« Back to Focus Areas

Commercial Package Delivery through Public Transportation Systems in Rural States

Started: December, 2020 End Date: November, 2021 Project ID #4W8852 Status: Ongoing

Results & Findings

This study provided an opportunity to generate a national estimate of the market potential for last mile package delivery via public transportation in rural areas and on Tribal Lands, and to compile information for rural and Tribal transit agencies interested in pursuing package delivery as a source of revenue. This topic first studied by WTI five years ago in relation to the State of Wyoming (Clouser & Chaudhari, 2017) and was examined in relation to Texas (Edrington et al., 2017; Elgart et al., 2019) and most recently the Boston area (Crepy, 2020). Converging trends regarding increasing demand for package deliveries, declining public transportation revenues, and technological advancements in delivery logistics are converging to support renewed consideration of the potential for mutual benefits for rural and Tribal transit agencies, residents of rural areas and Tribal Lands, and private partners of package delivery partnerships. The results of this study are generally consistent with the emerging consensus from prior research that: 1) package delivery may provide a new, and in some cases significant, source of revenue for transit agencies; 2) residents and delivery customers may benefit from lower costs, reduced pollution and congestion, and greater delivery service choice; 3) parcel carriers may benefit from lower costs, and in the specific case of intercity bus companies increased ridership as well; 4) a variety of factors may pose challenges for successful implementation of these services and require context-specific awareness and adaptation. We reviewed the policy and regulatory contexts, including interpretation of “incidental use” and what is commonly referred to as “the Charter Rule” as well as additional considerations, such as insurance, new training requirements, and safe handling and storage of packages. In addition, we summarized the latest technological developments in package delivery logistics, and found locker-based delivery to be especially promising for transit participation in package delivery. Our empirical estimation of the national market potential indicates that the 23,029,572 non-urbanized area households in the contiguous states may generate an annual package and shipping volume by mail of 875,123,736 pieces. Using a conservative revenue level of $3.30 per package, we estimate this could generate at least $2,887,908,328.80 in total revenue. If rural and Tribal transit agencies could partner to share in at least a small share of this revenue, it could serve as a significant supplemental source. For example, across the contiguous states, 1% of this revenue would represent $28,879,083.29 for rural and Tribal transit agencies. We also compiled information on the counties in which rural and Tribal transit agencies are headquartered and operate, which entailed manual web searches to ascertain all counties in which agencies operate. We also analyzed intercity bus stop locations in relation to rural and Tribal transit agencies, and tabulated by state the number of agencies within 5- and 20-mile buffers. This could serve as the foundation for further market potential estimation, given intercity bus package volume data. Link to Interactive map on external site  https://arcg.is/1SOGSP0

Objective

The purpose of this project is to provide the Small Urban, Rural and Tribal Center on Mobility with additional information and greater understanding of the feasibility of last mile package delivery for commercial entities via public transportation in rural areas.

Abstract

This project will investigate innovative “last mile” package delivery systems and how rural public transportation systems may have a role in the process.  It will include a synthesis of current last mile package delivery practices in public transportation systems in rural states; an analysis of state policies regarding the use of public transportation for package delivery; and an estimate of demand, capacity need, and revenue generation for rural transit systems in regard to last mile package delivery.  This feasibility study will also include recommendations for policy and planning.

Contacts

Files & Documents

Sponsors & Partners

  • U.S. Department of Transportation (USDOT) Sponsor

Part of: Mobility and Public Transportation, Small Urban, Rural and Tribal Center on Mobility (SURTCOM)

Project Tagged In: Rural Transit, package delivery

« Back to Focus Areas