How can ecommerce startups clean up their supply chain?

Ecommerce is booming, and online shopping isn’t slowing down anytime soon; in the UK, the number of goods purchased online grew by 63.2% in 2021.

This is great news for retailers and logistics firms, but it also presents somewhat of a logistical, and environmental, nightmare — more and more goods need to be delivered, which means more polluting vehicles on the road and more harmful emissions in the atmosphere. 

In our recent Sifted Talks, we asked our panel how to solve some of the most pressing supply chain issues and last-mile delivery. Our experts were: 

  • Stuart Bloomfield, chief development officer of Urban-Air Port, which provides infrastructure for drones and manned aircraft
  • Alexander Hjertstedt, freight and logistics planner for the city of Malmö in Sweden
  • Murvah Iqbal, cofounder of HIVED, a zero-emissions parcel delivery firm
  • Trevor Hoyle, SVP ground operations of shipping company Europe FedEx Express

    Sifted talks minutes
    Credit: Ludic Creatives

Here’s what we learned.

1/ Consumers can’t have their cake and eat it too

While the panel agreed consumers increasingly want their delivery to be fair and sustainable, Murvah Iqbal says they’re unwilling to pay for the increased costs that come with things like paying drivers a higher wage. Delivery companies need to find a way to make themselves both cost efficient and sustainable. 

To change consumer attitudes, Stuart Bloomfield says delivery firms need to raise awareness about how much home delivery can add to their carbon footprint — but, he says, actually changing their behaviour takes time.

“We do want to reduce deliveries to certain households. Right now we have first-class delivery for everything. I don’t think it is possible to continue this and neither is it sustainable. I don’t think you need same-day delivery for everything you purchase online. It is important to be very selective about which product you need the same day” — Alexander Hjertstedt, City of Malmö

2/ Drones can help

Drones have the advantage of being emissions free, but development is still in the early stages — they need to be regulated, and people will need time to get used to the idea. And while many big trials taking place across Europe are promising Jetsons-like delivery, Bloomfield says he sees drones as becoming a complement to the current delivery supply chain rather than replace it altogether.

“It has the possibility to take some of that traffic out of the ground-based supply chain. It will be within the supply chain, it will not be the final last mile because the regulation and technology around that would require drones flying all around our cities, dropping parcels in people’s front gardens” — Bloomfield, Urban-Air Port

3/ Rethinking urban space

People in charge of regulation and city planning need to be involved in solving supply chain problems. As more eco-friendly methods like autonomous vehicles and ebikes are used for delivery, Hoyle says they’ll need the right regulation to function in an increasingly complex road space. 

He adds that logistics is now the fifth essential service. People depend on it to get goods and services, making logistics as essential to us as broadband. While new delivery methods will go some way to solving supply chain problems, we also need to think about the way we use urban space. 

“Planning and having smaller logistics facilities in city centres where populations are most dense are key to it as well. If you look over the last 15-20 years, logistics have been pushed further away from cities, which drives more vehicles on the roads” — Trevor Hoyle, Europe FedEx Express

4/ Choose the right methods

Iqbal says parcel delivery is expected to double by 2030 and there’s no magic silver bullet to solve all the problems that supply chains currently face. 

To optimise all the processes involved in delivery, Iqbal says we need to use the right delivery technology for different environments. Firms need to make use of data to decide which method is the correct one for each type of job. 

“What we are doing is integrating a technology framework that analyses lots of data on vehicles and urban environments. That helps us make decisions on which vehicle to deploy in different situations and play a particular vehicle to its strength. If it’s more dense we might use a cargo bike, where it makes more sense. This results in less energy consumption, less mileage and more efficiency for the end user” — Iqbal, HIVED

5/ Share data and work together

Hjertstedt says we can’t have 10 different delivery trucks turning up to the same building on the same day, and governments may pass regulations to stop this happening. To avoid this, he says, shipping companies need to collaborate to get vehicles off the roads, reduce emissions and make deliveries more efficient. 

Data will be key to improving the supply chain, but Hjertstedt says it can be difficult to collect and competitors rarely share it with each other. He adds that some logistics companies have voluntarily shared their data with the city of Malmö so they can see what vehicles are where and at what time. With this mapping, Malmö hopes to get rid of rush hours. 

Iqbal says she is happy to share data from HIVED with other non-competitors, such as local councils. Sharing this data will mean that trucks are not sitting idle or making deliveries at half capacity. 

“There is no doubt in my mind that data is how all businesses are going to become more responsible, operate more efficiently but also be able to collaborate and solve the challenges that we all face in terms of the planet as we go forward” — Hoyle, Europe FedEx Express

You can watch the full Sifted Talks on cleaner supply chains here:

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