COMMUNITY LOGISTICS: A NOVEL AND EFFECTIVE DELIVERY STRATEGY FOR E-COMMERCE LAST MILE DELIVERY

Abstract

Last mile delivery shows an increasingly tough challenge for logistics service providers due to the rapidly expanding e-commerce sales around the globe. Numerous, fragmented and dynamic arrival e-commerce parcels significantly complicated the delivery process, leading to that last mile delivery has become the most time and money-consuming part in the whole logistic chain. To ease the solution and implementation of last mile delivery, a commonly used delivery strategy is to predefine the serving regions of vehicles before optimizing its delivery route. On this ground, this study develops a novel delivery strategy namely Community Logistics (CL) to simultaneously determine vehicle serving region and departure time by dynamically generating compact delivery communities. By adopting CL, the last mile delivery can be transformed to a new type of optimization problem, namely, dynamic community partitioning problem (DCPP), with an aim to strike a balance among vehicle serving region range, order delivery time constraint satisfaction and vehicle capacity usage based on the real-time order and vehicle status. The CL delivery strategy is adopted in three last mile delivery scenarios with different order features, including: Scenario 1: Orders stochastically distribute in a continuous area and need to be delivered as soon as possible once arriving the depot; Scenario 2: Orders stochastically distribute in a continuous area and need to be delivered within specific time window; Scenario 3: Orders stochastically distribute in an area with discrete cells divided by geographical barriers or administrative boundaries and need to be delivered within specific time window. A preliminary case study is conducted based on the Scenario 1, and the results show that CL can yield compacter vehicle serving area, smaller order postponement time, larger vehicle capacity usage and shorter vehicle traveling distance compared with traditional delivery strategy with static delivery area and departure time.

Keywords: Last mile delivery; B2C e-commerce; Community logistics (CL); Dynamic community partitioning problem (DCPP); Delivery strategy