

Venue: UAntwerp Stadscampus, Graduation Hall, Grauwzusters Cloister - Lange Sint-Annastraat 7 - 2000 Antwerp (route: UAntwerpen, Stadscampus)

Time: 2:00 PM

PhD candidate: Ivan Cardenas

Principal investigator: Prof. Dr. Thierry Vanelslander, Prof. Dr. Wouter Dewulf

Short description: PhD defense Ivan Cardenas - Faculty of Business and Economics

Unlocking the benefits of pick-up points for sustainable E-commerce distribution in urban areas

E-commerce has been increasing dramatically during the last decade. This disruption in shopping behaviour has brought about changes to the way freight moves in cities. For example, in the US, in 2009, one out of three freight trips had a household as a final destination. Within only 10 years, by 2019, the number of household deliveries had tripled and now three out of five freight trips are destined to households. For the future, this trend is expected to continue.

Despite the obvious convenience of home deliveries, the last mile of e-commerce is the most expensive leg of the supply chain. Additionally, home deliveries cause a number of negative impacts to residential areas such as street blocking because of double parking, an increased risk of accidents, as well as other negative externalities linked to freight vehicles (e.g. pollution, congestion, noise).

Pick-up points are therefore widely regarded as a solution for increasing the efficiency and reducing the traffic of freight vehicles in residential areas. If doorstep deliveries get consolidated in pick-up points, household freights trips become less frequent. Municipalities and companies are recognising this potential and start focusing their attention on densifying pick-up point networks. From their perspective, those pick-up point networks constitute an instrument to mitigate the negative impacts of e-commerce in urban areas. Estimations suggest that in Europe so far there are about 200,000 pick-up points, while in Belgium this number is getting close to 7,000.

Simply densifying the pick-up points may however lead to unintended consequences: the positive side is that a high density of pick-up points provides more convenience to the customer while at the same time discouraging the use of individual motorized trips to collect packages. However, if there are too many pick-up points, the consolidation effect gets lost commercial vehicles will still need to drive in residential areas causing high operational and external costs.

In this dissertation, the conditions under which pick-up points can be beneficial for society were disentangled. A cost model was developed to understand the effects on operational and external costs resulting from location and density patterns of pick-up points. Our results show that the total costs (external and operational) are almost insensitive to the density of the pick-up point network. However, it appears that the same costs decrease proportionately to an increase in the flow of parcels through the pick-up point network. This suggests that a wider acceptance for off-home deliveries will further unlock the benefits of pick-up points. To reach a larger audience, not only geographical proximity between home and pick-up points should be considered, but also other service level attributes.

Link: https://www.uantwerpen.be/en/research-groups/transport-and-regional-economics/