A Framework For Risk Assessment Of Last Mile Delivery

Abstract

The remarkable explosion of e-commerce has marked the latest years of different industries around the world and put forward a higher requirement for the last mile delivery. The last mile delivery is one of the most complex, costly, and inefficient processes along the entire logistics fulfillment chain in an e-commerce context. Its corresponding risks are major contributors to delivery failure. This study proposes a comprehensive framework on risk identification and analysis in the last mile delivery to support the delivery planning. Risks will be deduced from available literature and others will be induced through semi-structured interviews with experts in the field. This study adopts Bayesian Belief Network (BBN) to identify the interdependency among risks and rank them, as the conventional ranking methods fail to take interdependency into account. The results of this study indicate that privacy concerns risk, IT risks, and natural disasters risk were ranked the top three with risk exposures of 0.1055, 0.1009, and 0.1002, respectively. This study will aid logistics service providers to ultimately decide the solutions of last mile delivery that need to be utilized by prioritizing last mile delivery possible risks to increase their competitiveness, increase their market share, and minimize delivery costs.