Navigating Last-mile Delivery Through Sustainable Initiatives

The rapid growth of the e-commerce sector has led to high demand for last-mile delivery services in Indonesia. Despite the rise in fuel prices due to global disruptions from the Russia-Ukraine war, last-mile delivery providers face challenges in maintaining profitability amidst fierce competition. The industry shows resilience by adopting sustainable initiatives, such as capacity optimization and electric vehicles. Changes in consumer behavior, with a growing environmental awareness, are driving the industry to seek eco-friendly delivery methods. With the adoption of eco-friendly technologies, such as electric vehicles, last-mile delivery providers in Indonesia have the potential to continue growing amidst environmental changes and contemporary demands.

Figure 1. Customer Preferences for Shifting to Sustainability Principles

 The shift in consumer behavior towards greater environmental concern is driving a switch to alternative delivery methods for logistics providers. According to the 2023 MarkPlus Quick Survey, 17.5% of consumers prefer logistics providers focused on environmental issues over those chosen based on quality. The emotional aspect of sustainability is also highlighted, particularly in the 25-35 age group, signaling that sustainability has become an important value in purchasing decisions.

Figure 2. Sustainable Technologies in the Indonesian Logistics Landscape

 Figure 2 visualizes companies from the first-mile to last-mile stages that have adopted sustainable initiatives. These initiatives offer many strategic benefits, improving operational efficiency and having a positive impact on the environment. While most last-mile delivery providers have adopted eco-friendly technologies, only a small percentage of first-mile providers have done so. This disparity is due to several factors. Last-mile providers feel more urgency to meet consumer sustainability expectations and maintain their reputation, whereas first-mile providers may face operational challenges and different priorities, such as scalability and production efficiency. Operational limitations and smaller scale make it easier for last-mile providers to adopt eco-friendly technologies and experiment with sustainable initiatives. In contrast, first-mile providers may require greater effort and investment to implement eco-friendly technologies across their entire production chain.