In this paper, we analyze the route

In this paper, we analyze the route efficiency trade-offs that emerge from combining first-mile pickup and last-mile delivery operations in an urban distribution system. We buildon the extant literature on continuum approximation of optimal route distances and pro-pose adjustment factors that account for the effects of integrated pickup and delivery op-erations. By means of comprehensive numerical experiments and regression analysis, wefurther propose a set of closed-form adjustment factors that improve existing continuumapproximation-based route length estimations. These adjustment factors incorporate somenon-trivial route efficiency trade-offs emerging from first-mile and last-mile integrationthat cannot easily be captured through continuum approximation. The proposed exten-sions are particularly relevant for the optimal strategic design and operational planning oflarge-scale, high-density last-mile distribution systems that are gaining in importance inlight of e-commerce and omni-channel retailing. Our analyses suggest that the efficiencygains emerging from integrating first-mile pickup and last-mile delivery operations can beas high as 30%. However, the effective efficiency gains are sensitive to vehicle capacityconstraints and other factors complicating the optimal stop sequence in integrated routes.We apply our proposed method to a real-world case study informed by operational datafrom one of India’s largest e-commerce platforms for the city of Bengaluru. We find thatby properly integrating its first-mile and last-mile operations, the company could reduceits urban traffic and emissions impact by up to 16%, while increasing the asset utilizationand reducing the cost of operations of its vehicle fleet.