Increasing the cost efficiency of e‐fulfilment using shared reception boxes

Abstract

Recent research into last mile e‐grocery logistics has revealed that goods reception mode is one of the key issues for the operational efficiency of home deliveries. Hitherto, the research has considered home delivery concepts using attended reception and concepts enabling unattended reception based on customer‐specific reception boxes and delivery boxes. Customer‐specific reception boxes are installed in the consumer’s home yard or garage, while delivery boxes are insulated boxes that are returned to the retailer. Focuses on a third possible concept for unattended deliveries, namely shared reception boxes. Due to shared usage, the utilisation level of the facility is higher than in the case of customer‐specific unattended reception concepts. Analyses the operational cost levels of home delivery concepts using both attended and unattended reception, using real point‐of‐sales data and vehicle routing tools. The results show that transportation costs using the shared reception box concept are 55‐66 per cent lower in comparison with the current standard concept with attended reception and two‐hour delivery time windows. On the basis of our analysis, the cost reduction alone justifies the two‐to‐five‐year payback period of the investment required, even if there is only a fairly small number of deliveries per day. Surprisingly, the payback period is longer when customer density increases.

Citation

Punakivi, M. and Tanskanen, K. (2002), "Increasing the cost efficiency of e‐fulfilment using shared reception boxes", International Journal of Retail & Distribution Management, Vol. 30 No. 10, pp. 498-507. https://doi.org/10.1108/09590550210445362