European B2C Fulfillment Practices Could Be Coming to the U.S.

Europe was the birthplace of the modern port and has always provided inspiration on what’s next in logistics, including eCommerce fulfillment.

That’s a topic we tackled recently on an episode of Unboxing Fulfillment – the modern B2C fulfillment podcast. Host Chad Warzecha, of Staci Americas, chatted with Rod Franklin, a Professor at the Kuehne Logistics University in Hamburg, Germany, who follows European B2C fulfillment trends closely.

Take the pulse of what’s going on across the pond by reading top takeaways from this interview below. For eCommerce companies looking to increase productivity, reduce final-mile delivery costs, and win on the sustainability front, Rod offers an expert-practitioner’s perspective with a European take.

European B2C Fulfillment Trends in the Final Mile

The Europe Rod describes is a testing ground for B2C fulfillment practices leveraging small electric vehicles (EVs), cargo bikes, autonomous vehicles, and crowd-sourced resources.

In the Netherlands, Rod says crowdsourcing and electric bikes combine for a prominent version of sustainable final-mile delivery. Neighbor helping neighbor, and also helping the environment and their wallet at the same time. “It’s a very big thing,” he says, “There are platforms where individuals can sign up as local delivery agents using their own vehicles. They drive to places they were going to anyway, like to and from work, but now deliver orders en route.

Rod says ad hoc delivery services like these make up about 20% of the deliveries within cities. The other 80% are performed by the majors – DHL, UPS, FedEx – who operate their own version of what Rod describes as “micro-warehousing.”

“They bring parcels to a central place in a city or on the outskirts – maybe a store location or shipping container. They then use electric bikes with parcel lockers on the back to carry these parcels to end customers. Once they've completed outbound deliveries, they do a route for pick-ups and bring those goods back to the “micro-warehouse.” In the evening, those products are picked up and brought back to the central distribution center for sortation and redistribution,” Rod says.

“So we're seeing a lot of that in cities because it eliminates having vans in the community and it enables the big parcel companies to still do the volumes that they need.”

France and Spain recently brought autonomous final-mile operations online.

A collaboration between logistics coordinator Goggo Network and retail giant Carrefour introduced a self-driving delivery service in France. It’s the first of its type to operate autonomous delivery vehicles on public roads in Europe. This autonomous last-mile delivery service for groceries was launched in Plateau de Saclay, south of Paris. Autonomous last-mile deliveries in the Spanish cities of Zaragoza and Alcobendas were launched months afterwards by Goggo.

Spain is a hotbed for sustainable final-mile delivery solutions. Urb-it has a fleet of 100% e-cargo bikes that recently went live in Madrid and Barcelona. According to its website, Urb-it’s deliveries reduce carbon emissions by 90% compared to traditional vans. Additionally, they say deliveries are more efficient than traditional vans by performing twice as many stops and reducing congestion.

Cargo bikes, like those employed by Urb-it, as well as small EVs are effective solutions in cities like Barcelona where low emission zones restrict vehicles without an environmental label issued by the government.

Urban areas seem like a natural for sustainable final-mile programs, but how about the suburbs or rural areas? CargoSurfer is a digital logistics platform connecting underutilized – and unexpected – vehicles that travel to these areas and have the residual capacity to transport shipments locally.

The CargoSurfer network aims to connect buses and regional trains, as well as carriers and freight service providers, to a system of regional bundling points via the logistics platform. Still in development, the platform is the product of a German consortium that includes Kuehne Logistics University.

With a similar logistics platform in America, perhaps underutilized capacity on commuter trains, inter-city bus lines or utility fleets could be combined to provide competitive parcel service.

Warehouse Labor is Key Challenges in European B2C Fulfillment

Moving from transportation to the labor side of eCommerce fulfillment practices, brands in both the U.S. and Europe have the pressure to manage labor costs. But in Europe, that pressure is more pronounced because of the relatively higher cost of pay and benefits.

One response is automation. Rod says automation is the rule not the exception in Europe – mostly in the form of small-scale automation like robots or robotic arms. He described these as “retrofits,” as opposed to major system redesigns or new automated storage and retrieval (AS/RS) systems – although there are plenty of those, too, he says.

The labor crunch is hitting the UK and Europe as hard if not harder than the US, says Andrew Scanlon, Head of UK Sales & Marketing at global logistics company (and Staci Americas parent company), Staci. He points out that 500,000 Brits who left the workforce during the pandemic have not returned.

“In order to attract and keep warehouse workers, Staci commits to competitive pay, as well as telemedicine and mental health counseling services that directly support workers’ health and well-being,” says Andrew.

Additionally, Staci is improving job satisfaction by automating menial and repetitive warehouse tasks while adding on more complex services that offer interesting and challenging work – like personalized engraving for one wine and spirits client and inspecting and refurbishing returned products for another.

Trends in Packaging for European B2C Fulfillment

Unsustainable packaging is increasingly getting a bad rap and Europe is leading the way with solutions from the regulation side and the practical side. Rod says European companies are rejecting traditional approaches in packaging.

He says, “Packaging is moving away from the goal of ‘See me! Buy me!’ and toward less bulky packaging that still protects the product but limits the volume of packaging that is thrown away.

“We're seeing a lot of recycled packaging material being used, as well as reusable boxes.”

Staci’s Andrew Scanlon says packaging for its premium brands must pass muster for sustainability. “European consumers are more conscious of packaging and its environmental implications,” he says.

While Europe-based brands are increasingly sustainability conscious, regulation remains a primary trigger for action.

Germany’s VerpackG regulations stipulate that any party responsible for placing packaged products on the market must pay a fee for the recycling of their packaging waste. This fee depends on the type of packaging material and is typically a few cents per kilogram, according to Ecommerce Germany News.

Look to Europe for Inspiration on B2C Fulfillment Practices

Europe continues to be a fertile proving ground for logistics innovation. Don’t be surprised to see some of the ideas we’ve outlined be embraced more broadly in the U.S. in the coming months and years. Now that Staci Americas has gone international with its integration into the Staci fulfillment network, eRetailers are closer than ever to that inspiration.

Talk to the ecommerce fulfillment services specialists at Staci Americas about how you can stay at the cutting edge of fulfillment practices.