DPDgroup: Urban Logistics To See Largest Investments

Logistics and Supply Chain News

Hervé Crochet, Group E-commerce Industry Director, DPDgroup

The pandemic reshaped the way logistics organisations look at their networks. Many built new capabilities very quickly but now, when consumers are going back to the shops, these networks look unneeded. We spoke with Hervé Crochet, Group E-commerce Industry Director, DPDgroup, at Deliver, one of Europe’s largest e-com forums. You can read more from Deliver soon.

During the pandemic it felt easy for online vendors as everyone had to shop online.Where is the e-commerce market right now when we have returned back to the store?

The global e-commerce market had two fantastic years, and we are now entering a post-pandemic era with a slowdown in growth. The return to shops has had a strong impact on online sales. Still, as people got used to buying online there is a good base that has been established. But even before the pandemic in Europe we could already see a maturity of the growth. Globally it is expected that the growth of e-commerce will slow down in the next few years.

What does this mean for logistics networks? 

There was a lot of investment during the pandemic to cope with the increase in B2C parcels. There is a lot of delivery capacity now on the parcel market as Covid 19 accelerated carrier infrastructure deployments which provide room to cope with future growth.

Would that mean less investment in the coming years?

That would be more likely for large structures and big hubs. More investments will happen in the area of out-of-home deliveries and as well as in urban logistics as nearly 75% of the European population live in cities. At the same time the market will see a lot of consolidations specifically in the Q-commerce area. 

What is part of DPDgroup’s urban logistics strategy?

Part of our urban deliveries strategy is lowering our carbon emissions. We have started in many cities where deliveries are with low emission vehicles. Our plan is to develop 350 European cities by 2025 with low emission, last mile vehicles. We don’t just want to ship from stores but also use large warehouses that can deliver to urban depots and then use bikes, for example, and deliver the last mile.

Where are urban facilities going to go? There isn’t a lot of space and a lot of it is just unsuitable for logistics use.

That is correct. In some cities it will be quite difficult but in the meantime there are stores that can be used as they suffered from the pandemic and also parking in cities excluding cars from city centers. In some areas DPDgroup has warehouses around large urban areas from which we use electric trucks to deliver. Urban micro-fulfilment is something we want to invest in but it is not going to be possible everywhere.

Isn’t separating deliveries in this way more complex and costly? First you use a truck and then a bicycle.

Sustainability has a cost, for sure. We need to invest in this now as regulations will increase in the near future. It is also at the heart of our ‘Together & Beyond’ ambition : to become the international reference in sustainable delivery and a leading enabler of e-commerce acceleration.

How is logistics supporting the whole consumers’ journey from the click on the page to the actual delivery?

There are many aspects from preparing the preparation of correct orders in a timely manner to providing the adapted delivery place and speed in each local market, as well as putting the consumers in the driver’s seat to adapt to their mile requirements.  Carriers like us also invest in innovation projects. For example, we have invested in Stuart – a very dynamic company that is delivering on demand and on time window from store and also with cross-docking capabilities. We are looking at the market constantly and are striving to anticipate & adapt market needs.

We spoke a lot about cities but how about rural areas where you can’t optimise as well?

We have a very extensive delivery network and on top we developed our parcel shops network, which currently contains about 65000 parcel shops worldwide to provide convenience and more effective cost to serve. 

Would we see consumers being finally asked to pay for deliveries?

We already see this. Large organisations are still subsidising it, however.  Some large retailers have recently already started asking consumers to pay for returns. It is possible that those market leaders will set the future trend in this area.

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