The challenge of low-emission last-mile distribution: Between sustainability and profitability

The transition to more sustainable last-mile distribution has become a priority for many eCommerce companies. With the rise of online commerce and growing social pressure to reduce environmental impact, companies are looking for alternatives to reduce emissions associated with product deliveries. However, sustainability in the last mile is not only a matter of entrepreneurial will, but also of economic viability. The recent announcement about the closing of operations of Geever, a pioneering company in sustainable last-mile logistics, highlights the complexity of the problem: How to make low-emission distribution also profitable?

The Geever Case: A Lesson on Sustainability and Viability

Geever, a company that advocated the reduction of emissions in urban distribution, has been an example of how innovation in last-mile logistics can face financial challenges. His project aimed to create a network of microhubs that would reduce the distances traveled by delivery vehicles, using less polluting transports, such as bicycles and electric vehicles. However, like many other sustainable distribution projects, Geever failed to reconcile ecological ambition with a profitable operation. This leads us to reflect on the barriers that companies face on this path and how this obstacle could be overcome to achieve a balance between sustainability and costs.

Why aren't consumers betting on the sustainable last mile yet?

One of the great challenges that eCommerce companies face is the consumers' reluctance to pay more for sustainable shipping. Although commitment to the environment has grown among buyers, many still prioritize price and speed over sustainability. In a market where free or low-cost shipping is the norm, asking for a premium for greener options becomes a challenge.

Companies that have implemented shipments with a lower environmental impact, such as the use of electric vehicles or bicycle deliveries, have found that consumers value these options, but they are not willing to assume a significant additional cost. According to several studies, more than 50% of customers prefer fast and economical shipping to a sustainable one, leaving logistics companies at a crossroads: how to make a green operation profitable if the consumer is not willing to pay for it?

The sustainable and profitable last mile challenge: efficiency is key

The key to achieving sustainable and cost-effective last-mile distribution lies in the operational efficiency. Companies must optimize their resources and processes to reduce costs without compromising their environmental impact. Technology plays a crucial role in this regard, allowing logistics companies to:

1. Optimize delivery routes: Platforms such as Routal help to create more efficient routes, reducing kilometers traveled and, therefore, fuel consumption and CO2 emissions. By using artificial intelligence to analyze traffic, demand and city conditions, it is possible to assign the best routes to electric vehicles or delivery bicycles.

2. Consolidate shipments: One of the most effective methods for reducing both costs and emissions is order consolidation. Instead of making individual deliveries for each customer, companies can combine multiple orders on a single trip, maximizing efficiency and reducing the number of vehicles needed on the streets.

3. Use of urban hubs: Just as Geever tried, the Microhubs urban ones make it possible to bring products closer to end customers and make last-mile deliveries in a more agile and sustainable way. These intermediate points allow companies to minimize routes and make the most of low or zero emission delivery vehicles.

How to make sustainability attractive to consumers?

Sustainability in the last mile doesn't just depend on technology and efficiency; it also requires a change in consumer mentality. Companies must find ways to encourage customers to choose greener delivery options, without creating a price barrier. Some strategies that have started to work include:

• Rewards for choosing sustainable options: Offer future discounts, loyalty points or additional benefits to consumers who choose greener shipping.

• Transparency about environmental impact: Showing clearly and directly how consumer decisions impact the environment can motivate many to change their consumption habits.

• Scheduled shipments: Instead of prioritizing 24-hour delivery, allowing customers to choose slower but consolidated shipments can reduce emissions and, at the same time, lower logistics costs.

The Future of the Sustainable Last Mile

The closure of the Geever project makes it clear that the transition to a more sustainable last mile still faces significant challenges. However, the demand for low-emission logistics solutions continues to grow, driven by stricter regulations in many cities and by a progressive change of mentality in society.

The challenge for eCommerce and logistics companies lies in find the balance between sustainability and profitability, something that can only be achieved through greater investment in technology, innovation in business models and an effort to involve the consumer in the solution.

In short, sustainability in the last mile is not just a matter of choice, but of necessity, and making it economically viable inevitably involves making efficiency and technological innovation the pillars of this transformation.

This is a key moment for logistics and eCommerce companies to redefine their strategies and bet on a last mile that is not only low in emissions, but also profitable and efficient. Are you ready to optimize your logistics? Find out how Routal can help you take that step towards sustainability with intelligent and efficient routes.

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