Over the past two decades delivering goods into the cities has become a challenge with cities getting overly congested and traffic jams resulting in expensive logistics bottlenecks. In fact, studies show that the cost of congestion now in terms of time wasted in traffic and fuel consumption is off the roof, almost 200% more than what it was in the 1980s. And congestion is only a part of the urban delivery problem. Pollution, lack of parking bays, and warehousing costs are all restraints that are contributing to the economic cost of urban logistics.
There is already a paradigm shift in how products are being manufactured (3D printing) and retailed (transition to online channels) today and the common denominator, supply chain, at all stages of a product's lifecycle must quickly adapt to the changes as well. While it will take another decade or so for 3D printing to become mainstream, the growing market of online retail has already significantly impacted the industry. In order to understand these shifts, it is important to understand the megatrends that directly influence them.
Mega trends and Urban Logistics
We see four main Mega trends that will impact urban logistics - urbanisation, connectivity and convergence, bricks and clicks and multimodality (high speed rail).
Urbanisation and Urban Logistics: Hub and Spoke Distribution
Urbanisation is one of the key mega trends that will be a difficult one to tackle. Cities are growing and expanding their peripheries. By 2025, there will be 35 Mega Cities globally Demanding For Unique City Logistics Solutions. The number of city dwellers is growing by the day and by 2025 we expect 3 out of 5 people will live in cities globally. Currently, an average city dweller from a developed city generates about 0.1 deliveries per day, and if we were to assume the same ratio for 2025 (which we know will increase in the future), we are looking at a minimum of 500 million deliveries per day to cities by 2025.