Physical Internet: a sustainable last-mile delivery model

City logistics is slowly growing, and vehicle emissions have increased as well. For example, in 2019, 40% of the transport sector’s CO2 emissions were caused by freight transport. Another negative aspect has been the increasing costs for logistics companies due to the high number of deliveries in e-commerce.

Looking specifically at parcel deliveries, the high velocity requested for each delivery has increased to over 50% of the total logistics cost of the parcels, as explained by Rod Franklin in his article “Improving Last-Mile Parcel Delivery Processes—A Physical Internet Approach to Low Emission deliveries.”

To mitigate this trend, the European Union has financed several research projects to enable cities to experiment with solutions to reduce the negative impacts of last-mile deliveries and vehicle emissions. Various pilots that test emission-free commercial zones, urban consolidation centers, electric vehicles, bicycles for deliveries, and further solutions have been experimented with in this context. Despite most of these experiments’ positive results, their impact in a large environment still needs to be proved.

To benefit from these initiatives, cities need to develop a system approach that optimizes parcel delivery throughout the city. The objectives are to minimize traffic congestion and emissions by reducing vehicle empty movement, which, in turn, can reduce the cost of economies of scale. In other words, both consumers and logistics service providers could benefit from this scenario.

Despite implementing models that improve self-regulating systems, one that has emerged is the so-called Physical Internet. The Physical Internet is an open global logistic system that aims to improve the efficiency of freight transport by replicating the efficient handling of data packets on the digital internet. The Physical Internet is based on a few agreed-upon standard rules and standardized inter-networking protocols that optimize last-mile deliveries and consolidate system-wide parcel flows.

The main characteristics are:

  • few constraints applied to the service providers in the delivery network;
  • strict interaction among the different service providers;
  • sharing of resources and information among service providers.

A recent EU project (funded under the Horizon Europe program), URBANE, aims to reduce the greenhouse gas emissions from last-mile deliveries by 20% by demonstrating the efficiency of the Physical Internet model and encouraging the development of this approach in further cities worldwide.

The URBANE project, with 39 partners, foresees three phases. In the first phase, innovative last-mile services based on the Physical Internet will be developed and demonstrated in four cities designated Living Labs (Bologna, Helsinki, Thessaloniki, and Valladolid). The second phase will involve a comprehensive analysis and enhancement of the findings from the first phase in Barcelona and Karlsruhe.

The services developed and improved in the preceding phases will be tested in the third phase to verify their broad applicability. This assessment will be conducted through feasibility studies in six cities (Prague, Antwerp, Aarhus, La Rochelle, and Mechelen).

In May 2023, the “URBANE framework for optimized green last mile operations” was published. The report identifies the principles and prerequisites of a Physical Internet inspired urban logistics operational model and establishes the strategic priorities and direction of the URBANE project. Moreover, an analysis of how cities can face the different challenges in implementing physical Internet, such as commercial and regulatory constraints, has been carried out. The report guides improving last-mile delivery operations’ environmental, social, and commercial aspects by identifying innovative approaches.

For more information, click here and find the official website of URBANE.

Source: Mobility Innovation Market Place

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Walther Ploos van Amstel  

Passie in logistiek & supply chain management