Towards Sustainable Last-Mile Delivery: Introducing an Off-Peak Urban Policy to Mitigate Environmental and Social Impacts

In recent years, last-mile delivery research has shifted from focusing solely on cost minimization to a broader consideration of sustainability and environmental impact. This paper explores the novel trend of evaluating the social impact of last-mile delivery, emphasizing factors such as road safety, congestion, and noise pollution. A key strategy that has garnered attention in addressing these multifaceted concerns is Of-Peak Hours Delivery (OPHD), which involves scheduling deliveries during non-peak hours, often in the evenings or at night. This study investigates implementing a city-wide policy inspired by OPHD, strategically encouraging or discouraging deliveries in specific urban areas and time slots. The objectives of such a policy span from environmental considerations to nuanced social factors, potentially leading to dynamic shifts in time slot preferences. Adopting such a policy aligns with the growing citizen concern for environmental and social issues, leveraging changing attitudes toward sustainable practices. To evaluate this policy, we formalize it as a bi-objective mixed-integer programming model, aiming to strike a balance between the economic interests of retailers and the municipality’s overarching goals. Through realistic instances, the paper offers managerial insights, providing valuable perspectives on the practical effects of the proposed policy on delivery operations. This facilitates a deeper understanding of the ramifications of integrating social considerations into the optimization framework.