CEP services The last mile in logistics: definitions, transport & future!

Author / Editor: Dipl.-Betriebswirt (FH) Bernd Maienschein / Theresa Knell

The last mile is the last part of the journey to the customer's doorstep. It constitutes the largest part of the costs of parcel delivery and thus poses a major problem for CEP services. Freight bike, robot or drone - who are the players in the industry and what are they planning?

An eye-catcher not only for children: This Starship delivery robot from Hermes is used in Hamburg-Ottensen.
An eye-catcher not only for children: This Starship delivery robot from Hermes is used in Hamburg-Ottensen.
(Source: Hermes)

Whether it's a cargo bike, robot or drone - they are the future on the last mile of parcel delivery. It sounds sustainable and exciting at the same time: Parcels fly to our garden or are brought to the doorstep by robots. By 2020, the already booming CEP sector promises to employ 30,000 more people. Who are the players in this industry and what plans do they have for the future of the last mile?

The German courier, express and parcel (CEP) industry is becoming increasingly important. It safeguards jobs in Germany and is also growing internationally. The companies in this sector generated 17.4 billion in 2015, 4.6 % more than in the previous year. This is the result of the CEP study 2016 conducted by the Bundesverband Paket und Expresslogistik e. V. (German Parcel and Express Logistics Association) (BIEK) in Berlin every year since 2004. The number of shipments also rose by 5.9 % year-on-year to 2.95 billion in 2015, with the growing online trade having an increasing impact on the industry. The number of registered B2C items grew by 10 % in 2015 compared to the previous year.

Staff shortage offers opportunities for many people

According to BIEK, the growing CEP market is also opening up career opportunities in several sectors of the economy. According to the study, CEP service providers employed around 209,400 people in 2015, 6200 more than in the previous year. In addition, there are 116,800 employees in wholesale companies. 326.000 employed people throughout Germany are depending on the CEP sector - this corresponds to the population of the city of Bielefeld.

The chairman of BIEK, Florian Gerster, also expressed his confidence: "By 2020, we expect personnel requirements of 30,000 people. Covering this requirement is a big task and a huge opportunity for many people who want to find an opportunity in Germany. The CEP sector is living up to its social responsibility". The CEP study shows a current and comprehensive picture of the market development, covering trends and the economic role of the CEP sector in Germany. View the current CEP-Study 2016.

There are several CEP service providers in Germany: the most important are DHL, DPD, GLS, Hermes, TNT and UPS. All six companies are concerned with sustainable urban logistics, attach increasing importance to the critical "last mile" of delivery and invest in ecological alternatives to delivery concepts. Some current examples are listed below.

TH Nürnberg, DPD and GLS - with freight bike or sack barrow from microdepot to customer

In April 2016, the Technical University of Nuremberg started a field test with DPD and GLS. The University examines the extent to which microdepots and freight bikes on the last mile represent an ecological alternative to previous delivery concepts. DPD and GLS are responsible for the central Containers, vehicles and real estate. They deliver the shipments from microdepots to the customer with freight bicycles or sack barrows.

Additional Information
CEP sector focuses on innovations for sustainable urban logistics

Even today, courier, express and parcel services (CEP) are highly efficient in terms of logistics and even exceed public city bus services. For the future, alternative drive technologies and innovative delivery concepts offer further potential to improve sustainability. The sustainability study 2017 of the German Association for Parcel and Express Logistics (BIEK), which the association presented at the end of March 2017 together with the author of the study Prof. Dr.-Ing. Ralf Bogdanski in Berlin, shows what these concepts are.

Some of the key findings of the study include: It is still uneconomical for the CEP sector to replace conventionally motorized delivery vehicles with battery electric vehicles (BEV). In addition, the offering for the vehicle classes suitable for CEP is very limited. Until BEV is ready for the market, CNG (compressed natural gas) technology offers a potential for greater sustainability, especially if bio-methane is available. However, the manufacturer's offer of suitable CNG vehicles for the last mile is also very limited. With regard to innovative delivery concepts, the microdepot concept is classified as particularly sustainable. Autonomous delivery vehicles will play an important role in the urban logistics mix, supplemented by autonomous delivery robots. B2C recipients have an additional willingness to pay for Same Day Delivery and time window deliveries. The acceptance of autonomous delivery robots is also given. Nevertheless, the personal delivery service provided by parcel deliverers is highly appreciated by B2C recipients. Autonomously flying parcel drones, on the other hand, will not play a significant role in urban areas, at most for privileged deliveries. As a sensible alternative to conventional address delivery, B2C recipients consider parcel boxes that are open to the public and installed directly at the delivery address.

The Hamburg model - UPS on foot and three-wheeled e-bikes

UPS freight bikes have been used in Hamburg city center since 2012 - parcel delivery on the last mile -, environmentally friendly thanks to three-wheeled e-bikes. This Hamburg city logistics project focuses on the development of a new method of goods delivery in urban areas. UPS has set up four containers at central locations for the interim storage of parcels in Hamburg.

The parcels are picked at these points on foot or by bicycle. The pilot project was extended for a further two years in February 2015 and was rolled out in Paris, Offenbach and Herne. This model will also be launched in Munich as part of the "City2Share" project. Since November 21, 2016, UPS's freight bikes have even been used in Portland in the USA, where the Hamburg model was also introduced.

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DHL - 27 hectare climate-friendly logistics park creates 1200 jobs

A 27-hectare climate-friendly logistics park is also to be built in Hamburg. Deutsche Post DHL wants to create 1200 new jobs at this location by 2020. The plant is to become sustainable through the construction of a planted belt, the creation of green roofs or the use of photovoltaic systems. Commissioning of the site is planned for summer 2020. This project also uses street scooters. They are loaded overnight at the DHL delivery bases in Billbrook and Altona. DHL uses certified green electricity for this purpose.

30 electric vehicles are already delivering parcels in Hamburg's city center. Until 2020, the logistics service provider expects average annual parcel growth of 5 to 7 %. Since the middle of 2018, the logistics group has already started changing its parcel delivery to environmentally friendly street scooters in Bochum, Cologne and Stuttgart. In the medium term, DHL even plans to convert its entire delivery fleet to e-vehicles.

Hermes tests delivery robot in Hamburg

A completely different approach originates again from Hamburg: Hermes relies on delivery robots. The logistics service provider and the European technology start-up Starship Technologies have been testing the use of delivery robots in Germany since summer 2016. The electric delivery robot developed by Starship Technologies has six wheels and moves at walking pace. The small helper is 50 cm high, 70 cm long and has a secure compartment in which shipments weighing a maximum of 15 kg can be transported. The robots can be used within a radius of 5 km. In this way, automated deliveries within 30 minutes are possible. By the way: The communication between robot and customer will take place via a Smartphone App. The delivery is brought right to the doorstep.

The package is delivered by a flying drone

As part of its research and innovation project, DHL Paket successfully tested the third generation of the “Paketkopter” (parcel copter) from January to March 2016 in the Bavarian town of Reit im Winkl. Using a specially developed packing station, the Parcelcopter Skyport, private customers in Reit im Winkl and on the Winklmoosalm could send and receive their parcels during the three-month test phase by automatically inserting the parcels into the Skyport directly via the parcel copter. A total of 130 autonomous loading and unloading operations were carried out during this project. And DPD announced at the beginning of 2017 that it was able to launch its first scheduled service in the Provence in southern France. Previously, parcel delivery by drone was only permitted in test phases. The French Directorate-General for Civil Aviation has now granted permission for permanent delivery with drones.

Joint presentation of the BIEK Sustainability Study 2017 (from left): Prof. Dr.-Ing. Ralf Bogdanski, Florian Gerster and Marten Bosselmann.
Joint presentation of the BIEK Sustainability Study 2017 (from left): Prof. Dr.-Ing. Ralf Bogdanski, Florian Gerster and Marten Bosselmann.
(Source: Christian Kruppa)

The mail-order giant Amazon is also involved and has delivered a parcel with a drone - a bag of popcorn has been placed in an English garden. From processing to delivery 13 min. The US company has set up a drone delivery center in a rural area near Cambridge. The company expects customer feedback and flight data from the test operation to help further improve drone delivery.

* Alexander Völkert is a specialist journalist from 12049 Berlin, Tel. (01 77) 2 02 69 41, av@industrieimkontext.de