WHEN DO PARCEL LOCKERS PAY? A COST-TO-SERVE MILP FOR TWO-WHEELER LAST-MILE DELIVERY IN MUMBAI
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Abstract
Research on last-mile delivery has often focused on new technologies, while the financial impact of failed first delivery attempts and the cost of each successfully delivered parcel receives much less attention. This study reviews the research landscape and examines when redirecting customers to parcel lockers can reduce the cost of serving deliveries made by two-wheeler fleets.
Design/methodology/approach – We reviewed 75 journal articles published from 2015 to 2025 using OpenAlex and the required “operations AND research” terms, then checked 1,086 records for research gaps using keyword-based searches. We also developed a mixed-integer linear programming model (MILP) that extends the capacitated vehicle routing problem by including locker assignments, expected failed-delivery costs and penalties for deferring deliveries. The model was solved with CBC using Mumbai delivery instances and road distances from OpenStreetMap.
Findings – Drones feature in 31% of the screened articles, but failed deliveries appear in just 1.1% and cost per parcel in only 0.5% of the broader set of records. Compared with nearest-neighbour routing, exact routing lowered daily costs by 4.9–8.2%. Locker diversion contributed a further saving of up to 1.9% and was chosen only when a failed attempt cost at least INR 90 or the customer incentive was no more than INR 5. Driver wages had the greatest effect on cost per parcel.
Originality – The study connects a bibliometric review of research gaps with a reproducible MILP, translating routing choices into unit economics for a two-wheeler delivery fleet in an emerging-market city.
Practical implications – In a congested city where wages are relatively low, lockers make financial sense mainly when the full cost of a failed delivery is high, not simply because they improve route efficiency.
Keywords: last-mile delivery; vehicle routing; mixed-integer linear programming; parcel lockers; failed deliveries; bibliometric analysis
Design/methodology/approach – We reviewed 75 journal articles published from 2015 to 2025 using OpenAlex and the required “operations AND research” terms, then checked 1,086 records for research gaps using keyword-based searches. We also developed a mixed-integer linear programming model (MILP) that extends the capacitated vehicle routing problem by including locker assignments, expected failed-delivery costs and penalties for deferring deliveries. The model was solved with CBC using Mumbai delivery instances and road distances from OpenStreetMap.
Findings – Drones feature in 31% of the screened articles, but failed deliveries appear in just 1.1% and cost per parcel in only 0.5% of the broader set of records. Compared with nearest-neighbour routing, exact routing lowered daily costs by 4.9–8.2%. Locker diversion contributed a further saving of up to 1.9% and was chosen only when a failed attempt cost at least INR 90 or the customer incentive was no more than INR 5. Driver wages had the greatest effect on cost per parcel.
Originality – The study connects a bibliometric review of research gaps with a reproducible MILP, translating routing choices into unit economics for a two-wheeler delivery fleet in an emerging-market city.
Practical implications – In a congested city where wages are relatively low, lockers make financial sense mainly when the full cost of a failed delivery is high, not simply because they improve route efficiency.
Keywords: last-mile delivery; vehicle routing; mixed-integer linear programming; parcel lockers; failed deliveries; bibliometric analysis
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PUBLICATION DETAILS
Review Type:
Double-Blind Peer Review
License:
CC BY-NC 4.0
Volume/Issue:
Volume 02, Issue 10
Review Rounds:
2
Article Type:
Research Article
Publication Date:
Oct 15 2026
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Kundu, P., Vazir, R., Singhi, N., Sunely, A. & Varia, K. (2026). When Do Parcel Lockers Pay? A Cost-To-Serve MILP For Two-Wheeler Last-Mile Delivery in Mumbai. International Journal of Science, Strategic Management and Technology, 02(10), 1-9. https://doi.org/10.55041/ijsmt.v2i10.074
Kundu, Pritish, et al.. "When Do Parcel Lockers Pay? A Cost-To-Serve MILP For Two-Wheeler Last-Mile Delivery in Mumbai." International Journal of Science, Strategic Management and Technology, vol. 02, no. 10, 2026, pp. 1-9. doi:https://doi.org/10.55041/ijsmt.v2i10.074.
Kundu, Pritish,Rohan Vazir,Neev Singhi,Ali Sunely, and Karan Varia. "When Do Parcel Lockers Pay? A Cost-To-Serve MILP For Two-Wheeler Last-Mile Delivery in Mumbai." International Journal of Science, Strategic Management and Technology 02, no. 10 (2026): 1-9. https://doi.org/https://doi.org/10.55041/ijsmt.v2i10.074.
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Cook, W., Held, S., & Helsgaun, K. (2024). Constrained Local Search for Last-Mile Routing.
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Dantzig, G. B., & Ramser, J. H. (1959). The Truck Dispatching Problem. Management Science, 6(1), 80–91. https://doi.org/10.1287/mnsc.6.1.80
Donthu, N., Kumar, S., & Pattnaik, D. (2020). Forty-five years of Journal of Business Research: A bibliometric analysis. Journal of Business Research, 109, 1–14. https://doi.org/10.1016/j.jbusres.2019.10.039
Donthu, N., Kumar, S., Mukherjee, D., Pandey, N., & Lim, W. M. (2021). How to conduct a bibliometric analysis: An overview and guidelines. Journal of Business Research, 133, 285–
Ascent HR. (2025). Minimum wages effective from July 2025 [Summary of Government of Maharashtra notification]. Retrieved October 8, 2026, from https://ascent-hr.com/notification/minimum-wages-effective-from-july-2025/
BikeDekho. (2026). Honda Activa 110 on-road price in September. Retrieved October 8, 2026, from https://www.bikedekho.com/news/honda-activa-110-on-road-price-in-september-20383
Blondel, V. D., Guillaume, J. L., Lambiotte, R., & Lefebvre, E. (2008). Fast unfolding of com-munities in large networks. Journal of Statistical Mechanics: Theory and Experiment, 2008(10), P10008. https://doi.org/10.1088/1742-5468/2008/10/P10008
Boysen, N., Fedtke, S., & Schwerdfeger, S. (2021). Last-mile delivery concepts: a survey from an operational research perspective. OR Spectrum, 43(1), 1–58. https://doi.org/10.1007/s00291-020-00607-8
Callon, M., Courtial, J. P., & Laville, F. (1991). Co-word analysis as a tool for describing the network of interactions between basic and technological research: The case of polymer chemsitry. Scientometrics, 22(1), 155–205. https://doi.org/10.1007/BF02019280
Cheng, C., Adulyasak, Y., & Rousseau, L. M. (2020). Drone routing with energy function: Formulation and exact algorithm. Transportation Research Part B: Methodological, 139, 364–387. https://doi.org/10.1016/j.trb.2020.06.011
Chu, H., Zhang, W., Bai, P., & Chen, Y. (2023). Data-driven optimization for last-mile delivery.
Complex & Intelligent Systems, 9(3), 2271–2284. https://doi.org/10.1007/s40747-021-00293-1
Cobo, M., López-Herrera, A., Herrera-Viedma, E., & Herrera, F. (2011). An approach for detect-ing, quantifying, and visualizing the evolution of a research field: A practical application to the Fuzzy Sets Theory field. Journal of Informetrics, 5(1), 146–166. https://doi.org/10.1016/j.joi.2010.10.002
Cook, W., Held, S., & Helsgaun, K. (2024). Constrained Local Search for Last-Mile Routing.
Transportation Science, 58(1), 12–26. https://doi.org/10.1287/trsc.2022.1185
Dantzig, G. B., & Ramser, J. H. (1959). The Truck Dispatching Problem. Management Science, 6(1), 80–91. https://doi.org/10.1287/mnsc.6.1.80
Donthu, N., Kumar, S., & Pattnaik, D. (2020). Forty-five years of Journal of Business Research: A bibliometric analysis. Journal of Business Research, 109, 1–14. https://doi.org/10.1016/j.jbusres.2019.10.039
Donthu, N., Kumar, S., Mukherjee, D., Pandey, N., & Lim, W. M. (2021). How to conduct a bibliometric analysis: An overview and guidelines. Journal of Business Research, 133, 285–
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