Feb 15, 2021

How Smart Zones Impact The Cost of the Last Mile

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Doneliza Joaquin

Program Manager

The demand for deliveries in cities is expected to grow 78% by 2030. Industry experts report that up to 50% of overall delivery costs are attributable to the last mile of these trips.

For delivery fleets, that cost includes:

Fleets aren’t the only ones paying. For cities, the costs include increased congestion, safety risks to pedestrians and cyclists, and vehicle emissions. Businesses may experience delivery delays and blocked access for their customers.

The World Economic Forum’s (WEF) “The Future of the Last-Mile Ecosystem” report notes that without intervention, increased deliveries will lead to increased carbon dioxide emissions and a 21% increase in congestion; the average commute of 53 minutes would go up to 64 minutes.

City management of the last-mile is essential to ensure thriving downtowns for residents, businesses, and fleets and minimizing costs and negative externalities. How can policy changes impact the cost of the last mile?

Delivery vehicles and other traffic on Madison Ave.
Estimating the Impact of Last-Mile Interventions

The WEF report identifies 24 interventions that could help reduce the impact of the last-mile, including the categories such as vehicle changes (e.g., electric vehicles and drones), customer movement (e.g., parcel lockers), and delivery environments (e.g., dynamic re-routing and double-parking enforcement). The report quantifies the potential impact each of the interventions may have on carbon dioxide emissions, delivery costs, and congestion. In order to have the greatest impact, the report proposes that interventions should be done in combination rather than piecemeal.

The table below shows four examples of interventions in the delivery environments category and their potential impact. Sometimes an intervention may have a negative impact on desired outcomes (i.e., reduced carbon dioxide emissions, delivery costs and congestion). These impacts, such as increased double-parking enforcement causing tickets and increased costs for fleets, are shown in red. The ranges are based on whether the fleets and drivers are able to choose to participate or if they are mandated scenarios.


Examples of Potential Impact of Last-Mile Interventions from WEF Report


Smart Zones Last Mile WEF Chart_Updated

Let’s look at a few key examples. Creating dedicated parking zones for vehicles could decrease congestion by more than 29%, as could increased double-parking enforcement (another one of the proposed interventions). Night-time delivery could decrease delivery costs by 28%, if mandated for businesses and fleets. These interventions could help to lower last-mile costs to fleets and decrease negative impacts to cities, their residents, and their businesses.

These interventions sound great in theory, do they look like in practice? Let’s look at a few actual city programs!


Night-time Delivery

Example: NYC Off-Hours Delivery Program (OHD)

The OHD program encourages deliveries to occur between 7pm and 6am, in areas with the most competition for curb space between delivery trucks and pedestrians. While this program is voluntary, a report from 2011 estimates that if every business in the city were to comply with the OHD program, it would have between $147 to $193 million in economic benefits per year (based on savings on travel time and reduction in environmental pollution, and productivity increases for the freight industry). The pilot launched in 2009 with 30 OHD delivery sites and now has over 500 locations in NYC.

Impact:

  • Less time in traffic: 130% higher median delivery speeds during off-hours compared to midday and evening; 50% higher compared to mornings
  • Fewer tickets: No fines issued to vehicles participating in the pilot (down from ~$1,000 per month per truck)
  • Less stress: Drivers noted their satisfaction with the OHD program including less congestion and more available loading spaces
  • Increased business satisfaction: Restaurants receiving deliveries noted improved productivity since there was no delay in food preparation

Critical to success: Getting the businesses that receive deliveries on board with increasing their number/rate off-hours deliveries is a critical component of its success.

 

Delivery Parking Zones

Example: Musician Loading Zones
Several U.S. cities have implemented “Musician Loading Zones” including Seattle , Raleigh, Portland, and Austin. Portland’s pilot program launched in 2019. In this program, permitted vehicles receive a sticker and then are able to actively load or unload for 30 minutes at designated locations near popular music venues during designated time periods. In Austin, venues request permits and can provide them to up to 2 vehicles at a time for 30 minutes in designated time periods.


Impact:

  • More reliable nearby space: Loading drivers are able to safely unload and load music equipment close to the venue
  • Fewer tickets: Drivers are receiving fewer tickets
  • Increased business satisfaction: Venues are able to spend less time coordinating with musicians on logistics while promoting on-time arrival and setup

Critical to success: Consistent enforcement is necessary to ensure vehicles in loading zones are using the spaces correctly.

How do these programs (and last-mile interventions) relate to Smart Zones?

Musician crossing the street

 

Smart Zones Support Multiple Intervention Types

Coord’s Smart Zone are spaces along the curb that our city partners digitally manage and operate, including to dedicate spaces for vehicles loading and unloading goods. Drivers use a mobile app to see real-time Smart Zone locations and availability and pay for space in-app when they arrive. When they’re nearing their destinations, drivers can even hold a Smart Zone. This provides drivers with advanced curb intelligence they can use to navigate directly to available space, reducing illegal parking and circling. It provides cities (including our most recently launched Smart Zone program in Nashville) with valuable data and tools to optimize their curb space to meet varying community needs.

Smart Zones make possible some of the interventions identified in the WEF article including, 1) creating delivery parking zones, 2) reducing double-parking by providing sufficient, legal loading options, 3) allowing cities to identify peak hours for loading and use pricing incentives to support a potential night-time delivery program, and 4) providing drivers information about available loading zones to support dynamic re-routing. Here are some ways Smart Zones could help lower last-mile costs for fleets and negative impacts on cities:

  • Less congestion through better routing: Smart Zones show drivers where available loading space is and enable them to hold it when they’re about 10 minutes away, enabling them to spend less time circling in traffic looking for loading space. This can also provide fuel cost savings for fleets.
  • Adequate Space for Loading: Data from Smart Zone programs helps cities figure out how much loading space they need in different locations, making it easier for them to design regulations, pricing and curb space allocations to manage and meet demand.
  • Fewer Citations: Drivers that can easily find safe, legal, available loading space near their destinations receive fewer tickets. .
  • Decreased traffic hazards: With less double-parking and other forms of illegal parking (e.g., blocked crosswalks and ADA ramps), commercial areas are safer and more pleasant for pedestrians, cyclists, and other vehicles.
  • Increased business satisfaction: Businesses benefit from more on-time deliveries when their vendors can efficiently find nearby loading space.
  • Increased enforcement knowledge for cities: Smart Zones provide cities with real-time data about loading zone utilization and violations, enabling both better advance enforcement planning and on-the-fly deployment to address issues.

Without intervention, the continued demand for deliveries may only exacerbate the costs (financial, time-related and otherwise) of congestion and potentially decrease street safety for cities, restaurants and retailers, and delivery fleets. By leveraging interventions like off-hour deliveries, creative permitting, and Smart Zones, cities can help to mitigate some of these impacts and make a downtown experience better for everyone.

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Doneliza Joaquin

Program Manager

Doneliza is a program manager at Coord. She is helping to deploy Coord’s Smart Zone pilots and programs. Previously she has worked as an urban research team leader at the real estate listing startup Localize.city, as a management consultant focusing on public sector and non-profit organizations, and as an adjunct professor at Barnard College teaching courses in GIS mapping and analysis. Outside of work, Doneliza enjoys running in the city, preferably including a bridge or two, and exploring running routes when traveling.