Urban Logistics offers unique tailor-made solutions for the transport of goods in cities by consolidating & rationalizing the existing logistics platforms and creating innovative solutions for the future through the use of information and communication technologies.
Over the past two decades delivering goods into cities has become a challenge with cities getting overly congested and traffic jams resulting in expensive logistics bottlenecks. Studies show that the cost of congestion now in terms of time wasted in traffic and fuel consumption is off the roof, almost 200% more than what it was in the 1980s. Pollution, lack of parking bays, and warehousing costs are all restraints that are contributing to the economic cost of urban logistics.
This presentation, part of a class work of Erwan Le Roc'h, Antony Zouzout and Rémi Philippe at ESSEC will explore the possibilities and ideal mix for this kind of project.
2. Agenda
• What is Urban logistics ?
• The key segments
• Connectivity and Convergence
• Consumption Evolution
• Challenges
• Infrastructure
• Transport
• Solutions
• Infrastructure
• Transport
• Wrap up
3. What is Urban Logistics?
• Urban Logistics offers unique tailor-made solutions for the
transport of goods in cities by consolidating & rationalizing the
existing logistics platforms and creating innovative solutions for
the future through the use of information and communication
technologies.
• Over the past two decades delivering goods into cities has
become a challenge with cities getting overly congested and
traffic jams resulting in expensive logistics bottlenecks. Studies
show that the cost of congestion now in terms of time wasted in
traffic and fuel consumption is off the roof, almost 200% more
than what it was in the 1980s. Pollution, lack of parking
bays, and warehousing costs are all restraints that are
contributing to the economic cost of urban logistics.
5. Connectivity and Convergence
• Before deliveries, the main task is that of order picking and
processing which in the future will be highly automated. For
example, the Kiva warehouses in the US use small orange
robots that can pretty much pick and move products in a
warehouse on their own 4 times faster than a human resulting
in much more efficient and optimised order processing. In
fact, Amazon very recently acquired it in March 2012.
• During the delivery, route planning and scheduling will become
imperative. Through geofencing and location based tracking
they can ensure that the trip is going along as planned and in
cases of unexpected disruptions or change in plans they could
use on-board vehicle telematics to have the delivery moved
around. For Example, DHL Smart Trucks is an “intelligent” pick-
up and delivery vehicle that computes the ideal sequence for
shipments depending on delivery time and uses GPS to find
optimum routes.
7. By 2025…
• There will be 35 Mega Cities worldwide, each one demanding
unique City logistics solutions.
• 3 out of 5 people to live in cities.
• Today an average city inhabitants from a developed city
generates about 0.1 deliveries per day, and if we were to
assume the same ratio for 2025, we are looking at a minimum
of 500 million deliveries per day to cities by 2025.
• People will have Omni channel touch points to suppliers and
will order goods from anywhere at any time demanding it be
delivered quickly. Logistics must offer spontaneous 'on-the-
move' deliveries like that. Technology, in that sense, will
become more proactive than reactive.
8. New consumption ways
Development of online sales :
• By 2025, 20% of retail will happen through
online channels.
• By 2025, each person will have a minimum of
five connected devices.
Consumption growth :
• Cities are more productive than rural areas and
incomes are higher.
• Customers expect to be delivered
anywhere, anyhow, faster and quicker.
Online Sales
Non-Online Sales
$11.8
Trillion
$11.25
Trillion
$0.55
Trillion
5%
95%
2011
$23
Trillion
$18.7
Trillion
$4.3
Trillion
19%
81%
2025
9. Emerging retail model
• Demand for urban parcel deliveries will increase
• Shipments will become smaller and more frequent
Inventory
Visibility
Cold
Supply
Chain
Services
Multiple
Delivery
Options
Smaller
Shipments
Ecommerce pressures on the supply chain
Frequent
Deliveries
Department
Stores
Supermarkets Hypermarkets Online Mobile
Payments
Mobile Apps
Bricks (pre-2000) +Advent of Clicks (post-2000)
11. A worldwide urbanization
Key figures :
• 800 cities with greater than one million inhabitants in 2012.
• 51% of world’s population living in cities, while 55% is expected by 2050
• Within the countries members of OECD, the urban population was 50% of
the total population in 1950, was 77% in 2000, and should reach the 85%
mark by 2020 (OECD, 2003)
• 500 millions deliveries per day to cities
which leads to high demand in resources
• Road capacity demand in cities is projected to increase by a factor of four in the
next 40 years while in most cases space and funding are missing
• By 2025, globally over $800 billion will be spent on high speed rail projects
• Challenge already existing in mega cities (ie. water demand in Mumbai equates to
135 liters per person per day, while the supply network delivers only around 90
liters)
13. Stakeholders’ expectations & interests
• Any policy measures put in place to improve the distribution of
urban freight, should take into account the interactions between the
stakeholders and their interests
Stakeholders Interests
Resident/customers Products & services at home on time
Negative environmental impact
Retailer Competitiveness and profitability
Authorities & Public Service Governance and legislation
Negative environmental impact
Shippers Market growth and profitability
Services providers Accessibility, congestion, cost effectiveness
15. A traffic growth and…
• Delivery by light delivery truck is the norm
in many city centers
• On major arteries, trucks may make up 25-
30 percent of all traffic during the workday.
• Parking and unloading in the streets also
takes up space
As a consequence, in many large
cities, road speeds during daytime
hours (7 a.m. to 7 p.m.) already have
fallen by 50-65 percent in the past 10
years.
Co-operation needed between people
involved in delivering and those receiving
the goods
16. … its major negative impacts
• Social and public health
• Impact on the well-being of a nation by decreasing the quality of life of citizens and
through detrimental effects on health
• Economical
• Time delays caused by congestion increase travel times, inventory carrying costs
and transportation costs
A lively and accessible city center is vital to trade and culture
growth, which leads to a necessity to use city logistics as a tool in
optimizing the use of limited city space, reducing congestion and
improving the economic efficiency of cities
• Ecological
• Pollution (in China 1% of city inhabitants
breathe air that is “safe” by European
standards
• Noise
• Fossil fuel use
18. Urban Consolidation Centers (UCC)
• Move from N single company platforms to one common platform
• Built outside the main city, close to major freight arteries
• Cross docking only (can have a 24h stock for quick replenishment)
• Breaking, re-palletting or cage delivery may be considered
• Attractive cost compared to building a new lane (when possible)
• Load optimization, today trucks are loaded around 35 to 50% capacity
20km lane on existing
road
Cross-docking facility and
consolidated deliveries
Initial Investment USD 30 million USD 5 million
Km/h Impact +12 +8
Investment to Increase
speed by 1 km/h
USD 2.5 million USD 0.6 million
20. UCC – Major Questions
• Who owns the facility and the trucks?
• Full / partial city ownership
• Cost sharing between users (similar to the telecom market)
• What is the impact on small truck providers?
• Small truck providers would need to be the first movers in those
facilities, otherwise this may jeopardize their chances of surviving.
21. Locker Box
• Avoid “milk run” type delivery and absent people
• Open 24/7
• Can also be used for return
• Adapted to end users - Limited usage for Business delivery
22. Night Time Delivery
• Delivery at night time (between 10pm and midnight)
• Delivered directly to businesses (super markets), can also be
delivered to warehouse for early morning delivery
• Experimented in the city of Barcelona
• Well accepted, only 0.3 db extra noise
• 7 trucks replaced by 2 larger ones
• Pros
• Doesn’t disturb traffic or parking
• Avoid extra traffic in day time
• Reduced number of trucks
• Cons
• Requires modified trucks (to reduce noise)
• Increased cost due to outside business hours work
• Complementary to UCC
24. EV Trucks
• With UCC’s the distances for delivery trucks fall under 100
km round trip making EV truck relevant
• Trucks can recharge will loading / unloading
• Decrease CO2 emissions by 35 – 45% (source Oliver
Wyman)
25. High Speed Rail
• To make next day or same deliveries we need an option
that is fast and not as fuel expensive as air - high speed
rail.
• Such services is already operated by
• La Poste in France, which owns around 3 TGV trains.
• Eurocarex Project is a high speed train that will run from Lyon in
France to St. Pancras International Station in London carrying only
freight.
• High speed trials are mainly between countries, but there
are high speed rail plans being proposed connecting
continents. Considering the increasing fuel costs in air-
road mix and the restrictions being imposed on night-time
flights, high speed rail appears to be a much reliable and
viable model indeed.
26. Tram-Fret
• In urban area, many commercial surfaces are in a 500m
range from a Tram line
• Doesn’t impact passenger traffic
• Requires “break outs” for unloading
Paris Tram – Red dots represent commercial surfaces of more than
300 sqm
Dresden (Germany) Tram Fret
27. Tram-Fret – Paris Case End to End
• Paris is evaluating the possibility of using Tram Fret and
UCC
• Last mile can by handled by Micro Trains or bicycles
28. Micro Trains (EV)
Cargohopper Utrecht (Netherlands)
• Ideal for city center or car-free zones
• Experimented as a link between UCC and city center hub
• Bicycles used from there
29. Bicycle (and others)
• Experimentation in Cambrige
(outspoken delivery)
• From 0.22 cbm to 1.39 cbm
• Last mile delivery
31. Key Takeaways
• Being able to make spontaneous and quick deliveries will become a
key decisive factor for delivering into cities, especially with the
increasing pressures being placed by the growing market of online
retail on the urban supply chain.
• Systems are a key part of the End to End solution. IEEE has started
drafting a standard to permit easy interfacing between logistic solution
providers.
• Lobbying, partnership and collaboration between stakeholders will
become mandatory in the urban context.
• There is no homogenous strategy for urban logistics as each city
represents a different picture in spatial pattern, infrastructure and
urban setting. Nevertheless, as emphasized earlier, each city will look
at unique and customized options for their metropolitan and will be
more proactively involved with private logistics providers at mitigating
risks associated with urban freight distribution.
• UCC are the key to all urban logistics models, the transport is then
adjusted based on city requirements and available infrastructures.
32. Solution
• Hub & Spoke combined
with EV’s and night delivery
is the best solution
• Increase average speed of
30 – 40%
• Decrease CO2 emissions
by 35 – 45%
33. Conclusion
• There is not “one fits them all” solution
• All models are based on UCC with EV (whatever kind of
vehicle)
• Train, Tram, Bicycle, Boat etc… is really dependent on the city
• Success factors
• Municipality implication and regulation
• Standardization of “systems” communication for tracability
• Questions
• What is the place of local logistics providers in this model?
• Should the EVs and the UCC be owned by the city?
• If yes, should it be a lease to a prime logistics provider?
36. Reactive Proactive
Telematics
Intelligent
Transport
Systems
Social Media
Integration
2010
Sensors and
Terrain
Mapping
Traffic
Predicting
Software
Real-time is Too Late…
2015
2020
2025
Headlight
Steering, Lane Change
advice, Adaptive cruise
control…
Green routing, Engine
input/output
configuration for hybrid
vehicles
Link with city street
cameras
Internet, Social
Networking, Audio /
Video downloads…
Future Proactive
Technology
Services
37. References – Part #1
• Norden – Safe Urban Logistics
• City Logistics for sustainability – Evangelos Maroudas – Tsakyrellis
• B2CITY – The next wave of urban logisitics – Oliver Wyman
• The city logistics for urban freight transportation – Michael Taylor
• Costs and benefits of logistics pooling for urban freight distribution -
Jesus Gonzalez-Feliu
• Distripolis a new city logistics solution in Paris – ELTIS
• Delivering to the Cities of Tomorrow Global Mega Trends and Impact on
Future of Urban Logistics – Frost & Sullivan
• Tram fret project – APUR
• Urban freight transport and logistics – European Comission
• Impacts of Information and Communication Technology on Urban
Logistics System – Nemoto / Visser / Yoshimoto
• Design of the Urban Public Logistics Information Platform – IEEE
• Smart city logistics – Volvo – DHL – Orange
• Urban Distribution Centres in Utrecht – City of Utrecht
