Designing a sustainable delivery network with parcel locker systems as collection and transfer points

Collection and delivery points, both attended and fully automated, have emerged as a popular solution in last-mile delivery. They offer not only operational advantages for the delivery company but also present a pathway to mitigating the negative environmental impact of parcel delivery operations. In this study, we explore a new approach, where parcel locker systems have a dual role: as collection points for customers and as transfer points for the delivery company. We introduce a variant of the Location-Routing Problem, optimizing the strategic location and capacity size of parcel locker systems as well as the delivery routes from those points. We develop an efficient branch-and-price algorithm and apply it to a real-life case study that focuses on the design of a delivery network with parcel lockers in a residential neighborhood in the city of Groningen, the Netherlands. Our case study findings underscore that the dual role of parcel locker systems considerably reduces the travel distance of delivery vehicles, is well-suited to deal with potential future increase in demand for parcel collection, and reduces the likelihood of customers traveling to parcel locker by car. • Strategic planning for parcel locker systems with dual functionality. • A Location-Routing Problem to decide on location, capacity and delivery routes. • A branch-and-price algorithm to solve the proposed problem. • A real-world case study shows reduced delivery distances and less reliance on cars.