We've all heard that the last mile is the most expensive part of the shipping process. That's due to the labor, time, and fuel required to move smaller quantities of items to multiple destinations compared with moving them in bulk.
But the most challenging, and typically most inefficient, part of the process is the actual delivery itself—the final 50 feet, where the driver must park the vehicle and attempt to deposit the package with its recipient. And nowhere is that more challenging than in crowded urban environments, where drivers must contend with limited street parking, traffic congestion, and high-occupancy buildings.
Is there a more efficient way to make these deliveries? That is the question that Barbara Ivanov ponders each day. An expert on urban goods delivery and public freight systems, Ivanov is the director of the University of Washington's Urban Freight Lab, a group that's investigating high-impact, low-cost solutions for businesses delivering goods in urban settings and cities trying to manage limited street parking in areas where delivery trucks, bicycles, pedestrians, and cars must all coexist. She talked recently with DC Velocity Editorial Director David Maloney about the lab's current research initiatives.
Q: Could you tell me about the work of the Urban Freight Lab?
A: We have been in existence since December 2016. The group has gathered around what we have taglined the "final 50 feet," which is the series of activities or the process flow that starts when a delivery vehicle stops. That could be at the curb, in an alley, or in an underground loading bay. It then tracks the delivery person as they make their way to the building, enter and pass through security, and go from floor to floor to make the final delivery. We've focused on that final 50 feet because our members tell us that is where about 60 percent of the delivery time is actually spent.
So, the idea behind forming this group is that each of its members owns a piece of that or strongly influences it. The city owns the curb and in Seattle's case, as in several other major cities, the network of alleys. The building property managers own the buildings. The delivery companies own the equipment and the service itself. All of this is the basis for moving retail goods. The people in the group all own a piece of the process, but none of them can solve this kind of problem by themselves.
Q: Who are the group's members?
A: The Urban Freight Lab is a structured work group made up of senior executives from a dozen companies. Those member companies include two major retailers, Kroger and Nordstrom, as well as the multinational food and beverage giant PepsiCo. We also have several key parcel delivery players: UPS, the U.S. Postal Service, and USPack, which not only does parcel but also med-pharma as well as "big and heavy." Plus we have Terreno Realty Corp., which buys, holds, and manages DCs in urban downtown centers; Boeing HorizonX, which has investments in future technology like drones; and Expeditors International, a large freight forwarder. We have three OEMs—Ford, GM, and Michelin—so you can see it is a really amazing group.
Senior executives come to Seattle four or five times a year when we are making decisions about the research. What sets this group apart is that with our partners—the city of Seattle and now, the city of Bellevue (Wash.)—we actually run empirical pilot tests on the street, in office towers, and in residential towers for the most promising strategies we have developed.
Q: What are some of the issues you're tackling?
A: There are two priority problems that the members and our partners, the local cities, have prioritized. The first is to reduce dwell time—the amount of time that delivery vehicles spend at the curb. Why does that matter? Well, obviously for the delivery company—UPS, for example—it's great if you can get in and out of the space more quickly because you can get your work done faster. But there's also a huge benefit from the cities' point of view. They're seeing demand for curb space skyrocket at a time when they're actually reducing curb lanes because there are other things cities value, like transit lanes and bike lanes. What remains must be much more productive. So, the number-one priority is reducing truck dwell time.
The number-two priority is to reduce the absolute number of failed first-delivery attempts. That is the sweet spot for delivery companies. They are losing money by having to come back a second or even third time to try to make a delivery. It is such a waste.
Q: Are you looking at ways to ensure there are places for vehicles to pull over to make their deliveries as opposed to double-parking and adding to congestion?
A: Absolutely. That is exactly what we are doing right now. We started out by mapping every loading space for commercial vehicles, including private loading bays, in downtown Seattle. That has not been done in other cities. That is building block number one. Then, we studied occupancy: How are people actually using these spaces currently?
Next, we started testing promising strategies. In our group's view, the most promising concept, the one with the biggest payoff, was the use of common lockers—lockers that can be used by any retailer. We position them as close as possible to a load zone so that UPS drivers can pull up, load the lockers, and go about their business.
What does that do? First, it sure as heck reduces the dwell time. We ran a pilot test in a 62-floor office tower in downtown Seattle, and it cut delivery time by 78 percent. So, instead of it taking the driver 20-some minutes to do their work, it became six minutes. Huge benefits.
Because of this work, we were able to obtain a $1.5 million grant from the U.S. Department of Energy (DOE). That is enabling us, with Seattle and Bellevue as our partners, to run a much larger pilot test.
As for what that pilot will entail, one thing we're going to do is place occupancy sensors in every one of the loading spaces in an eight-block area in downtown Seattle and right in the downtown core of Bellevue. Our partner on the project, Pacific Northwest National Laboratory, will collect and analyze data from those sensors and then use machine learning to notify drivers in real time via their smartphones which spaces are open. And in fairly short order, using the app, they will be able to see with high probability which spaces are about to open up. That is strategy number one of the DOE grant—to assist drivers in making the most efficient parking choice they can.
As another part of the project, we'll be placing more of those common lockers on curbs in the public right of way. We are going to do that right next to transit stops, bus stops, or train stations.
Q: Could you tell us more about your locker pilot program?
A: Yes. As I mentioned, we ran a proof of concept in a Seattle municipal tower about a year and a half ago. We are now expanding that in an eight-block area, and we will have potentially three or four of the locker stations.
We also want to expand and test temperature-controlled lockers. There is so much demand for food deliveries, whether it's groceries or prepared food. The big question in food is whether the customer will prefer to have it come right to them or be willing to go to a locker, where you'd have more delivery density. I'm sure that is going to vary based on population, on market, and on density. For example, there is a fairly good-sized senior center in our pilot test area, so I would guess that having temperature control for medications might be good, but we don't know that. That's why a lot of our work is running these real-world pilots. We get actual evidence about the conditions under which programs are likely to succeed or fail. And because we are academics, we are cool with failure.
Q: How will the lockers work?
A: The locker technology is pretty good, so we won't be testing the technology itself. It is really more about market use and acceptance. What happens is, you need to sign up. And then when you order something, you enter the locker address as the delivery address. As soon as your order is placed in that locker, you'll get a text or an email notifying you that it's ready for pickup.
Q: How far along are you in your study?
A: We are in year one of a three-year project. The pilot itself will run throughout 2020 and 2021, but we gave ourselves one full year to get permissions, and that is very realistic. We needed permission from the cities of Seattle and Bellevue for the exact pilot-test locations. We need to get permits to install the lockers from a separate group within Seattle's Department of Transportation that oversees sidewalks. We need to market the lockers.
On top of that, Seattle has a very strong surveillance ordinance. We've had to spend quite a bit of time understanding how we could "sensor" these places and obtain the data we need without running afoul of that surveillance ordinance, so it is a constraint. Then, of course, all the sensors need to be installed. We have to begin receiving the data, test it, and make sure the app actually functions well for drivers and dispatchers. The whole thing is going to light up in January 2020.
Q: What do you hope to achieve?
A: We have set actual quantitative goals. For instance, one of our objectives is to reduce the number of failed first deliveries by 30 percent. We're also looking to reduce what we used to call "parking seeking" behavior, but we've learned in the research we've done to date that it is really "parking choice" behavior. We are going to reduce the waste and make that parking-choice behavior more efficient.
Q: What other things are you planning to study?
A: Along with the growth of e-commerce, another trend we see building over the next five years is greater use of autonomous delivery vehicles. So, we are looking to sort out what the metrics for success might be for running a smart city with autonomous delivery vehicles. You can't manage these things until you have some pretty clear-cut, measurable goals. So, how would you set up this system? We are looking at questions like that.
The second thing that we're very interested in—and the lockers are really one example—is creating this "artificial density" for delivery, because dropping off one parcel every three seconds at individual addresses is the least-profitable, most-expensive part of the carriers' work. So, in addition to the lockers, we're interested in looking at shared micro hubs, which are flexible consolidation points for deliveries, as a way to allow companies to make good on the two-hour delivery promise that apparently is going to be the new standard for retail.
