“The economic costs of congestion are becoming too high especially as e-commerce becomes increasingly more popular. Whilst higher demand means a bigger load on logistics operators, more logistics operations mean more traffic and loss in terms of fuel and man-hours. It is high time to assess the possibility of night operations.”
This was stated by Franco Azzopardi, Chairman and CEO of Express Trailers who went on to explain how in many other markets, the ‘last mile’ concept, although not new, seems to be a tried and tested solution.
“In our sector, it is an accepted fact that the ‘last mile’ or final part of the delivery process, has become the costliest. This is where several solutions are increasingly being considered to aid the last mile delivery and one of these is night deliveries. For several years, many countries have been taking interest in this idea of off-peak hour delivery including night-time operations as an effective solution to shift traffic and ease congestion during the day,” says Franco Azzopardi.
He referred to several pilot programs that have been conducted to assess the effectiveness of such initiatives, the extent of efficiency gains and the environmental savings.
In New York, the economic benefits of night-time deliveries were estimated to have reached around $193 million a year. Another growing trend is that of unassisted off-peak hour deliveries as seen in operation in Manhattan. Here, the receiver or retailer does not need to be physically present during the delivery, but intermediaries, aided by technology, deliver the goods unassisted.
“It is becoming increasingly harder for transport and logistics operators to operate and for the general community to remain unaffected by operations like ours which we acknowledge to be a burden on the road. It is also a fact that people are struggling with the traffic situation which is making life more frustrating and leading to a lot of idle time and loss of productivity. I truly believe that as logistics operator, we can strike an efficient and cost-effective solution,” added Franco Azzopardi.
“The focus will need to be put on encouraging retailers to embrace this important shift and be an active part of the solution. A consensus between the main stakeholders such as government entities, retailers, logistics operators, citizens and residents in delivery zones could help lead to a collaborative approach to this problem,” he added.
“The main problem with introducing this scheme is the change in culture needed,” added Martina Vella who just graduated in Economics with her thesis ‘Investigating Stakeholders’ Support for Off-Peak Hour Deliveries in Malta’.
Franco Azzopardi welcomed Martina on board and stated “I am happy to now also have Martina joining my office as my personal assistant and research support. I am sure she will be adding further to our thought leadership.”
Ms Vella argues that while the proposition is not a pie in the sky but a studied, tried, and tested solution, there are still several challenges that will need to be taken into consideration to be able to introduce night-operations.
“The challenges outlined in various studies and experienced in real terms have always centred round four main aspects namely Noise, Access Restrictions, Receivers Participation and Carriers Participation. To discuss the best way forward, all stakeholders must be involved and encouraged to participate, and not forced to comply,” said Martina Vella.
“The early phases of adoption should not be pushed onto retailers and operators but encouraged through adequate incentives and support. It will be at a later stage that enforcement could be considered especially if the potential is recognized but participation remains low,” she added.
Noise could be an issue given that many warehouses are located in residential areas, but this is not so much an issue in industrial areas where people will not be disturbed. Another challenge is the problem of human resources since people would rather work during normal business hours for personal reasons, and only a limited amount of people would settle to work during off-peak. This however could mean higher wages leading to an increased cost for employers.
Referring to her research and surveying of a number of businesses, incentives that could encourage take-up of night-time operations include mileage fees for transport companies operating during off-peak hours, specific grants to companies who operate more sustainably with lower emission or electric vehicles, cheaper licenses for vehicles operating in off-peak hours, subsidies to counter the overtime charges as well as discounts on the amount paid for the shipping.
“Carriers and receivers may be encouraged by incentives such as tax concessions, grants and low-interest loans to counter any additional costs whereas Government might need to commit a degree of support by making up for some, if not all, of the additional costs to attract participation. Retailers also stand to benefit because there is higher guarantee that deliveries will arrive on time,” added Martina Vella.
“We are essentially looking at a more sustainable operation,” adds Franco Azzopardi. “As we know, the very notion of sustainability has become a defining element not only in the way companies operate but also how they define themselves. As logistics companies, we struggle to remain sustainable given the increase in traffic and the costs of congestion are high as we experience higher fuel and labour costs. Off-peak operations, can minimise costs especially if we operate more efficiently within a larger time window which will help us keep up with demand and take on more business.”
“Apart from all this however, one thing we are sure of: the country can no longer afford to remain complacent. The solution could be there. We just need to act,” concluded Franco Azzopardi.
