MHI Solutions


Smart City Logistics and Home Delivery

Driverless vehicles or drones? Choices for home delivery methods are expanding, but there are challenges and new aspects to take into consideration.

By Michael G. Kay

Given the rapid recent development of driverless vehicle technologies, it is interesting to speculate as to what their impact will be with respect to the last mile delivery of goods to homes in urban environments. Ultimately, the combination of driverless delivery vehicle and airborne drone delivery should make it possible eliminate the need for all non-recreational shopping by allowing general merchandise, hot meals and groceries to be delivered to the home at a low cost. This will be especially important for the disabled and the elderly, as it would allow them to live in a typical sprawling U.S. suburban neighborhood and still have their shopping needs met without the requirement to drive.

While drones make it possible to quickly deliver products to a home, there are difficulties associated with providing enough clearance to make a delivery. Furthermore, many low-value bulky products are not cost-effective for drone delivery. As a result, ground delivery via driverless vehicles is likely to be the primary means for most urban last mile deliveries.

The big advantage of a driverless vehicle is that without a human driver it becomes economic to have direct delivery to a home from a distribution center (DC) only at a time when a person is at home and is able to unload their order from the vehicle. When a human driver is involved in a home delivery, the high labor cost necessitates routing multiple home deliveries that cannot be scheduled on demand, resulting in either leaving the order outside unattended or giving the driver access to the home.

The key to having fast and efficient direct home delivery is to have the DC located close to the home in order to effectively provide urban fulfillment.

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This issue of MHI Solutions tackles the important topic of digital technologies in the supply chain industry, especially as it relates the transportation and logistics. Transportation plays a central role in supply chains, whether they are local or global enterprises. And just like the overall supply chain, transportation is facing a digital revolution including new solutions for tracking road, rail, sea and air freight and parcel transportation. These digital technologies are disrupting the industry, but they are also providing im-portant new solutions for transportation inefficiencies and urban logistics challenges. They are also creating new digital business models that enhance transparency and sustainability and contribute to end-to-end supply chain visibility. Like the innovations impacting supply chains, these trends are being driven by the growth of e-commerce and the consumers’ never-ending need for better, faster and cheaper. Ignoring them is done at your own peril.

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