Solving the final 50 feet: interview with Barbara Ivanov
For businesses that make city deliveries, the challenge isn't so much the last mile as the last 50 feet, starting with the battle for parking space. Barbara Ivanov and her team at the Urban Freight Lab are looking for ways to ease the pain.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
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.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”