Interesting Article
25 December 2023

A case study of hub & spoke and drop & go for lastmile delivery in city

Currently, lastmile delivery in city area has been facing such uncontrollable factors which definitely impact on transportation cost and service level to delivery goods to customer as truckban regulation, traffic congestion, limitations of truck parking area, road size and its accessibility.

To confront the issues, several logistics strategies are adapted and applied for city operational transportation dpending on business. Examples are to reduce deliverable truck size, to initial area hub, consolidate orders and encourage full-truck load milkrun delivery.

City hub and spoke becomes common logistics model for lastmile service provider but limited buildings or land in city to implement either own or rent the hub is costly. Otherwise, drop and go model which utilizes less consolidating or crossdocking space is simultaneously worked with the hub and spoke, efficiently.

CRL Transport studies and pilot run this hub-and-spoke and drop-and-go model in office supplies and statineries business. The delivery case study has transformed three 4W direct deliveries to one 4W for midmile and EV motorcycles for lastmile in targeted BKK districts. When 4W carries orders from DC to the meeting point in first district, EV motocycles shows up and transfer the orders and deliver customer in the first district. After that the 4W will head to the meeting point at the next district, wait for the motorcycles who finish the delivery in prior district arrives and doing spoke for customer in the area. The process will repeat until the last meeting point then the 4W returns DC. See picture for your illustration.

In addtion to an opportunity of CO2 emission reduction by EV transportation, this pilot project gives interesting results that % next-day delivery is more than 95% while delivery cost is reduced by 8% in average. However, the process is still need improvement. Concerns of order constancy, package size and pattern, effective route planning and time management for both midmile 4W and lastmile motorcycles, together with transport safety management for lastmile motorcycle's loadability should be managerable.