City Logistics

Author: Dr. Jean-Paul Rodrigue

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1. Overview

City Logistics is a relatively new field of investigation brought by the challenges of moving growing quantities of freight within metropolitan areas. It thus concerns urban freight distribution. While cities, particularly since the industrial revolution, have always been important producers and consumers of freight, much of these activities were taking place in proximity to major transport terminals, such as ports and railyards, with limited quantities of freight entering the city per se. The functional specialization of cities, the global division of production as well as increasing standards of living are all correlated with larger quantities of freight coming from, bound to or transiting through urban areas.

City logistics. The process for totally optimizing the logistics and transport activities by private companies in urban areas while considering the traffic environment, the traffic congestion and energy consumption within the framework of a market economy. (Institute of City Logistics)

Simplistically, it concerns the means to achieve freight distribution in urban areas, by improving the efficiency of urban freight transportation, reducing traffic congestion and mitigating environmental impacts.

2. Key Challenges

Addressing city logistics requires an understanding of urban geography as well as supply chain management, which tends to be an uncommon set of skills. Urban freight distribution thus has a unique array of challenges as a multidisciplinary field. By its characteristics, urban freight distribution reflects many dimensions of contemporary logistics and exacerbates many of its constraints. The most prevalent challenges include:

• Commuting and peak hours. Urban areas are a priori the realm of passengers movements since they account for the largest concentrations of population. Passengers and freight movements do not mingle well. Additionally, the well know timing of urban commuting around peak hours complicates freight distribution.
• Congestion. Road infrastructures in urban areas are commonly congested, particularly at peak hours. Repetitiveness is a salient issue as a regular flow of deliveries must be maintained in spite of peak hour congestion, and therefore many freight distribution activities take place during the night if possible.
• Parking. Many stores in high density areas have limited capacity to accommodate deliveries, implying that delivery trucks must park in the street in the vicinity of the store, preferably in front. This induces the usage of smaller trucks better able to circulate within urban areas and find parking space for deliveries. It is not uncommon that for short deliveries that trucks will double park, thus seriously impeding local circulation.
• Cargo load contradiction. Since real estate is at a premium in urban areas, stores tends to have limited warehousing space and are of smaller size. Urban freight distribution is subject to smaller volumes with time-sensitive freight necessary to replenish a constant demand. This requires a high frequency of deliveries, particularly considering high sales volumes and imposes a contradiction in the cargo load. Stores in central areas would benefit from the economies of scale of larger deliveries, but the setting does not permit this advantage. This is one of the reasons why retailing has emerged in suburban areas. Large stores with ample parking space can have their own cargo docking bays that can accommodate the largest delivery trucks available.

Since urban areas are large consumers of final goods, the issue of reverse logistics deserves attention in the form of the collection of wastes and recycling. The diffusion of e-commerce has also created new forms of demands and new forms of urban distribution with a growth in the home deliveries of parcels. From a regulatory perspective urban areas are highly constrained with a variety of rules related to zoning, emissions and even access conditions to road and terminals. High population densities imply a low tolerance for infringements and disturbances, which again increases urban freight distribution costs.

3. Freight Distribution Strategies

City logistics, as a distributional strategy, can take many forms. For instance, a high density and congested central city can be serviced by an independent freight distribution system calling from a terminal located at the margin of the area. The vehicles used to service the customers (either for deliveries or pickups along a flexible route) are likely to be smaller and thus better adapted for distribution in an urban environment. There is also the possibility of using the existing public transit system to move freight but this implies several challenges in terms of the adaptation of modes, the usage of existing passenger terminals and scheduling issues. The urban terminal itself could be a neutral facility interfacing with a set of distribution centers, each being connected to their respective supply chains. Thus, a wide array of supply chains connected to the city can achieve a better distributional efficiency within the central city.