Project description

E-commerce is increasing around the world. In the US, e-commerce is increasing about 11% annually, much greater than the rate of total retail sales, (3-4%), and the market share is now 15%1 The global market share is estimated to be 20% in 2021 and valued at nearly $5 trillion.2 The emergence of online shopping has transformed where and how goods are produced, distributed, and sold, and how consumers make shopping as well as shopping travel decisions. E-commerce is changing rapidly. The variety of goods available continues to grow, and many new products have emerged, such as ingredients and instructions for home-prepared meals (e.g. Blue Apron) and subscription deliveries of frequently used products. Speed of delivery is also increasing. Large online retailers offer ‘instant deliveries’ (within two hours) in cities, and one-day delivery is now routine in many metropolitan areas. More recent changes include prepared food deliveries from industrial kitchens and the emergence of individual deliveries by cars (Uber Eats) or bicycle (Grub hub). The growth of e-commerce has impacts on both transportation and urban form. First, freight flows become increasingly fragmented as more retail products are delivered to individuals rather than retail stores, delivery times shrink, and more products get delivered as individual shipments. Fragmentation increases vehicle miles traveled (VMT). Increased VMT in turn generates more congestion, air pollution, and energy consumption. Second, to fulfill short delivery times, retailers must be as close to customers as possible. In-city warehouse and distribution space is therefore in high demand, but land prices and other constraints limit the size and number of facilities. The supply chain has responded with more complex distribution networks: large facilities in less urbanized areas serving as hubs for in-city distribution.