New opportunities to improve last-mile deliveries

TORONTO — With population growth and the surge in online shopping, escalating freight traffic is contributing to the increased congestion and lengthened commute times that are plaguing the Greater Toronto and Hamilton Area (GTHA), costing businesses and families time and money. The Pembina Institute’s new report, Delivering Last Mile Solutions: A feasibility analysis of microhubs and cyclelogistics in the GTHA, identifies solutions, including implementation of delivery hubs and adoption of lower-carbon modes of transportation like cargo cycles and electric delivery vans, that will make urban deliveries more efficient while driving down carbon emissions.

Delivery hubs and cargo cycles, while they have been successfully implemented in European and other North American jurisdictions (which are also highlighted in this report), have not been properly considered in Canada. This report, generously supported by the Ontario Trillium Foundation, an agency of the Government of Ontario, is one of the first in-depth modelling studies on the potential of increasing urban delivery and last mile efficiency through microhubs. Microhubs allow businesses to consolidate goods closer to their final destination and therefore reduce the number of vehicle kilometres travelled in an urban area (also known as last-mile deliveries).

To demonstrate the potential, the new report models three scenarios under which a microhub delivery system, with deployment of small electric vans or cargo cycles for last-mile delivery trips, could viably operate and then compares them to a business-as-usual delivery system in select locations in Toronto (Church Street/Wellesley Street, and Yonge Street/Sheppard Avenue West) and Hamilton (Main Street West/Bay Street South). Our research finds that given the right context and conditions, these alternative delivery models can be viable and practical, and will save businesses money and time spent in traffic.

The report gives specific recommendations to businesses and municipalities on how to implement delivery cargo cycles and microhubs to help relieve congestion, reduce carbon emissions, and save everyone time and money. While the study is scoped to cases in the GTHA, it provides a good overview for practitioners in the public and private sectors across Canada.

Quick facts

In Canada, it is expected that freight emissions will exceed passenger emissions by 2030.
In Ontario, the volume of road freight activity grew by 154 per cent between 1990 and 2016.
The freight sector is a core part of Ontario’s economy, with 38 per cent of the province’s economy coming from freight-intensive industries.
The “last mile” of urban goods movement refers to the delivery of goods from some type of consolidation centre (e.g.: a warehouse, distribution centre, or microhub) to its final destination (e.g.: a retailer’s store or customer’s home). Last-mile distribution represents about 28 per cent of total logistics costs.
Delivery microhubs are logistics facilities for micro-consolidation, which is the bundling of goods at a location near the final delivery point.
Cyclelogistics is the integration of bicycles, tricycles, or other multi-wheeled cycles for goods movement purposes (also referred to as cargo cycles).
Two City of Toronto executive council committees recently passed two motions: to test a pilot project for using cargo cycles for city maintenance, and to propose a regulatory framework for e-bikes and cargo cycles.

Quotes

“The potential of microhubs and cargo cycles to improve last-mile deliveries is incredibly exciting. This report has the modelling proving the efficacy, paired with the implementation recommendations for both businesses and municipalities. We hope to continue this work with all stakeholders to actually implement these solutions, making the GTHA a last mile leader for the rest of Canada.”
— Janelle Lee, analyst, transportation and urban solutions, Pembina Institute

“With freight being such an integral and growing part of our economy, it’s essential to find solutions that work for everyone. In particular, that’s why we see the value of working with the private sector to help them reach their goals of reducing costs along with environmental impacts. Our research shows the potential to make urban freight more efficient, benefitting businesses and customers, the environment and the economy.”
— Carolyn Kim, director, transportation and urban solutions, Pembina Institute

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Visit pembina.org to download a copy of Delivering Last Mile Solutions: A feasibility analysis of microhubs and cyclelogistics in the GTHA.