The Netherlands have seen unprecedented growth in last mile delivery over the past years. Leading the way in sustainable transport as well as e-commerce, they provide impulses for other European countries.

The Online Boom continues, and so Does Parcel Volume

Online shopping demand increased strongly during the Covid-19 pandemic, with the total number of inland parcels shipped rising from 350mn in 2018 to more than 600mn in 2021.

(Source: CBS and Estimates ING)

The share of online grocery shopping has also grown with 5.3% of supermarket sales coming from online in 2021 (an increase of 30% versus 2020). Only available in the bigger metropolitan areas a few years ago, online grocers now cover almost the entire country.

Online Grocery: More Choice and More Sustainability

Notably, the adoption of online grocery shopping has also led to new concepts for consumers: Online grocer Crisp sources produce from local farmers as well as fresh herbs from a vertical farming centre near Amsterdam, fulfilling consumers’ desire for sustainable and organic produce.

Infarm vertical farming herbs for Crisp’s online grocery customers (Source: Crisp)

Pieter Pot packages all products in reusable glass jars that are returned during the next pick-up, which makes them the first online grocer free of plastic packaging.

Pieter Pot Online Grocery Products (Source: Pieter Pot website)

However, online grocer Picnic, the first to built small electric vehicles solely designed for efficient online grocery has also expanded the offering for consumers: Picnic has become a DHL service point, making it possible for customers to ship DHL parcels with a shipping label at their door when receiving groceries – this also ensures that Picnic vehicles are not returning empty to their last mile hub.

Last Mile City Hubs Increase Route Efficiency

The Netherlands have also become a lab to test various city hub concepts aimed at reducing the number of kilometres driven (i.e. the number of vehicles in cities) by better bundling parcels outside of city centres. As trucks delivering goods from far-away warehouses typically have combustion engines, utilising city hubs is also a way to ensure 100% emission free last mile delivery.

City hub pictogram of Utrecht (Source: www.cityhub.nl)

However, the last mile delivery of fresh or frozen goods remains very challenging, especially in battery-powered vans and/or electric bikes. Leen Menken Foodservice Logistics is currently testing a mobile cooling box, which can be dropped close to city centres by larger trucks. Riders on cargo bikes can access the box from there to quickly deliver the food, maintaining a continuous cooling chain. During the day, the cooling box is kept cool using solar panels. Once emptied, three of these cooling boxes fit on a truck for pick-up.

Solar-powered Fresh City Hub (Source: Screenshot Leen Menken)

Business and Consumer Demand for Last Mile Solution Changes

Given the ample availability of light-weight electric vehicles like scooters and the increasingly high barriers to combustion engines in inner cities, many consumers and small businesses try to avoid using (and owning) them altogether. This increases the need for smart sharing options, as well as last mile solutions to transport bulkier and heavier items. Mego Mobility has modified a Biro electric two-seater car with racks to carry tubes and other building materials.

Rental utility vehicle (Source: Mego)

Craftspeople can rent these utility vehicles at an out-of-town DIY store in the morning and return it in the evening. That’s a solution with huge potential considering that construction-related traffic makes up for ~30% of km of last mile traffic in inner-cities.

Last mile integration in sharing economy (Source: BIYU)

Startup BIYU wants to become the ‘Netflix of things’, allowing consumers in Amsterdam to rent everything from a high-pressure cleaner to DJ equipment for a party. As most of BIYU’s customers don’t have a car, a last mile delivery service for larger items is essential for the service proposition.  After all, this eliminates the need to own or transport products that are needed only once in a while – a step towards a more sustainable city.

New Mobility Solutions Are Needed to Fulfil Last Mile Requirements

Considerable progress has been made on a ‘smarter’ last mile using routing software and/or apps. However, it has also become clear that the currently available small electric vehicles and bikes need further development to bring these new last mile solutions to scale. PON holding, a conglomerate mostly known for Volkswagen dealerships, is transforming itself into a mobility service company, having acquired the popular cargo bike brand Urban Arrow as well as owning a majority share in D2C Bike Sharing company Swapfiets. Starting with Urban Arrow Bikes, they have also launched B2B bike leasing company DOCKR, providing many last mile companies with bikes and taking care of frequent maintenance to keep the fleet running.

A BIYU Rider on a DOCKR Chariot delivery bike (Photo: Brand Experts)

While some of the new last mile solutions are legally still a bike, it has become clear that using automotive engineering and materials provides superior builds for reliable fleets with heavier cargo. Cargo bike company Fulpra, for example, has built a bike that can be loaded with transport dollies; its volume has been maximised to just fit within the legal requirements of a bike.

Dutch Last Mile Innovation – Export to Other Countries

Whilst last mile solutions will continue to evolve, it remains to be seen which innovations will succeed and be applied across other cities and countries. However, we strongly believe electrification, sustainability and sharing will play a major role in transforming the inner-city last mile.

Note: If you are looking for further last mile innovation best practices in smart routing and optimized packaging, then please  also have a look at our previous article on this topic.

About the Author:

Maximilian Gellert is passionate about transforming digital technologies into pragmatic every-day solutions for retailers. Combining consulting experience with industry functions in premium apparel, online grocery and last mile logistics he supports companies in their digital challenges and last mile innovation. Read more of his work here or connect with him via email.