The City Is E-Commerce’s Bottleneck

By Wolfgang Lehmacher, Global Supply Chain Advisor & Former Director, World Economic Forum

As artificial intelligence improves demand forecasting, routing and fulfilment, urban access is becoming the harder constraint. The next advantage in e-commerce will lie in making scarce city assets work better for everyone.

In July 2026, Seoul Metro began allowing passengers to have recovered lost property delivered to their home or workplace through a partnership with CJ Logistics. It is a modest service innovation, not freight by metro. But it points to a larger opportunity: cities can treat stations, depots, data and underused transport capacity as supply-chain assets, not simply passenger infrastructure.

That matters. Artificial intelligence can improve demand sensing, inventory placement, dispatch and routing. Automation can raise warehouse productivity. Electric vehicles can reduce tailpipe emissions. Yet none of these technologies creates a loading bay, secures a city-centre site, gains planning consent or earns public acceptance for more delivery activity near homes and workplaces.

This is the Urban Permission Paradox: as private delivery becomes easier to organise, access to shared urban space becomes more valuable. Every online order eventually needs land, kerb space, loading bays, energy, labour and public consent. The contest in e-commerce is over the right to use those assets.

The real last-mile constraint

The last mile is often presented as a transport problem. It is better understood as an urban-system problem. Goods must enter dense areas, be stored in scarce space and leave through contested streets, stations, collection points and delivery locations. Returns, repair and reuse travel through the same network. The urban supply chain is no longer simply a line from warehouse to home. It is a negotiation with the city.

The kerb is where that negotiation becomes visible. Delivery vans, motorcycles, private cars, buses, cyclists and pedestrians compete for the same limited space. When a vehicle cannot stop legally, the cost does not disappear. It becomes circling, double parking, blocked streets, delayed deliveries and pressure on drivers. This means fewer drops per route, more failed deliveries, greater labour uncertainty and a higher cost per successful stop. Also, it means congestion, noise, safety risks and conflict in the public realm.

The question is not simply how to add delivery capacity. It is how to use assets already inside the city, including stations, depots, lockers, car parks, rooftops and underused public land to move, store or consolidate goods without adding vehicles to already congested roads.

Underground logistics is one possible example. Metro systems may become part of a dual-use distribution network where off-peak capacity exists and operations can protect passenger service, timetables and safety. A 2024 vehicle-routing optimisation study modelled an underground logistics system using three hypothetical hubs on Seoul Subway Line 3: Jichuk, Euljiro 3-ga and Hakyeoul. Across the study’s customer-demand scenarios, the model estimated an average 6 per cent reduction in total transport costs. It is a simulation result, not evidence of a live metro-freight operation; its value lies in showing where rail-linked consolidation could improve urban logistics economics.

Resilience needs options

The same logic applies to resilience. A city reliant on one delivery mode, a few peripheral hubs or a narrow set of roads can appear efficient in normal conditions but become brittle during flooding, heat, labour shortages, cyber incidents or road closures. Resilience does not mean duplicating every asset. It means retaining options: shared collection points, distributed inventory, alternate routes, multiple delivery modes and agreed rights to use them when disruption strikes.

Collection points, flexible fulfilment capacity and alternate delivery modes are not only customer-service features. They are continuity assets. For city authorities, kerb rules, emergency access and shared logistics infrastructure should be designed for disruption as well as everyday operations.

Time matters as much as space. Compressing freight into narrow daytime windows forces vehicles, workers and consumers to compete for the same streets and kerbs. Managed off-peak access can relieve this pressure, but “24/7 delivery” is the wrong objective. The goal should be conditional quiet access.

Night delivery can improve vehicle productivity and reduce peak congestion. It can also impose unacceptable burdens if loading equipment, trolleys, doors and building access are poorly managed. Operators seeking off-peak access should therefore demonstrate low-noise equipment, trained crews, secure handovers, credible complaints channels and safeguards for workers on unsocial shifts.

This is not a constraint on innovation. It is a framework for responsible innovation.

The battle for access

The next question is who controls the interface. It may be a parcel locker, loading-zone booking system, micro-hub, collection point or delivery app. Whoever controls that interface can influence service standards, customer relationships and data flows.

Publicly enabled logistics infrastructure should not create exclusive access advantages for a small group of operators. Large platforms and established carriers already have advantages in capital, property, data and regulatory capacity. Exclusive control of lockers, booking systems or micro-hubs can turn those advantages into durable market power.

Singapore offers a useful alternative. Its nationwide Pick parcel-locker network was designed as an open-access network for logistics providers, merchants and e-commerce marketplaces. Pick presents itself as a neutral operator, while its Locker Alliance model supports interoperability across locker networks.

The aim is not to remove competition. It is to focus competition on delivery quality, reliability, price and customer experience, rather than exclusive control of essential public-facing infrastructure. The practical test is simple: can a smaller carrier, independent retailer or new entrant use the same locker, booking system or micro-hub on fair and transparent terms? If not, infrastructure intended to improve urban efficiency may instead become a barrier to competition.

A market in access

Cities should treat loading space, shared lockers, micro-hubs, charging and delivery-data interfaces as shared urban logistics infrastructure. They need not own every asset, but they should establish clear, workable terms of access.

This does not require municipal micromanagement of delivery operations. Cities should define outcomes and access rules, not prescribe business models. Their role is to ensure that the costs shifted onto streets, residents and drivers become visible in commercial decisions and that smaller actors can participate alongside dominant platforms.

An access regime should reward operators that reduce congestion, emissions, failed deliveries and kerb dwell time; support interoperability; meet quiet-delivery standards; and maintain alternative capacity during disruption. Access should be granted against published commitments, reviewed regularly and renewed, modified or withdrawn through a transparent process.

Seattle’s Belltown pilot shows the operational value of better information. In a controlled University of Washington experiment, delivery drivers using the OpenPark real-time curb-availability application recorded reductions of 27.9 per cent in parking-search time, 12.4 per cent in cruising distance and 16.5 per cent in median trip time.

Better kerb access can mean fewer failed stops, higher route productivity, less unproductive driving and more predictable labour scheduling. Cities experience less congestion and more productive use of limited public space.

A small retailer should not need a compliance department to make a delivery. Cities should favour simple, interoperable systems and transparent, published rules, rather than access determined by negotiation, market power or administrative scale. Without transparent allocation, access is likely to be shaped by congestion, informal workarounds and the resources of the largest operators.

Retailers and platforms also need to make the trade-offs visible at checkout: a premium for narrow-window doorstep delivery, a standard option for flexible delivery, and a discount for collection from a shared locker or neighbourhood point. A rapid doorstep promise is not free. It consumes scarce kerb space, labour, energy and public amenity.

Cities can begin simply: measure kerb use; reserve and price peak access; require interoperability at publicly enabled lockers and hubs; and publish the results. The actors that succeed will not only find faster routes. They will show that their use of urban access creates value for customers, citizens and the wider logistics system.