In the last decade, e-commerce has grown substantially and transformed individual shopping behaviors. Most shopping activities—at least part of the search, if not the purchase itself—now involve an online component. This has consequently changed commodity flow and urban goods distribution. E-commerce has the potential to reduce the negative impacts of shopping on the environment by substituting individual shopping trips to stores using personal cars with optimized truck deliveries. However, shopping behavior is often more complex than this one-to-one substitution.
Additionally, e-retailers entice consumers with free shipping, free returns, same-day, one-hour or two-hour expedited deliveries, and more in a quest for increased market share. These enhanced services result in additional distances driven, emissions, and operational costs for the e-retailer. The increasing customer expectations around lead time, delivery time, and return policy present a need for more sustainable delivery options, particularly for the “last mile” between the distribution center and the customer. Last-mile operators are considering alternatives to traditional diesel truck-based, door-to-door delivery such as use of alternative fuel (e.g., electric) vehicles, delivery from micro-hubs using cargo bikes, customer pickup at collection points, and crowdsourced deliveries. Researchers at the University of California, Davis developed models for e-commerce demand, last-mile delivery operations, and cost and sustainability assessment, then applied this modeling framework to a case study in Southern California to evaluate the potential impact of these strategies under different delivery scenarios. This policy brief summarizes findings from that research, along with policy implications.