Why reducing the ‘Cost of Drop’ is key to conquering the Last Mile

Are online shoppers being given enough delivery options to choose from? A Manhattan survey in August 2023 of Dutch online shoppers revealed that only 34 percent of consumers believe e-tailers actively indicate what is the most sustainable shipping option, and that the majority, some 57 percent, think they could do better.

The survey also found that two-thirds think all webshops should offer both climate-friendly delivery and return options.

The finding chimes with a recent DHL report based on surveys carried out in nine major European countries, which revealed that over half of online shoppers are prepared to pay more for green delivery options.

But what about the shoppers who value sustainability but don’t want to pay extra? Are CEP operators overlooking options that would enable them to make deliveries more sustainable and cheaper for their end-consumers?

Knowing customers’ Slipper Distances

CEP operators need to ask their customers how far they’re prepared to conveniently walk to pick up their parcel.

The industry is increasingly referring to this as the ‘Slipper Distance’ – how far end-consumers are prepared to walk in their slippers.

The answer might not necessarily reflect how sustainably-minded the end-consumer is. A remotely-located organic farmer might say zero metres based on the emissions they might produce on the journey to the delivery point, whereas a climate sceptic in the city might say 200 metres – figuring they pass by their local shops on a daily basis.

The Slipper Distance is just as much about practicality than attitude – for example, in city centres it might be impractical or expensive to drive or park vehicles, points out Elmar Toime, Postal and Logistics Strategic Advisory and Non-Executive Director at Qatar Post:

“Green initiatives that may limit multiple vehicle entry into congested areas will favour centralised delivery points such as lockers.” 

Lowering the Cost of Drop

Knowing the Slipper Distances of their end-consumers can enable CEP operators to hugely cut the ‘Cost of Drop’ – the number of parcels delivered per location.

Delivering parcels on a route made up of 30 different addresses – requiring drivers to figure out 30 different ways of parking legally and conveniently, along with 30 different ways of obtaining access to the end-consumers – is both time-consuming and costly.

Compare that to making just one delivery of 30 parcels – the guarantee the driver is using every minute of their route productively, which makes good financial sense, says Toime:

“Different labour models are emerging that allow flexible hours, payment according to delivery productivity, and reduced capital expenditure from the overseeing delivery organisation.”

Heading into 2024, CEP operators need to prioritise knowing end-consumers’ Slipper Distances and reducing the Cost of Drop in order to make the Last Mile more viable, contends Christian Østergaard, Lead Visionary – Senior Group Strategist of IT Production/IoT/AI at PostNord:

“Moving away from a delivery service that drops one parcel per stop to one that drops multiple parcels – at a PUDO or lockers, for example. Near-home deliveries like these will not only drive down the cost per drop, but offer a far more sustainable way of working, along with certainty the parcel can be delivered at the first time of asking.”

Why lockers tick most boxes

Østergaard has seen the success of lockers first-hand in his native Denmark, where consumers are happy with a convenient Slipper Distance if they can make deliveries more sustainable:

“Since their launch by DHL 20 years ago, lockers are really taking off in the Nordics and Europe in general – end-consumers are happy they can pick up parcels 24/7 instead of waiting at home, and they are also thinking more sustainably.”

Home deliveries are often seen as an integral part of receiving a parcel, but maybe it’s time for the industry to “sacrifice one of our Holy Cows”, reasons Østergaard, and Toime concurs:

“In The Last Mile, the ultimate winners will find optimum delivery models with lockers, better drop density, click & collect etc. It is an ongoing gradual evolution.”

Data-sharing key to cracking the Last Mile

To enable a more profitable Cost of Drop, the CEP operators need more data, and they can achieve this by sharing more of their data with the end-consumers.

After all, senders might be asked how they want their parcels delivered, but how often are end-consumers asked about how they would like to receive them?

Enhancing their omnichannel capabilities is key to CEP operators becoming “top logistic operators committed to environmental sustainability”, asserts Thierry Golliard, Director of Innovation and Venturing at Swiss Post, but they’re not quite there yet:

“Customers expect a seamless user experience, regardless of the digital touchpoints they have with delivery companies. The industry has improved many related aspects but still has a long journey ahead to offer this seamless experience we’re all aiming for.”


Are CEP operators and e-tailers listening to their end-consumers enough? Many opt to shop online because it’s less expensive than going to a physical store, but deliveries can be both cheap and sustainable. If the only extra cost is walking a ‘Slipper Distance’ to pick up the parcel, then they tend to be invested. CEP operators who find out how far they’re prepared to walk can dramatically reduce their ‘Cost of Drop’ and rake in the profits.

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