An Optimization-Based Approach to Evaluate the Operational and Environmental Impacts of Pick-Up Points on E-Commerce Urban Last-Mile Distribution: A Case Study in São Paulo, Brazil

Abstract

Online sales have steadily increased in recent years. Unlike the traditional retail shopping model, e-commerce must deliver custom orders to highly dispersed locations. Consequently, negative effects have been observed in large urban and densely populated areas, such as congestion and pollution. Pick-up points (PPs) are fast-growing solutions that provide parcel delivery and picking services at diverse locations throughout major city centers. This paper describes an optimization-based approach aimed to investigate the conditions in which a network of pick-up points can be more efficient than home deliveries from operational and environmental points of view in urban last-mile distribution. Differently from the related literature, in which analytical models were employed, we use optimization and algorithms to determine the economic and environmental benefits of packages destined for pick-up points instead of home deliveries. The framework was applied to the city of São Paulo, in Brazil. Several scenarios were evaluated, comprising different densities and percentages of deliveries destined for PPs. The results show that PPs can be a promising alternative for reducing the environmental externalities, as fleet and vehicle mileage can be reduced by more than 50%.

The Impact of E-commerce Last-mile Delivery on Environmental Sustainability

“…Because of the greater popularity of online shopping in recent years, an increasing number of packages must be delivered with a higher frequency and lower consolidation [7]. Nevertheless, transportation companies focus on maximizing their profits and consumer satisfaction; they generally ignore the negative impact on urban areas bought by increasing road deliveries, especially in terms of environmental impact [6].…”

“…The final stage of delivery is considered a significant hurdle for e-commerce industry leaders and their expansion efforts, primarily due to various inherent factors. Ranging from delayed delivery time to return of the express packages, for example, requires logistics companies to deliver two or more times, which induces additional transportation costs, labor force, and carbon dioxide emission [7]. Meanwhile, failed delivery is also a leading contributor to increased environmental pollution.…”

A Review of Literature on Vehicle Routing Problems of Last-Mile Delivery in Urban Areas

“…Parcel lockers, also called pickup points [91], offer a promising solution to some of the challenges posed by LMD for enhanced efficiency, reduced costs, and minimized environmental side effects [92][93][94]. In this case, distributors deliver parcels to appropriate lockers and inform the customers.…”

Profit Allocation Problem and Algorithm of Network Freight Platform under Carbon Trading Background

“…Silvestri et al [ 4 ] in their study for the optimization of networked goods migration in urban stores pointed out that a shared information-based model of networked goods migration can reduce the pollution generated during transportation and thus its associated externalities. Masteguim and Cunha [ 5 ], on the other hand, conducted a study on the impact of pickup points on last-mile delivery and showed that reasonable delivery points can circumvent more waste of resources. In addition, Hailemariam et al [ 6 ] found that income inequality is positively correlated with carbon emissions, thus achieving a fair distribution of benefits is also essential to promote a low-carbon economy.…”