Redesigning Zoning Systems for Equitable and Efficient Last-Mile Delivery at Ninja Van

Efficient last-mile logistics is the key underpinning for sustainable e-commerce growth. As the final leg of delivery services, last-mile delivery is a time-consuming and labor-intensive process that requires careful operational planning and execution. In this paper, we describe the development of a novel zoning optimization framework that determines the assignment of customer locations to last-mile delivery stations for Ninja Van, a leading logistics service provider in Southeast Asia, to improve operational efficiency and work equity. The main technical development is a data-driven zoning optimization model that integrates the additively weighted Voronoi diagram and vehicle routing problem through a subgradient algorithm. The algorithm exploits the primal-dual formulation of the partitioning problem and is flexible enough to handle practical delivery scenarios with varying vehicle capacities and travel speeds. To the best of our knowledge, this is the first zoning optimization model that considers general multivehicle zones with uncertain demand, and these are the main contextual features of Ninja Van and many other logistics companies. The zoning algorithm we develop provides preferable theoretical guarantees. The implementation of the new zoning system at Ninja Van led to an average reduction of 6.6% in the work span for the delivery stations and a 3.5% reduction in driver delivery times. In addition to the monetary benefits from the shortened work hours, the new zoning system contributed to improved worker welfare by balancing workloads and limiting overtime. This zoning optimization also brought transparency and valuable insights into the management of delivery stations and drivers at Ninja Van.