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Going the Extra Mile Urban Last-Mile Delivery of Large Goods

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Going the Extra Mile Urban Last-Mile Delivery of Large Goods DEGREE PROJECT IN THE FIELD OF TECHNOLOGY INDUSTRIAL ENGINEERING AND MANAGEMENT AND THE MAIN FIELD OF STUDY INDUSTRIAL MANAGEMENT, SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2021 Going the Extra Mile Urban Last-Mile Delivery of Large Goods EMELIE SUNDSTRÖM EMMA SÖDERGREN KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT This page is intentionally left blank. i Going the Extra Mile Urban Last-Mile Delivery of Large Goods by Emelie Sundström Emma Södergren Master of Science Thesis TRITA-ITM-EX 2021:125 KTH Industrial Engineering and Management Industrial Management SE-100 44 STOCKHOLM ii Gå den extra milen Urban sista-milen-leverans av stort gods av Emelie Sundström Emma Södergren Master of Science Thesis TRITA-ITM-EX 2021:125 KTH Industrial Engineering and Management Industrial Management SE-100 44 STOCKHOLM iii Master of Science Thesis TRITA-ITM-EX 2021:125 Going the Extra Mile: Urban Delivery of Large Goods Emelie Sundström Emma Södergren Approved Examiner Supervisor 2021-05-26 Kristina Nyström Martin Vendel Commissioner Contact person IKEA Samina Jamil Abstract In light of the growing e-commerce and rising population in cities, along with the ongoing climate crisis, the efforts to improve transportation options are intensifying. Thus, the field of last-mile delivery, i.e., the last stretch of transportation to an end customer, is becoming an increasingly researched topic. Innovative delivery solutions, leveraging novel technology or business concepts, are quickly becoming a necessity to retain customer satisfaction while performing sustainable and cost-efficient deliveries. Facing the challenges associated with the last mile is especially arduous in the context of large goods, i.e., packages which are significantly larger than parcels that would fit in a regular mail or post box, and may include furniture, home appliances and other bulky tools. Despite that large goods delivery comprises a large market, there is limited research on how novel last-mile delivery innovations, mainly discussed for application on parcels, can be deployed for larger items. This thesis is an explorative and qualitative study which starts in a background of important trends in transportation, and moves on to provide an analysis of three cities (Barcelona, San Francisco and Seoul), as well as a fourth city (Stockholm) that is both analyzed and considered for implementation. This is done in the form of a case study where data is collected from a literature review as well as interviews with representatives from the company IKEA. Various last-mile delivery concepts are explained and analyzed with Rogers’ diffusion of innovation framework. The research generated insights on how a mixture of different solutions have emerged on the studied markets, mainly based on social, technological and regulatory factors. Although most of them would be theoretically usable for medium to large goods in the future, there are different obstacles to a commercial-scale adoption today, with technological and regulatory maturity being main hurdles. Parcel deliveries play a part in driving customer expectations forward, forcing large goods retailers to evolve their deliveries in order to not lose business. Ecosystems of delivery solutions are likely to emerge in the future, catering to customers’ flexibility demands. In terms of concrete solutions, e-cargo bikes, pick-up points and neighbourhood deliveries are identified as appropriate for the current market state of Stockholm and related third party agreements, physical properties and platforms are discussed in the context of implementation. Additionally, suggestions for future research is to consider further models for generalizing implementation requirements, along with deepening the analysis of last-mile delivery ecosystems by looking into actors for the suggested solutions. Keywords: Last-mile delivery, large goods, delivery of large goods, transportation, transportation innovation, PESTLE, Rogers’ diffusion of innovations iv Examensarbete TRITA-ITM-EX 2021:125 Gå den extra milen: Urban sista-milen-leverans av stort gods Emelie Sundström Emma Södergren Godkänt Examinator Handledare 2021-05-26 Kristina Nyström Martin Vendel Uppdragsgivare Kontaktperson IKEA Samina Jamil Sammanfattning I och med ökande e-handel och stigande befolkning i städer, i kombination med en pågående klimatkris, intensifieras ansträngningar för att förbättra existerande transportalternativ. Därmed ökar mängden av forskning som fokuserar på last-mile delivery (ungefär sista milen-leverans), med andra ord den sista biten av en transportsträcka innan en vara når slutkunden. Innovativa leveranslösningar, som drar nytta av ny teknik eller nya affärsmodeller, håller snabbt på att bli en nödvändighet för att upprätthålla kundnöjdhet, samtidigt som leveransers kostnadseffektivitet och hållbarhet måste säkerställas.Utmaningarna som är associerade med sista milen är särskilt svårlösta när det kommer till stort gods, vilket är kollin som är signifikant större än vanliga paket som skulle få plats i en brevlåda eller postbox, och inkluderar bland annat möbler, vitvaror och andra skrymmande varor. Trots att leverans av stort gods utgör en omfattande marknad så är den befintliga forskningen begränsad vad gäller hur nya last-mile-innovationer kan användas för stort gods; detta diskuteras framförallt i samband med vanliga paket. Denna uppsats är en explorativ och kvalitativ studie som tar avstamp i en bakgrund som beskriver viktiga transporttrender och vidare analyserar tre städer (Barcelona, San Francisco och Seoul), samt en fjärde stad (Stockholm) som både analyseras och diskuteras för potentiell implementation. Detta utförs i form av en fallstudie där datan inkluderar en litteraturstudie samt intervjuer med representanter från företaget IKEA. Flertalet last-mile-leveranskoncept förklaras och analyseras med Rogers’ teori för innovationers spridning. Studien gav insikter om hur en blandning av olika lösningar har uppkommit på de undersökta marknaderna, i huvudsak beroende av sociala, tekniska och legala faktorer. Fastän de flesta i teorin skulle kunna appliceras på medelstort till stort gods i framtiden så finns det idag olika svårigheter som bromsar införandet av dessa på en kommersiell skala; teknisk och legal mognad verkar vara de huvudsakliga hindren. Paketleveranser spelar en viktig roll i att driva på kundernas förväntningar, vilket tvingar försäljare av stora varor att utveckla sina leveranser för att inte tappa sin omsättning. Ekosystem av leveranslösningar kommer troligen att utvecklas i framtiden för att möta kundernas krav på flexibilitet. Vad gäller konkreta lösningar identifieras elektriska lastcyklar, upphämtningsställen och grannskapsleveranser som passande för dagens Stockholm, och följande tredjepartsavtal, fysiska egenskaper och plattformar diskuteras i implementationssammanhang. Fortsatt föreslås framtida studier att överväga ytterligare modeller för att vidareutveckla och generalisera implementationskrav, samt att fördjupa analysen av ekosystem relaterade till last-mile-leveranser genom att undersöka involverade aktörer för de föreslagna lösningarna. V Table of Contents List of Figures ............................................................................................................................................... 4 List of Tables ................................................................................................................................................ 5 Abbreviations & Glossary ............................................................................................................................. 6 Foreword ....................................................................................................................................................... 7 1. Introduction ............................................................................................................................................... 8 1.1 Background ......................................................................................................................................... 8 1.2 Problem Statement .............................................................................................................................. 9 1.3 Case Company .................................................................................................................................. 10 1.4 Purpose .............................................................................................................................................. 11 1.5 Delimitations ..................................................................................................................................... 11 1.6 Sustainability..................................................................................................................................... 12 1.7 Disposition ........................................................................................................................................ 15 2. Literature Review .................................................................................................................................... 16 2.1 Last-Mile Delivery ............................................................................................................................ 16 2.2 Last-Mile Delivery of Large Goods .................................................................................................. 17 2.3 Urban Mobility .................................................................................................................................
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