Micro-mobility for logistics: the Sustainable Imperative

The economics of last mile delivery are collapsing

A policy meeting at the Chartered Institute of Logistics and Transport (CILT) heard from freight operators that the impact of congestion, access and parking on last mile delivery has been significant. Larger vehicles cannot complete their loads in the time available and are being replaced by multiple vans for the same journeys in city and urban areas. The vans in turn are not able to do the work that they once could because of routing, parking and traffic restrictions. Costs are nearly double for some operators. This was independently confirmed during the work for a Masters' Thesis at Cranfield School of Management. It showed that the work of a van fleet required twice as many vehicles to cope with the actual road speeds as compared to free-flowing traffic.

The civic pressures to create better living spaces, increase use of public transport and restrict car use are inexorable. The major implications of these changes are both reduced traffic space and parking; for last mile operators this translates into slow jounrneys, long walks with trolleys or barrows and frequent parking fines.

Truck and van delivery costs are becoming unsustainable while at the same time customers are increasing their share of on-line and home delivered purchases: from food to fashion.

Regulations to counter climate change are forcing another dimension of change

The planet is gasping for quality air and the consequences in the form of extreme weather events are increasing year on year. The impacts of air quality on health are also significant and have been well documented by Kings College London. That work, among many studies, laid the groundwork for legislation that has created reduction targets and formed the UK Climate Change committee.
Transport is the biggest single emitter of carbon dioxide (27% of the UK total) and a significant contributor to particulates, albeit the latter has much improved over the last 30 years. As such fixing transport must be part of the solution; the Climate Change Committee is clear that our country is not on track to meet its Net Zero 2050 goal.

Decarbonisation is indeed a profound challenge for people and industry. The legislation has some hard stops in transport with the sale of internal combustion engines in cars, vans and smaller trucks banned from 2035 and large trucks by 2040. The true hard stop for the cessation of the sale of fossil fuel powered cars and vans is 2030 with only some hybrids being allowed till 2035. We have just 5 years to make the change.

The regulations in the ZEV mandate require that manufacturers ramp up to 80% of their EV supply by 2030 and 100% in 2035. At present resistance to very high capital costs is high and manufacturers are scaling back output. In the context of this demand/supply picture and the difficulty of switching to commercial EVs at the last possible minute, the critical moment for adoption is closer than many have appreciated.

Electric vehicles fix the climate question but are not the answer…

It is a paradox that the measures to reduce traffic in cities may cut down on car use but are increasing the use of internal combustion (ICE - carbon powered) vans and trucks because they are having to run further and slower.

Replacing ICEs with EVs in logistics does nothing for the congestion and the productivity. On the congestion, the like-for-like replacement with Electric Vehicles has no effect on routing and scheduling and road speeds. It is just as bad and will likely continue to worsen.
The cost of the vehicles themselves is very much greater; a typical electric van can be as much as £60,000, twice that of the vehicle it is replacing. But the cost impact does not stop there; charging the vehicles requires a significant capital investment and there is a shortage of grid capacity.

The consequence of these additional costs is seen in two ways. First, the transition to EVs is delayed as operators struggle to absorb the cost impacts. Second the operating bases for the EV fleets are forced further out making the routes even less effective and introducing range anxiety.

The scale of the required transition is huge

There are 4 million vans on the UK roads and every day before the pandemic, Transport for London (TfL) estimated that there were:

Registered vans in London - 217,000
Vans crossing the inner London cordon daily - 200,000
Vans crossing Greater London boundary cordon daily - 350,000
Estimate of Vans operating in London daily - 500,000

That is a lot of vans looking for a new solution in London alone, let alone in other big cities.

Micro-mobility and micro-containerization for freight has the potential to address a large part of the challenge

The Amsterdam University of Applied Sciences estimated the potential for e-cargo bike penetration to replace vans at 10% - 15% of current van use (1). A more recent paper in The Transport Review puts the potential at up to 50% (2). At 15% penetration, this would take 75,000 vans off the roads in London and 600,000 across the UK – the upper end of the range would replace 250,000 vans in London and 2 million nationally.

But this will not be achieved by one-for-one replacement in existing networks; electric cargo bikes have reduced payload vs. a van which means their delivery capability is reduced by long stem mileages to delivery zones from existing depots on city peripheries.
Enter the concept of micro-mobility which includes optimising the load carrying capacity and the micro vehicle network. An important part of that can be the introduction of modular loading - or containerization. This thinking is embodied in 2nd generation + vehicle design coupled with revamped networks and operating models. It puts into practice the learning from '000,000 hours of operation in the first-generation cargo bike approach. These can be summarised:

A micro logistics vehicle can do more than the work of a van within a defined area of around a 5-mile radius.
The use of bike lanes and traffic free zones bypasses congestion – giving faster road speeds.
The ease of parking freely at the delivery address saves time and avoids parking fines.
This more than offsets the need to return to base for additional loading; a so-called 'petal' routing.
The vehicles are completely clean – using less than 1% of the energy of a 3.5 tonne van – so virtually zero CO2 and the particulate emissions from tyres and brakes are minimal.
Batteries can be charged from a standard single phase ring main in secure fire-proof conditions – so there is no need for costly high powered charging installations.
Local micro hubs (fulfilment transit centers) enable the 5-mile radius and, as required, can support next day, same day and same hour services across one or more customer bases.
The micro hubs receive and cross dock consignments preloaded to the modular units leading to minimum transfer time and zero double handling.

The terms micro-mobility and micro-containerization convey operating concepts that are more than just electric cargo bikes and light electric vehicles. Quite simply if it's well set up its cheaper to operate.

That’s where RELM can help.

Achieving widespread adoption

It is important for society and business that we grasp this opportunity. It is a key part of the net zero transition, with the potential to reverse the adverse cost impacts that many companies are experiencing.
But, like all big prizes, it comes with some challenges in making the change from the old business model. Here are just a few:

Vehicle fleet management – micro mobility requires a different regime of maintenance and support to ensure robust reliability

Handling unit specification and design – in most cases this will need to be tailored to the traffic being handled to ensure the full benefits of containerization are achieved.

Routing and scheduling – the discovery has been that existing route modelling often does not recognise the opportunities that the vehicles can bring by exploiting road layouts, filtering, short cuts and building access.

Network, micro-hub and containerized handling system design – getting the flow and costs right is crucial.

Charging infrastructure design to ensure safety compliance – crucial for insurance and business continuity.

It is important to appreciate that any company that decides to adopt this new model will need to consider each of these areas and bring forward an integrated approach.
RELM has the operating experience, the logistics design expertise and the engineering and tech smarts needed to address these challenges.

The potential is being spotted by some of the biggest companies in the world as the costs of urban logistics continue to mount, and climate pressures start to cut in. We are excited to be riding the crest of this curve. It is a win-win-win.

Micro-mobility for logistics: the Sustainable Imperative

RELM Logistics