By: Laura Schewel on March 9th, 2016

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Micro Freight – Too Big for Cities to Ignore

Commercial Trucks | Freight

Here at StreetLight, we provide analytics for many projects aimed at analyzing commercial and freight vehicles. We support improved freight demand modeling, analyze internal/external routes, explore how trucks going freight hubs like ports move through cities, etc. See our blog for more use cases.

Micro Freight Moving to Cities

However, I think we, and our clients, are excluding one of the most important components of the modern freight ecosystem in 2016 – What I’ll call small, or "micro", freight. “Micro freight” is the rising swarm of parcel deliveries done in light duty vehicles, of personal vehicles owned by Task Rabbit or UberEATS being used to transport goods to consumers homes and works, of restaurant delivery guys, of bicycle couriers making stops for Postmates, of CSA box deliveries in pick-up trucks, and more. A huge amount of goods is moving through our cities not via Medium/Heavy duty, fleet-owned trucks, not the trunks of our own cars, but in a new category: micro freight.

A Micro Freight Day

To illustrate, let me give an only-slightly enhanced version of a very micro-freight heavy day in the life of San Francisco start-up CEO. Don’t judge me too harshly, please!

Morning

  • 7:30AM – I leave my home in Oakland, after being slightly annoyed at the medium-duty refrigerated truck (owner operated) making beeping noises after dropping off supplies at the local, artisanal ice cream shop on the ground floor of my apartment building. I take BART (the Bay Area subway) to work in San Francisco.
  • 8:00AM – I walk from BART to the office. Since I pass by the a Whole Foods on the way, I pick up yogurt and berries for breakfast on foot.

Lunchtime

  • 12:30PM – I’ve been on the phone all morning and realize it’s not going to stop. So I order a salad delivered from Sprig. My office has a monthly subscription to Sprig, so delivery is free. Sprig hires drivers who stock their (personal) vehicles up with the salads of the day, and hover around office districts like mine waiting for someone to order.

Afternoon

  • 1:15 PM – I realize we have an office birthday party in the afternoon, and I’ve forgotten to get the cake! I go online and order a Postmates courier to go fetch an ice-cream cake from Humphrey Slocombe (another local artisanal ice cream place) to bring to us at 4PM. Delivery is ~$9.
  • 2:12 PM – I get a text confirming that my Good Eggs box of local produce has been delivered to my apartment in Oakland. I gave a flexible window for delivery, so the delivery is free.
  • 3:46 PM – I get an email from my apartment building confirming delivery from Amazon of some books. I share Amazon Prime with my extended family, so delivery was free.
  • 4:15PM – Postmates courier brings the ice cream cake to the office – the delivery was made by a young woman driving (her own car) to make cash while she works on building her career as a photographer. Sometimes we see delivery folks park illegally for a minute in the bus stop in front of our office while running up to the door (not saying the Postmate courier did it!)

Evening

  • 6:00PM – I take BART home to Oakland, after a delicious ice cream cake session.
  • 8:00 PM – I meet my friends for a drink at a local bar (walking from home), which serves Linden Street Beer, brewed locally in Oakland. One of the special brews is only available to bars – like this one – where the kegs can be delivered by bike!
  • 9:45 PM – Go home. Resist artisanal ice cream on the ground floor of my building.

There are a few obvious implications on Mirco Freight:

  1. The “convenience and on-demand economy" in the Bay Area is a bit ridiculous.
  2. Ice cream cake is better than a normal cake.
  3. I caused a lot of goods to move to get to me. And very few of those movements would have been captured by traditional “freight” categories.
  4. Further up in the value chain, much of the goods moved differently because of the way I buy. Good Eggs makes it feasible for ranches and farms from other cities to sell to me in Oakland, leading to smaller refrigerated trucks driving from places like Petaluma to San Francisco (see image 2). Amazon probably sourced my goods via its warehouses south of Oakland, etc.
  5. My delivery folks had an impact on the traffic and the parking around my office and home.
  6. I spent very few dollars directly on these deliveries. Now, for Amazon Prime and Sprig, I pay a fee per month or year for unlimited free delivery (which encourages me to get more of it). And for a lot of the start-up delivery services in the Bay, the free delivery is a way to acquire customers which means I’m really letting the investors in these companies pay.
  7. Even though most of the deliveries were free-ish (for now), this still feels like a trend that has strong potential to be concentrated amongst, and benefit, wealthy folks like me. For example, if I didn’t have a reception desk at my apartment, it might be harder to receive packages throughout the day. Not to mention, there are implications for the heavy contract-worker dominated jobs associated with all these delivery folks. As we move ahead in measuring, modeling, and making policies that affect the Micro-Freight + Macro-Freight world, equity is important to keep in mind alongside climate and other transportation concerns.
  8. Because of all these delivery options, I didn’t drive my car once despite acquiring a lot of goods during the day! Thus, Micro-Freight is also impacting personal driving (see final point as well).
  9. Finally, many of the vehicles that made my deliveries were acting as Personal Vehicles in the morning (say when they went to the gym), then Micro Freight vehicles in the afternoon (say when they delivered our ice cream cake). This is a VERY new type of vehicle for traditional data classification models, and is a real challenge for organizations like StreetLight and our clients who need to measure and model “freight” vehicles and “freight” policy.

Measuring Micro-Freight, and integrating those measurements with models that include personal transportation and Macro-Freight is going to be hard – and it’s very important to do. This trend is very real, and growing. While the Bay Area is ahead of (and perhaps beyond) the curve on this, it’s happening everywhere. (Want to hear about the time I forgot a phone charger on a business trip, and had a Postmates courier deliver a charger from Walgreens to the courtyard of my hotel in Atlanta while I was on a conference call losing battery power?).

Personal and Commerical Mirco Freight

These Micro-Freight vehicles morph between personal and commercial classifications. They sharply affect traffic and parking. They impact up-the-supply-chain movements of heavier duty trucks and locations of warehouses. They may drive down personal driving for shopping and dining out (which in 2009 was about a third of all driving).

A huge list of questions need to be answered about Micro Freight, and big, mobile locational data resources analytics and Metrics, like those we make at StreetLight, are probably necessary to start finding answers. We hope our customers, current and future, agree and we’re looking for partners to start working with on this challenge together.

Image 1: Key places in my Micro Freight day

micro freight

Image 2: Zoom out to other places affected up the supply chain.

micro freight

 

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