Last-Mile Logistics - Innovative Approaches to Network Optimization and Customer Service Offerings
Loading...
Author / Producer
Date
2022
Publication Type
Doctoral Thesis
ETH Bibliography
yes
Citations
Altmetric
Data
Abstract
The last mile is commonly referred to as the last leg in a distribution network, connecting logistics facilities with consumers. Although the last mile typically represents the shortest leg in a supply chain it is generally regarded as the most complex and expensive one. The complexity and cost challenges of last-mile logistics are further exacerbated by the rapid urbanization, the ongoing boom in e-commerce and rising customer service level expectations. On the one hand, these phenomena translate into growing and fragmented demand for urban logistics services which burdens transportation networks with increased volume and higher operational complexity. These issues call for transportation network optimization to ensure that shipments can travel through the network in the most efficient way. On the other hand, rising service level expectations and e-commerce sales offer online retailers the opportunity to stand out from their competition through particularly innovative and sophisticated last-mile logistics service offerings. Thus, this thesis contributes to the academic discussions in the fields of transportation network optimization (Papers 1 and 2) and customer service offerings (Papers 3 and 4). In the first two papers, we analyze the route efficiency effects that emerge from combining first-mile pickup and last-mile delivery operations into joint routes. Specifically, we examine the effects of (i) precedence constraints, (ii) vehicle capacity constraints, and (iii) time window constraints on local route efficiency gains due to the integration of pickup and delivery operations. Building on the extant literature on continuum approximation of optimal route distances, we propose closed-form adjustment factors which incorporate these non-trivial route efficiency effects that otherwise could not be captured by analytical considerations. To this end, we conduct extensive numerical experiments and analyze our data using (symbolic) regression approaches. Our analyses suggest that the efficiency gains emerging from integrating first-mile pickup and last-mile delivery operations can be as high as 30%. However, the effective efficiency gains are highly sensitive to the three types of constraints which complicate the optimal stop sequence in integrated routes. The proposed adjustment factors are particularly relevant for the optimal strategic design and operational planning of modern, industrial-scale distribution networks. They help researchers and practitioners to efficiently quantify the expected benefits from integrating pickup and delivery operations, and to assess under which circumstances such an integration is (not) desirable. In the third paper, we examine how last-mile logistics services influence customers’ purchasing decisions. To this end, we first propose a hierarchical framework categorizing last-mile logistics services along five dimensions and 22 second-order attributes. By means of adaptive choice-based conjoint analysis, we then assess the importance of six selected attributes in detail. Our findings suggest that the delivery fee is most important (29.2% relative importance), followed by the delivery location (28.2%) and the delivery lead time (15.11%). Finally, an analysis of common scenarios implies that customers’ logistics service preferences are heterogeneous and that a diversified service portfolio significantly reduces online shopping abandonment. In the fourth paper, we investigate by means of an online experiment whether innovative last-mile logistics service offerings influence customer-based brand equity. Our regression analyses suggest that customers appreciate being offered a wide selection of last-mile logistics services so that their individual preferences are accounted for. However, customers do not appreciate the full flexibility of a build-your-own service as it leads to choice overload effects and additional configuration effort. Our findings imply that focusing solely on the costs associated with offering last-mile logistics services is myopic. Rather, practitioners and academics alike should be aware of the spillover effects of a carefully designed logistics service portfolio on a number of marketing-related constructs that are known to have a positive long-term impact on financial metrics.
Permanent link
Publication status
published
External links
Editor
Contributors
Examiner: Wagner, Stephan M.
Examiner : Winkenbach, Matthias
Book title
Journal / series
Volume
Pages / Article No.
Publisher
ETH Zurich
Event
Edition / version
Methods
Software
Geographic location
Date collected
Date created
Subject
Routing; Continuum approximation; Pickup and delivery problems; Symbolic regression; E-Commerce; Customer-based brand equity; Service innovation; Last-mile logistics service
Organisational unit
03813 - Wagner, Stephan M. / Wagner, Stephan M.