INTRODUCTION

The last-mile delivery companies are seeing growth as they disrupt their business model by allowing users to order products online and receive them at their doorstep. But how can this future remain sustainable? The “last mile delivery” model refers to the transportation of goods from distribution centers to businesses or individuals (the “consumers”). The supply chain used by a last-mile delivery company can be the determining factor in your choice for the next delivery: can a delivery company use sustainable logistics to drive down its carbon footprint, reduce CO2 emissions and save costs? In this study, you will find out how last-mile delivery companies are transforming their business model to have a sustainable future and deliver into a bright new European market (de Marco, 2018).

Due to numerous market risks and possibilities, strategic delivery has been one of the most difficult challenges for last-mile delivery companies (LMDC). This research examines LMDC-related studies to identify current issues and future opportunities for the LMDC service industry. In this research, Last-Mile Delivery Companies will be reviewed, to generate solutions for the ultimate objective of creating a sharing economy for cargo transportation Last-mile delivery companies have grown recently. Their sustainable future looks very different from how it does today and there is not a single country that does not depend on last-mile delivery companies. This study finds out how can last-mile delivery companies have a sustainable future? It also finds out how these companies can be avoided disrupting their business model?

The shift in consumer and business’ buying habits and the rapid expansion of e-commerce globally have led to the rise of the Last-Mile Delivery companies, which own an inventory of goods and are responsible for shipping these goods to customers. From 11.9 billion dollars in 2021 to nearly 85 billion dollars in 2030, the autonomous last-mile delivery industry is predicted to increase to nearly 85 billion dollars (Statista, 2022). With Business models maturing in the US, Europe and Asia are still at early stages, with a significant opportunity for innovation. The owners of the traditional European retail network have been driving innovation successfully and will continue to do so. New players will find it hard to become dominant. For this reason, incumbents, grow through the acquisition of start-ups, or through alliances with e-commerce companies, who could provide them with short delivery routes within city centers and allow customers to pick up their deliveries at local stores. With the innovations in the last mile logistics, companies started to experience a paradigm shift- traditional logistics organizations started to employ the last mile delivery companies which have the agility and flexibility that comes with online distribution. This has been the major growth driver in this market and will continue till 2022 (Melkonyan, 2020).

The e-commerce market continues to grow and a number of the major players are so successful that they are already well ahead of their expectations. However, some companies have difficulties with growth and profitability. Understanding the various factors that make one company more successful than another is a way to opportunity. For the sustainable future of last-mile delivery companies in Europe, some key success factors should be analyzed. The shift towards online shopping is, due to years of low growth and cost decreases, structural not cyclical and is expected to continue over the medium term. The delivery of small parcels is an exciting and fast-growing market. The study presents a concise overview of the European market for last-mile delivery companies and their business models.

The European delivery market is a key sector of the economy. From the tracking of parcel and parcel contents to an assessment of courier performance — every aspect of the industry is business-critical. However, many established businesses are showing their age with resellers on high-cost margins, budgets that rarely match demand, and long-standing legacy systems. Startups face a difficult task selling into an established market with well-funded competitors. In addition to the delivery services they offer, last-mile delivery companies (also known as local parcel carriers) are called upon by consumers to deliver personal items such as handbags, shoes, or clothes from online shopping purchases. Therefore, the last-mile delivery service must ensure brand protection when its workers deliver items in bad condition or damaged by the employees handling them at the personal level (Zook, 2004).

The Asia-Pacific region, on the other hand, is observed to grow at a rapid pace during the forecast period (2018–2023). Businesses operating in Europe will see rapid growth of business opportunities in the years to come, including new services, higher profitability, and market share.

The main reasons for this trend are:

(1) Western European GDPs are expanding.

(2) European consumer spending power has increased.

(3) Goods in Europe are mainly still produced in Western Europe.

Data source

In this study of the LAST MILE DELIVERY COMPANIES Business model, our main focus will be to delineate the key success factors in Europe, plus some predictions on future development. We find prevalent records of last-mile delivery companies in Europe and find out the sustainable future of these companies. The record is based on a complete data source compendium, which shows past and present performance, with statistical forecasts for future developments. It’s also combined with some detailed analyses of the market structure and prospects for investment in this sector.

Study objectives

By predicting same-day delivery services from a distribution center to customer site throughout Europe under dynamic market conditions and comparing the results to those of a traditional dedicated fleet of delivery drivers. This research contributes to a nascent understanding of how Last-mile delivery companies perform in terms of logistics effectiveness. The data are reviewed to identify how Last-mile delivery companies might use key success factors and sustainable future for their businesses to gain a strategic advantage. A study plan is presented to further investigate these strategic implications and gain a better understanding of the Last-mile delivery company’s phenomenon.

Problem statements

Last-Mile Delivery Companies are facing a challenge of rapid growth while they look to profit and expand their market share in Europe. Several factors are influencing the growth that is likely to continue, including rising e-commerce, improving connectivity through digitalization and digitization, advances in technology, and heightened consumer expectations. The greatest opportunities have been identified in the automotive sector, where demand has been increasing rapidly because of vehicle leasing to young customers. There is a shortage of small cash transfer companies offering microloans to business owners in emerging markets. A combination of this problem and upcoming changes in government regulation will make it a challenge for large institutions to operate cost-effectively

This study sets out the problem statement of Last-Mile Delivery Companies Strategic Business Model in Europe, consisting of the historical background and macro overview of the market. The study was followed by a thorough presentation of data on operations, competitors, and financial analysis. The general problem the potential LAST MILE DELIVERY COMPANIES could face is the Business Model strategies, Pricing, and Regulatory Framework. What are the best Business Model strategies of the Last-Mile Delivery Companies that could lead to key success factors business model in Europe?

Practical Implications of the Problem

The problem lies in the fact that customers dislike the traditional last-mile delivery company’s business model. It is expensive, slow, and unreliable. Customers are more and more asking for something better. Last-Mile Delivery Companies are a feasible business model. In Europe, the drivers are (often) professional and their fleet vehicles are high quality and reliable. Owners of the delivery companies invest in experience, training, and ongoing education. The market wants professional drivers, not people driving part-time or temporarily: these types of drivers are less reliable and do not create an added value in the service they deliver. The customers want to stick to well-known brands from local shops: confidence has a big value in this market.

There is a lack of small finance companies offering microloans to small business owners. In combination with the upcoming changes in government regulation, it will make the large institutions operate in emerging markets inefficiently. Due to a combination of a lack of competition and the looming impact of new government regulations, large financial institutions will be unable to operate in microfinance marketplaces. “There are currently a large number of companies offering small loans to businesses, but large institutions like banks have trouble operating this way. This could change soon though due to upcoming government regulations.”

Study importance

This study will greatly contribute to the knowledge and understanding about the development of sustainable logistic services for last-mile delivery companies. The analysis and discussion presented in this study will determine how the following six areas need to transform or be transformed by the last-mile delivery companies if they want a sustainable future:

(1) governance and support;

(2) business model, technology, and operational systems;

(3) communities;

(4) transparency, accountability, and trust;

(5) investment strategy;

(6) Performance awareness.

The main purpose of this research is to cover the most important success factors for a successful and profitable Last-Mile Delivery Companies Strategies in Europe. There is a huge growing demand for personalized last-mile delivery. No customer wants to wait 2–3 days for receiving the parcel. So, this market demand will create new ways of delivering parcels, which will be innovative and inexpensive to execute. The main goal of the Last-Mile Delivery Companies research is to evaluate last-mile delivery companies as a framework to understand their readiness on the changing customer expectations and technology advances in Europe.

Deliveries account for, on an annual basis, over half of the total revenue and profits of delivery companies. These are made up of both urgent and time-critical time-sensitive parcel deliveries, such as e-commerce orders, and regular daily or weekly customer orders. This is a significant market that is estimated to be over 1 trillion Euros annually in Europe alone. (Bovet, 2000). As a result of the internet boom and e-commerce penetration, the European market has been struggling with order fulfillment problems. Ensuring the smooth processing of last-mile deliveries is not an easy job at all.

Only a deep understanding of customers’ needs together with consistent work on improving logistics processes will help a company to reach the highest standards of service quality and customer satisfaction. With more than 100 million people living in Europe and an increasingly busy lifestyle, last-mile delivery services are sure to be a success in this region as well. Currently, the number of delivery services is growing at a rapid pace. In Europe, Last-Mile Delivery companies are one of the fastest-growing market segments both at an international and local level. A study by Frost & Sullivan showed that there are already over 500 such services covering tens of European cities and employing a total of more than 60,000 people.

Research Question

v How can last-mile delivery companies have a sustainable future? And how to avoid the risk factors that disrupt their business model?

DESIGN/METHODOLOGY/APPROACH

The method is based on a literature review and qualitative analysis of research conducted between 2018 and 2021, which included many national and international business model strategies and initiatives.

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