E-commerce has the potential to make urban goods flow economically viable, environmentally efficient, and socially equitable. However, as e-retailers compete with increasingly consumer-focused services, urban freight witnesses a significant increase in associated distribution costs and negative externalities particularly affecting those living close to logistics clusters. Hence, to remain competitive, e-retailers deploy alternate last-mile distribution strategies. These alternate strategies, such as those that include use of electric delivery trucks for last-mile operations, a fleet of crowdsourced drivers for last-mile delivery, consolidation facilities coupled with light-duty delivery vehicles for a multi-echelon distribution, or collection points for customer pickup, can restore sustainable urban goods flow. Thus, in this study, the authors investigate the opportunities and challenges associated with such alternate last-mile distribution strategies for an e-retailer offering expedited service with rush delivery within strict timeframes. To this end, the authors formulate a last-mile network design (LMND) problem as a dynamic-stochastic two-echelon capacitated location routing problem with time-windows (DS-2E-C-LRP-TW) addressed with an adaptive large neighborhood search (ALNS) metaheuristic.
