First and Last Mile

Walk those extra miles in your employees’ shoes

The toughest mile for today’s corporate employers – and their workforce - may be the first and last.

In this economy, employees are struggling with how to quickly and efficiently get from home to work in the morning and then back home again as they navigate the reverse commute.

First, let’s examine those miles. We often identify ‘last mile’ more closely with package delivery. For online retailers and distributors, getting product from the last distribution point to the customer’s front door can make up more than 50 percent of the total cost of shipping. That’s because the last mile involves multiple stops, with only one or two packages being dropped off each time. The first mile can be a little less onerous for package delivery, but if you can streamline the last mile, make it more efficient, you can potentially save millions. However, last mile challenges go beyond just cost; there’s also the challenge of meeting customer expectations. How can you guarantee two/three hour, or even same day delivery, with increasingly clogged roads and congested cities? 

Here’s why the first and last mile is a problem for employers

All around the country, cities are scrambling to accommodate growing clusters of companies in an ever-expanding economy. In urban areas, like the Bay Area, housing – or lack thereof is a major issue. This is forcing more employees to commute from farther away into the urban core. At the same time, transit infrastructure is expensive to build, requires strong political will and voter support and, once approved takes a long time to deliver. Just look at the proposed high speed rail projects in California and between Dallas/Ft. Worth and Houston, Texas. Often times, the result of infrastructure initiatives is more congestion and longer commutes.

What’s worse, employees can also face ‘first mile’ delays as soon as they leave their homes because even suburban cities struggle with road congestion. Then, there is parking. Just ask commuters from East Bay cities like Walnut Creek, Livermore and Pleasanton how easy it is to find parking at their local BART station. Have you walked that first mile in your employees’ shoes? It can take hours.ou

According to payroll/HR specialist ADP, adding just twenty minutes to an employee’s daily commute has the same negative impact on their job satisfaction as a 19% pay cut. Let’s think about that for a moment: adding just 20 minutes to that $100k-a-year employee’s daily commute has about the same impact on their morale as being told their earning capacity is to be slashed to $81k this year.

Little wonder then, that a quarter of employees surveyed by staffing solutions expert Robert Half say they have left a job because of the length of the commute, citing sickness, stress and general unhappiness. Bay Area employees spend an average of 79 hours in traffic per year. (In Los Angeles and New York City, commuters spend 102 and 91 hours respectively in traffic. Atlanta is fourth most congested at 70 hours and Seattle ninth at just 55 hours.) For most commuters, adding another twenty minutes per day could be the last straw. Sick, unhappy, stressed-out employees are, too often, ex-employees.

With historically low unemployment, the job market is already heavily skewed toward job seekers and job movers. Given their strong views regarding commuting, it’s imperative that employers take the ‘first and last mile’ into consideration when making real estate decisions if they wish to attract and retain Bay Area talent.

Here are some factors to consider when weighing the ‘first and last mile’ 

·      Blue-sky thinking isn’t such a bad thing when making multi million dollar real estate decisions in the disruptive economy. 

Think solely about today’s transit options and needs and you run the risk of being caught flat-footed. Change is happening at a dizzying pace in all aspects of business. Transit is no different. Micro mobility is the new thing. Strategies such as scooter sharing have created a potential gold rush for companies like Bird and Lime, with billion dollar valuations. Scooters as a ‘first and last mile’ alternative have taken hold so fast that many U.S. cities and scooter companies are struggling to cope with road safety and cluttered sidewalks. This has even led to the formation of scooter support companies such as Sweep, which recover, recharge and repair scooters in cities like Washington DC, Denver, Detroit, Los Angeles and Dallas. If you were making a location decision in 2012, scooters probably would not have factored into your decision, right?

Who is to say that futuristic short haul transportation projects like Kitty Hawk’s Cora won’t be the ‘first and last mile’ option of the future? Does your headquarters have a landing pad? Do you even have space for one, just in case?

·      While you are blue-sky thinking, don’t be landlocked.

Before there was mass transit, there was water transit. Ferries continue to be an important form of transit in cities like San Francisco, Seattle, and New York where road congestion into and out of these cities has given new life to ferry systems. In the Bay Area, municipalities like Vallejo have recently added ferry services and Berkeley is considering future service. Even private companies, like Alameda-based biotech Exelixis are getting in on the act. Nor are ferries the only way to travel on water. As ‘first and last mile’ solutions, such as scooters and bike shares, proliferate on land, why shouldn’t the same happen with jet skis, kayaks and motorized paddleboards?

·      Is your location future-proof’?

It’s a worthwhile exercise to consider how your location will fit into the future ‘first and last-mile’ picture, because urban plans do change. Are changes planned for nearby bus routes? Are new public transit options planned, such as San Francisco’s Central Subway, and how will those changes affect the location? If you are located near a rapid transit station now, will you still be in five years with planned changes in the system? How cool and useful would it be to actually provide a Commuter Mobility Score for specific locations, such as buildings, or even cities? Communities like Mountain View are doing their own blue-sky thinking and considering next-gen public transit solutions. Employers need to keep tuned in to where municipalities are going in terms of transit solutions in order to make the best location decisions. 

Does your chosen location have technology-based solutions for ‘first and last mile’ efficiency? In Emeryville, the city and private partners for years have operated the Emery-Go-Round, a free shuttle service connecting employees of the city’s numerous life sciences and other businesses, as well as residents, to the BART system. Riders can utilize an app that provides them with real time bus locations which also alerts them to delays. Once just an attractive perk, shuttles – and the handy technology to track them – are now expected.

AI will supercharge mobility strategies

As the use of Artificial Intelligence (AI) and ‘big data’ becomes more prevalent in cities, mobility strategies could even become supercharged. Ridesharing already dominates downtown mobility in many of the country’s largest cities, but some urban planners envisage autonomous shuttles ferrying commuters on otherwise deserted streets. Of course, this vision has been around since at least the time of Fritz Lang’s Metropolis (1927), but the difference today, that reality is not that far away. In Kansas City, Mo., sensors on streetlights collect data that allows the Public Works Department to predict where potholes might form. Like all technology, it has beta issues, but at the very least the city is thinking outside the box in its approach to mobility, and that’s a big positive for ‘first and last mile’ challenges.    

In fact, anything that can help to reduce ‘first and last mile’ stress is worthwhile because these issues aren’t going away soon. If anything, for cities, and the companies wishing to locate in ever-congested downtown locations, the ‘first and last mile’ is going to continue to be the toughest mile, at least until we all work remotely.

Cities can and must do their part by opening up urban planning to new ideas and fresh solutions, such as broader encouragement of alternative vehicles and reuse and repositioning of existing infrastructure – such as parking garages or old bus stations - for higher and better future use. As Danish architect Jan Gehl correctly points out, it is time to design and build cities for people, not for cars.

At the same time, it’s incumbent upon employers to more effectively address ‘first and last mile’ problems. Too often, real estate decision-making is just a number-crunching exercise. By embracing thought leadership and thinking outside the box when choosing new locations, by being open-minded and adopting new, technology-driven, alternative methods of transit or personal transportation and, by walking the ‘first and last miles’ in their employees’ shoes, employers can make a tangible impact on the community and maximize workforce fulfillment.

About the author:

Rich Branning is a JLL thought leader orchestrating a team of specialists in brokerage, finance, workplace management, construction, global incentives and labor analytics. In his 25+ year career he has advised and represented some of the Bay Area's top high growth global companies, offering creative negotiating strategies with an entrepreneurial point of view on more than 25 million square feet of corporate real estate transactions.

Rich's favorite quote: "As Iron Sharpens Iron, One Person Sharpens Another."

You can reach Rich directly by email at [email protected] or via phone at +1 (650) 480-2188.

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