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Building the Last-Mile Delivery Vehicles of the Future

Learn why LEVs are increasingly seen as the future of last-mile delivery in urban locations.

Nathan Wang article author avatarNathan WangOctober 15, 2021

In the past five years, $5 billion has been poured into the micromobility landscape to get people out of cars and onto Light Electric Vehicles. While we’re still in the early days of micromobility’s rise, there are many indications that LEVs are positively impacting transportation in cities. For example, they’ve improved key metrics such as livability, safety, equity, and sustainability.

Many debate about whether they are replacing cars, delivery vehicles, and even rideshares.

It may sound like hyperbole, but there are studies that reveal LEVs’ potential and signal a new chapter in urban transportation. Urban last-mile delivery, in particular, stands to be completely disrupted by these innovative new vehicles.

The Westminster University pitted cargo bikes against cargo vans in the City of London. Surprisingly, they found the cargo bikes beat the vans by delivering 1.6 times faster while also saving tons of CO2 emissions and decreasing congestion.

This study does not stand alone. From Seattle all the way to Singapore, the findings are consistent in dense urban settings with a high volume of package delivery —— LEVs outperform vans.

However, the problem is that people put more weight on delivering people between points. Yet, there hasn’t been enough investment for last-mile goods delivery in urban locations, given a big market left. It’s crucial, especially for the vehicle manufacturers, to think about how to transfer goods between.

So, why are LEVs increasingly seen as the future of last-mile delivery in urban locations?

Want to watch my entire keynote speech on “Disrupting Urban Logistics”? Check out the full video

Explosive Growth in Urban Populations

The United Nations reported that, by 2050, about 70% of the world’s population would be living in urban areas. That’s a lot of people on a small piece of land. 

The population aggregation and the function division of urban areas significantly changed the way people interact, and the majority of trips fall into the category of micromobility. Take the U.S. as an example; nearly 60% of trips are five miles or less. Riding a bike or scooter means a lower price and less space than owning a car, as well as a lower likelihood of being stuck in crowded public transportation. For city administrators, micromobility service could reduce the number of vehicles on the road, limit the environmental footprint and provide an economical method for short trips.

So, micromobility is a future choice for city dwellers and administrators to build a highly efficient and intelligent transportation network with the rise of urbanization.

Changing Consumer Expectations and Behavior

The organic population growth and the boost in migration will grant people better opportunities and access to services, and most importantly, lead to a change in consumer expectations and behavior. 

The trend has already existed in industries like e-commerce. Ten years ago, some were fine with waiting 5-10 business days for free shipping. Contrast that to now, where consumers expect free shipping in two days or less, or else, they might not order.

This may sound picky, but e-commerce companies have done great exceeding customer expectations, and that’s why we see double-digit growth in this industry year over year.

Especially last year, when the pandemic changed day-to-day life, think about how magic that is, with just one click sitting at home, household goods, medications, and vital necessities all delivered to people without them leaving the security of home. 

This has engendered the value that the delivery-focus brands bring to consumers. To improve customer acquisition and satisfaction, brands need to provide short-time shipments facing the barriers such as traffic congestion.

LEVs are a game-changer. They are easy to access with low emissions and less time spent on dealing with unpleasant traffic conditions. It’s a new chapter of delivering whatever people want within a short time.

Real World Constraints – Congestion and Parking

While micromobility tech will be an enabler, it still has to operate in the real world.

Van and truck-based delivery drivers lose a significant amount of time stuck in traffic or searching for parking. The cost, when added up, is staggering.

According to INRIX, in the U.S. alone, nearly 88 billion worth of productivity a year is lost just due to congestion. This is more than the entire economy of Luxembourg, one of the wealthiest countries in Europe.

LEVs, in contrast, are not in thrall to mass transit. They are flexible in terms of navigating and parking in the city.

Decarbonizing the Operation of Last-Mile Delivery Vehicles

The micromobility industry also has a significant role in reversing climate change and reducing the environmental impact that transport has in urban areas. The latest report from the Intergovernmental Panel on Climate Change said that humans are behind global warming. But to curtail our impact, we need to reach net-zero carbon emissions.

Though sectors like energy production and agriculture may emit more greenhouse gases, they have made strides to either maintain or decrease their emissions over time. In contrast, emissions from transportation are still on the rise. 

Not everything is doom and gloom. As LEVs become more common, we may see noticeable positive effects in as little as 20 years.

For many companies, vehicle electrification is core to their strategy. Amazon has committed to electrifying its entire delivery fleet by 2030. And this trend extends across the whole industry, with commercial vehicles getting electrified at a faster rate than ever before. Last year, there were nearly 500,000 vehicles in production. 

But it’s not enough. 

When you look at the big picture, electric vehicles are just a rounding error compared to their internal combustion counterparts. 

This isn’t a demand issue. This is a supply issue. 

If every company in the world wanted to purchase only EVs from here on out, we wouldn’t have enough of the core components, the batteries, the manufacturing facilities, or the runtime to meet that demand. 

The future supply issue and potential growing market leave a major opportunity for micromobility manufacturers. Those who can provide sustainable tech and components supply would stand out and win the battle.

I dove deeper on these topics in a webinar with Micromobility Industries. Listen to me and Micromobility Industries podcast host Oliver Bruce go deep on LEVs and the future of last-mile delivery

New Last-Mile Delivery Vehicles, Same Infrastructure

Pitney Bowes keeps track of every shipment that is shipped worldwide. In 2019, 103 billion parcels were sent. That number is expected to double in less than four years, which means we will have twice the number of packages going through infrastructure that is already tapped out. 

Think about the online service provider, America Online, which owned more than 50% of the market share of dialing up to the internet back in the twenties. In 2000, they completed one of the most historic acquisitions with Time Warner Cable, and their valuation was $226 billion. But a mere two years later, that valuation dropped down to $20 billion. 

How does that happen? 

There was a slew of other companies introducing broadband, a new method of delivering much faster using the same infrastructure.

The takeaway is clear, use the fastest delivery methods or die. 

Companies for whom delivery is core to their business, such as Amazon, DHL, and Uber, already have teams dedicated to optimizing the last mile, using micromobility and light electric vehicles to do so. 

We’re at the tipping point where light electric vehicles are going to begin replacing vans when it comes to urban deliveries. But not everyone will succeed. There will be winners and losers, and what will separate the two is the winner’s ability to plan for this mode shift.

But you might be asking, how do you plan for a mode shift? How do you plan for something entirely new? 

For the last ten years, Particle has specialized in helping companies connect their physical assets to the internet using our integrated IoT platform. Our team at Particle was one of the early birds that participated at the beginning of the scooter wars, which later turned into the much larger micromobility movement. 

Since that time, Particle has helped dozens of teams connect hundreds of thousands of IoT-enabled electric vehicles worldwide for commercial purposes. 

What we’ve learned is that the most successful LEVs exhibit the five following characteristics. 

  • Intelligent

LEVs are complex systems that integrate motors, battery management systems, alarms, emissions monitoring, GPS, and WiFi location systems. All this technology needs to operate in concert. 

  • Connected

The vehicles need to be self-aware, connected, and able to tell riders where they are in the world to plan navigation and tell technicians what servicing needs to be done. 

  • Upgradable

Each vehicle should have a cellular connection. Once the connection is in place, it’s not enough just to read data off of the vehicle. It should be able to write data to the vehicle, just like with a smartphone or car. Particle simplifies this with over-the-air firmware updates.

  • Secure

It’s not just about making sure that a vehicle is theft-proof and GPS-tracked. It’s about making sure that the data coming off of that vehicle is encrypted and compliant with various standards like the Mobility Data Specification.

Because this data is going to go to a multitude of sources. For example, proprietary apps licensed to small customers for fleet management and third-party stakeholders, such as cities, who are more so than ever, are starving for this type of data to make intelligent infrastructure decisions. 

  • Open

There is mobility as a service mass apps like Google Maps and Apple Maps. To make the vehicles visible on the front page of the internet, the company has to have an open architecture when it comes to anyone planning a trip.

These are the foundational pillars of the most successful LEVs. But it’s no small feat to integrate all of this connectivity and data management, especially if your core competency is a vehicle manufacturer. 

Fortunately, Particle has designed our platform to have all of these functionalities out of the box. Some of the leading teams in this space, like Bond and Zoomo, with tens of thousands of light electric vehicles powering commercial deliveries, have chosen to partner with us. 

The advantage is that both can focus on their core competencies, get to market faster, and accelerate the adoption of light electric vehicles while letting Particle handle the complex parts of building IoT infrastructure.

If you’re ready to start building the future of how we move today, then we’re ready to partner with you. 

Check out my latest webinar where I did a deep dive on the future of last-mile delivery with Micromobility Industries. 

Learn how you can build and operate vehicles that help you win more city permits and differentiate your micromobility business with our whitepaper, Micromobility and Regulatory Compliance.

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