Amadou Diallo, CEO of DHL Global Forwarding, Middle East and Africa on Transforming last-mile logistics in the UAE
Last-mile delivery is a crucial cog in the wheel of logistics. It is the last part of the supply chain, where goods’ final movement occurs from a business to its consumer. Because it is a customer’s first point of contact with a product, it can determine a retailer’s success.
The last mile is increasingly becoming a critical component of the e-commerce supply chain, with many companies developing targeted strategies to compete effectively. The last mile requires considerable attention because it will remain one of the main touchpoints in the customer experience.
This is particularly relevant in the UAE, where e-commerce is booming, with estimates that it could grow by 60 per cent to more than $8 billion by 2025. Companies that make their urban delivery networks more flexible by investing in data for better customer experiences, managing their inventory efficiently and deploying new technologies to boost productivity will have a competitive advantage in the dynamic e-commerce marketplace of tomorrow.
To support the rapid expansion of e-commerce, it is also critical for logistics companies to decarbonise last-mile transport not only in the B2C segment when it comes to parcels but also in B2B when it comes to providing end-to-end solutions for business customers.
Digitalisation in route optimisation for the last mile is helping to improve utilisation, efficiency and sustainability. This is especially beneficial during seasonal retail surges, like Eid, shopping festivals and other promotional days, which puts significant pressure on logistics companies to build additional capacity.
As urban customers’ demands for speed and convenience grow, retailers must overhaul their warehousing networks and replace centralised networks with local fulfilment and distribution infrastructure. Transport capacity gaps must be addressed so trucks are utilised optimally. For example, when it comes to heavyweight (full truckload), the truck may return empty after it delivers its load.
Digital solutions can improve last-mile optimisation and sustainability. For instance, DHL’s GoGreen solutions plan to convert at least 60% of its last-mile delivery fleets to electric vehicles to help clients reduce their environmental footprint. By partnering with such providers, retailers can enhance their image as sustainable organisations without making costly investments in their own eco-friendly vehicles.
Battery-electric vehicles for pickup and delivery are the ideal last-mile solution. These vehicles are designed for short-range trips, making them well-suited to reduce emissions, especially in urban areas. DHL Global Forwarding launched the UAE’s first electric truck – the Mercedes-Benz eActros 300 – to reduce carbon emissions as part of the Saloodo! Digital road freight solution platform.
This fully electric truck is equipped with Daimler’s cutting-edge eAxle technology and two integrated electric motors, delivering power and efficiency. A remarkable gross combination weight of up to 40 tons proves that heavy-duty distribution transport can be environmentally friendly without compromising performance.
Intermodal transport and combining different transport modes are also vital to designing effective last-mile delivery solutions. Through intermodal and multimodal transportation, handling costs and the risk of damage and loss are minimised, and goods get to their destination in a shorter time. It also helps to reduce lead times, lower inventory costs, and keep freight costs under control. Optimised route planning reduces emissions and transportation carbon footprint.
Increasing intermodal solutions is an integral part of DHL’s sustainability roadmap. The company has signed a 20-year partnership with Etihad Rail to strengthen end-to-end logistics and supply chain services for regional customers. The partnership aims to offer secure and reliable transportation and is also an environmentally friendly alternative to cargo transportation via road or air freight. Each train trip will shift around 300 truckloads from road to rail and significantly reduce pressures on road transport. It will also boost trade, commerce, and logistics in the UAE and help the UAE meet its environmental responsibility commitments.
Enhancing business productivity and meeting customer expectations can become a herculean task without a robust last-mile delivery solution. However, an effective last-mile delivery network can alert customers of potential delays and offer retailers end-to-end visibility of shipments. Brands can then design a holistic brand experience for their customers, leading to better expectation management and trust while meeting their own sustainability targets.