University of California Transportation Center

Despite the recent economic downturn, electronic commerce (e-commerce) continues to show strong growth. According to the U.S. Census Bureau, e-commerce retail sales for 2002 reached at $45.6 billion, an increase of 26.9% from 2001, while total retail sales increased 3.1% during the same period. Although e-commerce sales account for only 1.4% of total sales, the digital economy continues to grow, albeit at a slower pace than earlier predicted. The logistical requirements of e-commerce goods may stimulate greater complexity in supply chain management and potentially cause higher costs in carrier fleet operations. It is important to encourage the development of a freight transportation system that will support the steady growth of e-commerce, while avoiding the possible negative effects from the changes in freight transportation. Advances in home delivery have the potential to promote e-commerce as well as to create sustainable urban freight transportation systems. The logistical challenges of home delivery are discussed and potential solution strategies for the issues that will lead to more efficient and reliable home delivery systems are presented in this paper.