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Staying Ahead of the E-commerce Curve

  Published: 26 November 2017
  Theme: Future Economy


Global commerce has undergone rapid transformation over the past decade, with worldwide business-to-consumer (B2C) e-commerce sales growing on average 18.88 per cent annually in the five-year period from 2012 to 2016, hitting US$2.053 trillion in 20161. In Singapore, sales via online channels amounted to US$2.982 billion in 2015, forming the bulk of e-commerce revenue among the six Southeast Asian countries with the highest number of internet users2,3. This revenue is projected to rise to more than US$5 billion by the year 2025 .

To meet the increasing demand in a small city state like Singapore, Singapore Post Limited (SingPost) opened its 553,000-sq ft Regional eCommerce Logistics Hub to process parcels for delivery within Singapore and abroad4. Emerging on the local scene are startups, such as FastFast and Ninja Van, which offer innovative e-commerce delivery solutions connecting retailers with consumers and vice versa5. Open-access infrastructure such as POPStations — an island-wide network of parcel pick-up lockers — has also been enhanced to support e-commerce activity .

While profit-driven innovation and improvements in private infrastructure are enabling continued e-commerce growth, urban planners must take into account the impact of these changes on cities, such as increased traffic on roads.


Delivery vans in Singapore fulfil last mile deliveries. (Photo: Ninja Van)

Mapping the Effects of E-commerce

Lured by the convenience that B2C e-commerce offers, consumers may eventually have every item they need delivered to their doorstep. While this enhances convenience, it may ultimately lead to a significant increase in the volume and frequency of last-mile freight transport on urban roads. In 2012, a European Commission study of 10 European cities — including London, Paris and Barcelona — observed the impact and mix of measures employed by each city6. Additionally, the research team discussed existing measures and planned initiatives with city authorities and other key stakeholders.

The researchers found that B2C orders tend to comprise a small number of items (“often just one”). They also observed “a large flow of returned product”, which entailed major reverse logistics operations. Given these findings, the researchers noted that such patterns are likely to place a strain on urban road capacity — unless a comprehensive approach to land-use planning is synced to consumer behaviour patterns.

In Singapore, a small island with a densely packed population, a lack of response to the effects of e-commerce on the urban environment would be clearly felt. Inefficient logistic sprawl, a surge in freight residential delivery volume and an increase in different modes of delivery vehicles — such as bicycles, scooters and motorcycles — all need to be pre-empted and managed. Otherwise, potential disamenities, such as increased noise levels, parking shortages and peak hour congestion, could result.

Coping with the Increase in E-commerce

To mediate the negative impacts of an increase in urban freight in the context of cities such as Singapore, possible land-use measures might include:

  • Requiring new residential office and retail developments to plan for freight activity, such as dedicating space for an incoming deliveries room, which would enable drivers to make one-stop deliveries instead of having to go door to door
  • Reconfiguring urban spaces such as shopping malls into consolidation centres for last-mile deliveries; for example, in the UK, DHL partners with Westfield Stratford City shopping centre to provide dock management and consolidation services
  • Planning for off-site consolidation centres and retail buildings with integrated distribution facilities

Singapore has already made strides in leveraging malls as proving grounds for technology-driven in-mall distribution. For example, at a neighbourhood shopping centre, delivery truck vehicle parking times were reduced from an average of 24 minutes to seven minutes. This was achieved via various innovative technologies, including a new scheduling and acceptance system that allows companies to book specific delivery timings7.


Consolidated goods using In-Mall Distribution Technology being delivered to the supermarket at a Singapore mall. (Photo: IMDA)

In all instances, urban planners need to work closely with the logistics sector to find out how best to accommodate changing delivery patterns, advises New Soon Tee, Director of Logistics and Retail at Infocomm Media Development Authority. Such partnerships already exist in the US. One example is the Urban Freight Lab in Seattle, where  experts from the Supply Chain Transportation and Logistics Center at the University of Washington have teamed up with private sector delivery companies such as UPS to measure and collate data such as dwell time (how long a delivery vehicle has to remain on the street) and failed deliveries in the city8. Their findings are then incorporated into a city-level urban goods delivery strategy.

The Future of E-Commerce in the Metropolis

Given the myriad challenges, cities will need a multi-pronged approach to address the strains of growing B2C e-commerce. Already, in cities like Singapore, local logistics operators have been creative in terms of local freight, turning to both technology-driven and back-to-basic approaches. For example, SingPost wants to use electric-powered vehicles for neighbourhood-level distribution,  while other companies such as Deliveroo are planning for bicycle-based delivery systems9. A federated locker system is also proposed for residential areas to complement existing parcel lockers in shopping centres and public facilities10. These measures could reduce the volume of urban freight traffic on existing roads.



SingPost trials electric vehicle for postal delivery. (Photo: SingPost)

To optimise use of urban space, predictive research could help planners figure out how best to calibrate the retail mix and determine the location of consolidation facilities based on future demand. Planners could additionally play a supportive role in the development of next-generation technologies such as a centralised resource optimisation platform that frees up city roads by doing the following:

  • Facilitating dynamic routing of deliveries
  • Coordinating vehicle fleets belonging to different logistics companies

A groundbreaking area that urban planners could explore, New suggests, is planning for infrastructure to facilitate the adoption of automated guided vehicles (AGVs)  and drones.  Substituting manually-driven urban freight vehicles with an electric-powered, autonomous means of delivery would not only offer human benefits such as lower greenhouse gas emissions and accident rates but would also overcome the issue of limited manpower versus increasing e-commerce demand.

In summary, numerous possibilities abound. The key question is how planners can plan for urban freight in the long run by addressing the demand for e-commerce from the consumer’s perspective. This has to include analysis of consumer online purchasing habits to devise solutions for consumers to make purchase decisions with more efficient delivery options. If this can be achieved via innovative research, then planners have a greater ability to facilitate e-commerce growth while also improving the quality of life of urban residents.



1. https://www.emarketer.com/Article/Worldwide-Retail-Ecommerce-Sales-Will-Reach-1915-Trillion-This-Year/1014369
2. https://www.statista.com/outlook/243/124/e-commerce/singapore
3. http://www.temasek.com.sg/mediacentre/newsandviews?detailid=24283
4. https://www.singpost.com/about-us/news-releases/singpost-opens-its-new-regional-ecommerce-logistics-hub-scalable-facility-serve-growth-ecommerce-asia-pacific 
5. https://www.techinasia.com/southeast-asia-real-money-logistics-ecommerce 
6. http://ec.europa.eu/transport/sites/transport/files/themes/urban/studies/doc/2012-04-urban-freight-transport.pdf 
7. https://www.imda.gov.sg/about/newsroom/media-releases/2016/launch-of-urban-logistics-technology-roadmap
8. https://www.citylab.com/transportation/2017/04/cities-seek-deliverance-from-the-e-commerce-boom/523671/
9. https://www.singpost.com/about-us/news-releases/singpost-and-tumcreate-launch-trial-electric-vehicle-mail-delivery
10. http://www.channelnewsasia.com/news/singapore/locker-system-for-parcel/2731536.html