Policy Priorities for Reducing Emissions from Freight: Last Mile Deliveries

E-commerce concept, Transportation shipment delivery by truck, 3d rendering

Hope McGee

As part of IPPO’s work to equip policymakers with the best evidence and knowledge to meet Net Zero targets, our observatory is looking at the role of freight in contributing to carbon emissions.

IPPO recently held a systems mapping session to help determine the barriers to reducing emissions. The team also explored how the most carbon intensive ‘last mile’ of the delivery process, when packages are moved from a warehouse to customers’ homes, could be improved.

In this blog, I look at the themes raised in our conversations and how we need to frame the focus of our second mapping session on July 10th at 3pm. If you’re interested in joining our roundtable of experts from government, academia and industry to uncover the requirements for technology, infrastructure, supply chain optimisation, changes in consumer behaviour, business models and regulation that can guide government policy in this area, please email our team.

The Freight Industry and Carbon Emissions

The freight industry rebounded with ferocity after the slowdown imposed by COVID-19 restrictions. The pandemic accelerated and embedded an existing trend towards online sales and in 2022, in retail alone, online sales accounted for around 26.5% of sales nationally.

Transport is the largest contributor to UK domestic greenhouse gas (GHG) emissions, at 29.1% – with HGV and domestic freight making up about one-third of this.

The freight industry now contributes approximately £127 billion to the UK economy and supporting £400 million in manufacturing sales, it now makes up 10% of the UK non-financial business economy and employs nearly 2 million people within the logistics sector. In the UK around 90% of goods are transported by road, with the remainder shared equally between rail and freight.

Globally, The International Transport Forum (ITF) estimates that international trade-related freight transport accounts for around 30% of all transport-related CO2 emissions from fuel combustion and more than 7% of global emissions. The transport sector is responsible for 57% of global oil demand, with 97% of final energy for transport still coming from fossil fuels – and 99% of international shipping energy use.

Surface transport represents the biggest share. While international shipping and aviation are growing, they are each responsible for a fraction of total GHG emissions currently. Barriers to decarbonising freight differ by mode. Long-distance road freight and aviation face a lack of commercially viable technologies and supporting infrastructure.

Last-mile delivery is also growing in scale, with online commerce increasing the number of items transported to homes. Hence, the number of freight and logistics jobs have grown twice the rate of the wider economy since 2010 – by 26%. In 2022, the Department for Transport published its UK Future of Freight Plan in collaboration with industry. This looks at the requirements for planning and land allocations, talent pipeline and the harnessing of technology and data to tackle efficiency among growing demand.

Preceding this plan, the 2019 National Infrastructure Commission on freight focused on the need for better developed urban-scale infrastructure to ensure that electric vehicle charging, city distribution space and better planning mechanisms are in place to reduce congestion and emissions.

What became apparent in our initial mapping session with experts from UCL faculties of engineering and the built environment were the technological barriers currently in place.

Electric planes for long distances are a long way from becoming a reality and the same can be said for electrified ships and hydrogen-powered HGVs.

While sea freight makes up a small proportion of emissions, it is the most dependent on fossil fuels. New technologies hope to reduce carbon use, for example by reducing a boat’s friction of the boat in water.

Meanwhile, hydrogen fuel-cell-powered planes were only launched for the first time in 2023, with functional electric powered or hybrid flights still a future prospect.

Consequently, road transport is where the most impact can be made. Even with most journeys spanning continents, around half of all emissions are still generated in the latter end of the value chain from warehouse to point of purchase. Despite the fact most of the world’s freight travels by sea, road freight emits more than 100 times CO2 than the same items carried the same distance via sea.

Working Locally to Have the Most Impact on Emission Reduction

To ensure that ‘last mile’ delivery is less carbon intensive, local areas need infrastructure to enable the use of electric vans and bicycles.

There is also a need to encourage drivers to spend less time on the road making individual deliveries. Here, technology and data can play an integral role in reducing congestion. One idea is to encourage the use of unmanned collection lockers.

TFL, who control most of London’s public transport services, including the Underground, overground, the Docklands Light Railway and other rail services, trams, river services, Victoria Coach Station, Santander Cycles and Emirates Airline, have in place a freight and servicing plan. This is possible due to not only their control over transport but also other infrastructure such as strategic roads, city-wide signally and a vast portfolio of land and property. TFL are part of the Greater London Authority Group, providing us with some insight into how local political power and strategic oversight in the density of a capital city can be used to shape freight infrastructure.

In 2017, London drivers spent an average of 71 hours in gridlock, costing them the equivalent of £2,430 each and the city an estimated £9.5billion from direct and indirect costs that year. Tackling green last-mile delivery should be a priority and provide benefits for all.

London is not only ensuring the safety of HGVs and the collaboration of industry, but is aiming to reach 40,000 EV charging points by 2030 and use physical development to ensure consolidation centres are in place.

Meanwhile, proactive approaches are also being taken in Manchester and Coventry. Coventry is planning to build the CLEAN Hub, bringing together private and public sector innovation in a space with EV charging, mobility switching and eventually logistics hubs. As the 3rd largest city in the UK, Manchester has also recognised planning for more sustainable goods delivery as a key ambition in the Transport Strategy.

What Can Consumers’ Do?

In an area where consumers really do have to power to make a change to environmental degradation, an urgent question remains about what the evidence shows us about how to alter our behaviour. Whether encouraging locker collection or the acceptance of slower delivery, research shows that our demand for fast delivery over a standard wait has a disproportionate effect on the environment and urban traffic.

With the third largest ecommerce market in the world, the UK’s lack of willingness to accept slower delivery or pay more for more sustainable products or delivery is heavily engrained, suggesting clear education and more proactive regulation are needed. While local authorities’ have more control over transport planning and the built environment, national intervention is needed to support on behaviour change, the funding of consolidation centres and regulation to affect changes in corporate practices.

While local authorities’ have more control over transport planning and the built environment, national intervention is needed to support on behaviour change, the funding of consolidation centres and regulation to affect changes in corporate practices.

We will be hosing a roundtable on this topic on Wednesday July 10th 2024 at 3 pm for 60 minutes. A range of stakeholders will discuss who needs to be involved, and at what scale, in taking action to curb our unsustainable freight patterns. If you like to be take part, please get in touch at hope.mcgee.20@ucl.ac.uk.