Recipient-Dependent Last-Mile Delivery Routing with Autonomous Vehicle Applications

Last-mile delivery contributes to a drastic 28% of the total cost of shipping. Recent technological advancements enable recipients to participate in these deliveries, relieving the cost of this final leg of the supply chain. We present models of recipient-dependent routing policies in last-mile logistics. The policies are not limited to but are motivated by the future applications of autonomous vehicles in smart cities and their role in enabling recipient-dependent deliveries as they relinquish the need for drivers. The policies are based on scenarios where recipients use their AVs to pick up from (i) a central depot, (ii) a hub located by the logistics firm close to them (hybrid), and (iii) a hub and deliver to other nearby recipients (crowdsourcing). We compare the policies with status quo truck delivery and investigate the potential cost savings. The analysis shows a robust dominance space pattern against key operational parameters. In particular, (i) status quo truck routing is the currently preferred delivery policy, (ii) the hybrid and crowdsourcing policies are a combination of AV and status quo truck policies in terms of dominance space, and (iii) recipient-dependent routing policies dominate the status quo truck policy as the number of recipients increases. We validate the insights from the stylized model with a case study of Walmart in Toronto.