Reshaping urban logistics with electric vehicles and last-mile solutions

By Amandeep Singh Bhan

The urban population in India, which stood at 34.9% of the total in 2020, is expected to double by 2050 according to United Nations projections. As the urban population swells and the challenges of logistics loom large, innovative solutions are emerging to reshape the way we navigate our cities. At the forefront of this transformation are electric vehicles (EVs) and last-mile solutions, heralding a new era of efficiency, sustainability, and seamless delivery experiences.

Why logistics need to keep up

The Indian e-commerce industry is forecasted to quadruple by 2027 with online retailers already serving 15,000-20,000 pin codes out of nearly 100,000 pin codes in the country. Due to such growth, the traditional logistics systems are reaching their limits. Urban areas experience high traffic congestion, have limited space for warehouses and delivery vehicles, and inadequate infrastructure for smooth operations. This leads to last-mile delivery issues, such as failed delivery attempts and longer delivery times, contributing to customer dissatisfaction. The inefficiencies of the system have also given rise to questions about the environmental impact of traditional logistics, including air pollution and carbon emissions. These challenges necessitate the adoption of innovative solutions to reshape urban logistics and create sustainable systems.

The EV Revolution

As customer experience in a city is increasingly defined by convenience, delivery speed, and efficiency, the utilisation of EVs for last-mile operations is on the up. Indian automobile giant TVS Motors recently entered into a strategic partnership with Zomato to enable green deliveries. TVS Motors will deploy over 10,000 electric scooters over a course of two years, revolutionising last-mile delivery with Zomato while enabling the latter to reduce its carbon footprint. Zomato’s competitor BigBasket has similar plans, aiming to increase its EV fleet by 5X over the next two years. Meanwhile, e-commerce giant Flipkart has committed to 100% adoption of electric vehicles by 2030. The increased private sector adoption of EVs is mirrored by the public sector as well with several Indian cities deploying electric buses and introducing EV-friendly policies, such as subsidised charging infrastructure.

These initiatives leverage the significant environmental advantages of EVs, including reduced emissions and improved air quality, while demonstrating the transformative potential of EVs in reducing the carbon footprint of urban logistics. According to the Carbon Disclosure Project (CDP), the global adoption of electric vehicles by 2030 could result in a staggering reduction of 1.5 billion tonne of CO2 emissions annually, which is equivalent to the total annual emissions of Russia. This showcases the immense impact that electric vehicles can have in curbing carbon emissions and creating a cleaner, more sustainable future for urban logistics.

Innovation in last-mile solutions

A highly competitive environment combined with customers’ high-cost sensitivity has pushed forward the development of various last-mile solutions. Micro-fulfillment centers located strategically within cities enable quicker order fulfillment and reduce the distance traveled for deliveries. Smart lockers provide secure and convenient pickup locations for customers, reducing the need for multiple delivery attempts. Drones and autonomous robots also offer exciting possibilities for efficient and cost-effective last-mile deliveries.

Many Indian cities, especially those with congested urban spaces such as Bengaluru, have seen the return of bike courier services. Startups such as Borzo are providing low-cost green delivery solutions in major Indian cities with plans to expand to tier-2 and tier-3 cities as well.

The next step in the last-mile delivery revolution is using drones and autonomous robots. Drones are proving very popular as they can help reduce storage expenditures. Globally, e-commerce giants such as Amazon and Walmart are already using drones to increase their footprint in remote areas.

The Indian government is also moving towards adoption of such technologies as evidenced by the Budget 2022. Finance Minister Nirmala Sitharaman introduced the ‘Drone Shakti’ project and aligned the government with the goals of drone manufacturers who aim to deploy drones for last-mile cargo delivery. FAME-II further underscores India’s commitment to sustainable urban logistics. Under the policy, the government provides subsidies for the purchase of electric vehicles and grants for manufacturers.

A Sustainable Future

The future of urban logistics is full of exciting prospects. Emerging technologies such as data analytics, AI, and autonomous vehicles are making headway. Data analytics can optimise route planning, vehicle utilisation, and delivery schedules, leading to greater efficiency. AI-powered systems can improve predictive capabilities and automate processes, enhancing overall operational effectiveness. Autonomous vehicles, including self-driving trucks and delivery robots, could further revolutionise last-mile logistics by reducing costs and enabling 24/7 operations. These trends offer tremendous opportunities for businesses and cities to create more sustainable and efficient urban logistics networks.

The author is Senior Vice President at Moglix.

Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.

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