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Firms See Last Mile Sustainability Cost Savings
December 5, 2022
 A new report, The Last Mile Sustainability Perspective, which explores how
supply chain organizations are currently thinking about last mile operations
amid accelerating economic headwinds. The study pays particular attention to how
organizations are thinking about sustainability and optimization today as well
as other factors impacted by the current economic climate including rising costs
and driver shortages. Findings are based on a survey of over 140 supply chain
professionals from a variety of industries conducted in October and November.
Despite growing inflation, 77% of companies claim to be prioritizing
sustainability or have plans to do so in the coming year, a notable jump from
69% in August. Even more, 8 in 10 supply chain organizations currently have
sustainability efforts underway. And, while many of those believe they are
making progress, less than half (38%) of the companies surveyed are able to
actually measure the results of their efforts.
It appears electric or semi-electric trucks (EVs) aren’t among the
sustainability strategies underway. Findings signal supply chain professionals
are hesitant to add EVs to their fleets. Only 14% are using or have plans to use
EVs in the near term, though nearly half acknowledged they don’t know enough
about EVs to make a decision. Limited charging stations and worries about
running out of miles top the list of their concerns. Strikingly, the report
found 85% of companies would consider adding EVs in order to save on fuel costs.
Far fewer (60%) would consider using EVs to reduce their fleet’s carbon
emissions.
The report also explored business outlook and found rising operating costs were
far more concerning than demand reduction. Three-quarters ranked rising costs as
their top concern while 37% pointed to reduced demand. The group identified a
number of areas where last mile operations can be better optimized for cost
savings including delivery execution (42%), customer communication (41%), and
routing (40%). The report also found the vast majority of supply chain
organizations (73%) still struggle with driver shortages, though not as
significantly as the previous year.
“There’s no question the economy is having a major impact on all aspects of
business and the supply chain certainly is no exception. Everyone is facing
pressure to do more with less. At the same time, the C-suite recognizes that the
last mile delivery experience is crucial to customer retention so they have to
find a way to reduce costs without breaking their promise to customers,” said
Satish Natarajan, DispatchTrack co-founder and CEO. “Fortunately, a superior
delivery experience and cost efficiency aren’t an either/or. Route optimization
not only ensures deliveries are made on time but is also critical to cost
savings by reducing miles driven and trucks on the road, which also happens to
cut carbon emissions.”
Key
findings from the report include:
Prioritizing Sustainability
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There’s a sharp rise in companies prioritizing
sustainability. 77% of companies are already
prioritizing sustainability or plan to in the
next year, a jump from 69% in August 2022. 39%
of companies are already prioritizing
sustainability, up from 22% in August, while 38%
have plans to prioritize sustainability in the
next year, down from 47% in August.
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8 in 10 companies have sustainability efforts
well underway. The top sustainability strategies
for companies include maximizing truckload
capacity (61%), improving routing efficiencies
to limit emissions (54%), technology investments
(17%), and offering delivery options to
customers that limit emissions (16%).
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Promoting sustainability efforts is mixed. 1 in
5 are sharing their initiatives with both
employees and customers; 1 in 3 companies are
promoting sustainability initiatives internally,
but not externally.
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While most companies have implemented new ways
to improve sustainability, the majority don’t
have a way to measure progress. Only 39% of
companies track their sustainability efforts and
have the means to measure results while 61% do
not track their sustainability efforts nor have
the ability to measure them.
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More than half acknowledge sustainability is
important to their customers. 55% state that
sustainability is somewhat (35%) or extremely
(20%) important to their customers. 15% state
that it’s not important to their customers.
Adding
EVs to the Fleet
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14% are already using or have plans to add
electric or semi-electric vehicles to their
fleet within the next one or two years. 6 in 10
companies do not use EVs but would consider it
in the future while 1 in 4 aren’t using EVs or
don’t plan to in the future.
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Supply chain leaders are hesitant about EVs. The
top concerns with using EVs include not knowing
enough (47%), not enough charging stations or
running out of miles (44%), wanting to see how
others are doing before investing (28%), cost
restrictive (27%), and infrastructure
limitations (26%).
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Fuel costs are motivating companies to consider
EVs, more so than environmental impact. The top
motivating factors for companies to use EVs for
deliveries include fuel cost savings (85%),
better for the environment (61%), and customer
importance (30%).
Economic
Impact
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 The overwhelming majority consider supply chain
logistics to be part of their company’s overall
business strategy. 75% state that supply chain
logistics is part of the overall business
strategy while 25% state that it is not.
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Companies worry there will be a dip in
demand—but they are much more concerned about
rising costs. Logistics professionals ranked
rising costs (75%), decreased demand (37%), and
reduced staff (11%) as the top ways the current
economic climate has impacted their business.
18% stated it hasn’t had any impact.
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Delivery execution and customer communication
top list of areas for improvement. Companies
ranked the following as the areas where they see
opportunities for improvement for last mile
efficiency delivery execution (42%), customer
communication (41%), routing (40%), return
management (37%), and inventory management
(35%).
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Driver shortages remain a challenge. 73% of
companies are still struggling with driver
shortages
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