A new study involving researchers from four Southeast Asian countries has revealed that last-mile delivery (LMD) is the largest contributor to emissions and costs in the logistics sector − a segment still largely untouched by electrification due to financial, regulatory, and industry-readiness challenges.

The findings were presented at public discussion “Urban Logistics in Southeast Asia: Country Perspective on Greening the Last Mile” hosted by the Institute for Transportation and Development Policy (ITDP) and Clean Mobility Collective Southeast Asia (CMC SEA) at Pos Bloc, Jakarta, on Sunday, August 10, 2025.

Rapid e-commerce growth, fueled by better internet access, widespread smartphone use, and improved electronic payment systems, has driven a surge in LMD services. However, this boom comes with steep challenges − higher carbon emissions, worsening traffic congestion, and labor shortages.

LMD accounts for 53 percent of total delivery costs, requiring high accuracy and tight timeframes that add to its complexity. Its carbon footprint is also growing rapidly. According to Google’s e-Conomy SEA 2022 report, CO₂e emissions from transportation, food delivery, and e-commerce reached an estimated six million tons in 2022 − a figure projected to soar to 20 million tons by 2030.

In Southeast Asia, motorcycles dominate LMD fleets thanks to their affordability and ability to navigate dense cities. This reliance exacerbates urban challenges, including air pollution, congestion, and public health risks.

Anggie Hapsari, Program Development Associate at ITDP Indonesia and one of the report’s authors, noted that in Indonesia, 60 percent of logistics activities are handled by motorcycles, with couriers traveling 60–80 kilometers daily. In Vietnam, 70 percent of LMD fleets use motorcycles, with emissions projected to exceed 1.2 million tons of CO₂e per day by 2025.

While some logistics companies have begun shifting to electric vehicles and low-emission strategies, adoption remains uneven due to limited policy support, weak regulations, and financial barriers − particularly for small and local operators. The sector often receives less attention than passenger transport, despite its significant urban impact.

Lai Nguyen Huy, Research Specialist at the Asian Institute of Technology in Thailand, said the LMD sector faces structural challenges, from a lack of government planning to insufficient cross-sector collaboration.

“Our study shows that two- and three-wheeled LMD vehicles are still absent from government transport plans in many developing countries, with limited emissions data available,” he said, while emphasizing the need for stronger cooperation between governments, the private sector, and companies.

Nguyen Thi Phuong Nhung, Citizen Science Program Coordinator at Live & Learn Vietnam, highlighted the role of fleet ownership in shaping local LMD patterns.

“Our study shows a similar business model across the four countries, where delivery motorcycles are typically owned directly by couriers,” she said, questioning whether couriers could afford electric vehicles if a 100 percent EV target were set, and whether governments or companies would offer purchase incentives.

Anggie added that several Indonesian delivery companies have already begun shifting to greener models, with the government mandating a transition to sustainable practices within the next 1.5 years.

“In the Philippines, the government takes a different approach by requiring companies to report their ESG performance − something Indonesia could also consider,” she noted.

Maria Golda P. Hilario, Director for Urban Development at the Institute for Climate and Sustainable Cities (ICSC), stressed the need for collective action.

“We need everyone to be involved, because every action counts and everyone has a role. The faster we work efficiently, pursue greener solutions, and implement them, the greater our chances of success,” she said.