This post is by Angela Hultberg, head of sustainable mobility at IKEA Retail (Ingka Group)
E-commerce is soaring. It already was pre-pandemic, and during 2020 it has risen to entirely new levels. Online shopping has the potential to be the more sustainable choice, avoiding emissions from going to the store, or even several stores. But is that potential realised today?
With e-commerce comes deliveries, and with deliveries comes CO2 emissions, air pollution, noise pollution and congestion. Many cities are facing serious disruptions due to the number of delivery vehicles parked, or double parked, throughout city centres. The air is no longer safe to breathe, with WHO stating that air pollution causes seven million deaths each year, and a UK court recently ruling that air pollution “made a material contribution” to the death of nine-year-old Ella Adoo-Kissi-Debrah.
More of the same will leave cities uninhabitable
It is clear something needs to change; we cannot keep doing more and more of the same or cities will become uninhabitable. Many businesses are up for the task, with advances being made in electrification, cargo bike deliveries, mobility solutions and efficiency, and more. But is industry changing fast enough?
The short answer is no. The longer answer is also no, but we could be changing a lot faster. Most of the issues connected to zero emission transformation in last mile can be mitigated, but requires investment, collaboration and new ways of working. The challenges are well known; the initial investment required to transform the delivery fleet, the lack of suitable vehicles and the lack of charging infrastructure. Even though most businesses might realise that electrification is where we are heading, the incentives for being a first mover are scarce, and there is a sense that everyone is waiting. Waiting for the right kind of vehicles to be designed and mass produced, for prices to go down, for infrastructure to be built. But how will we get there if everybody is waiting for someone else to go first?
Cities are also recognising that the health and wellbeing of their citizens is at risk, not to mention that it is virtually impossible to get anywhere during peak hours. One way to battle this is with low, ultra low or even zero emission zones. For any company trying to deliver goods to customers, this is a game changer.
There’s a tangible business case for change
Looking at these types of zones, sometimes combined with tolls for fossil fuelled vehicles, restrictions in parking etc throughout the city, the business case becomes more tangible. Zero emission transformation goes from being a sustainability project, to mitigating a risk of serious business interruptions. If businesses cannot reach customers front doors, they don’t have deliveries. If they don’t have deliveries, they don’t have a compelling service offer, and then they don’t get online sales, threatening their existence. We can easily look at the postcodes within the zone, see how many deliveries we made, the value of those and the loss of sales we can expect if we can no longer deliver. Compared to the loss of sales, the negative customer experience and the loss of growth, the investment to be more sustainable doesn’t seem so bad anymore.
But policy needs to be made consciously. The lack of harmonisation is challenging, as fleet owners might be required to keep track of a myriad of different regulations in different cities. Studies in the UK show that a scattered policy landscape is more likely to lead to fleet managers shuffling about their vehicles, than completely transforming their fleets. Cities must also enable the transformation by supporting the infrastructure needed for sustainable solutions, be it consolidation hubs, biking lanes or charging for electric vehicles or alternative fuel stations. By working together with businesses and understanding how both parties can contribute to acceleration, we can reach fast and lasting results.
Policy change is needed to help businesses change
Despite the challenges, some businesses are rising to the challenge. We at IKEA Retail (Ingka group) for one are committed to offering 100 per cent zero emission home deliveries by 2025. A large part of this relies on the move to electric vehicles. To date, we have deployed electric vehicles in over 20 of the 32 countries we operate in. Some markets are moving faster than others, with China already offering 90 per cent electric deliveries. We are also exploring cargo bikes deliveries, electric barge, parcel lockers, as well as new ways of optimising and working with social entrepreneurs to advance the social agenda, as well as the environmental one, by creating local jobs. In our experience, we can move faster when efforts are supported by policy makers. Together, we can create a vision of what the future of cities should look like and work to make that a reality.
As companies struggle to keep up with delivery demand, it is clear we have an opportunity to reshape the ‘last mile’ industry. The world is changing, and so must the way we do deliveries. If businesses keep on doing more of the same, with policy makers standing idly by, we will see more air pollution, more congestion, more noise pollution, all while CO2 emissions continue to rise. The question we have to ask ourselves is can we afford that?