City Transport and Logistics

transport planning, the transport intensity could be optimised thereby resulting in increased attractiveness of the city in accordance with the Bertolini-analogy.

forwarding companies that might be damaged if new regulations were introduced (Allen and Browne, 2010.

In the view of this chapter, there are in principle two approaches or models when it comes to implementing urban consolidation centres that, to some extent, have proven to be successful. Of course, there are variations on the models, but the bottom-line when implementing a UCC is normally one of these two. In the following section, the two models are described as two extremes; a large-scale approach and a small-scale approach to implementing an urban consolidation centre.

3.2 Large-Scale Approach

Traditionally when starting an urban consolidation centre, the initiative has often come from municipal authorities or from a freight forwarding company. The reasons for starting and supporting urban consolidation centres often differ between municipalities and companies. Municipalities often seek to reduce the number of transports through an area by increasing delivery vehicle load factors, whereas, large delivery companies try to gain market shares by providing consolidated deliveries from numerous suppliers. From a municipality point of view, the reasons for supporting and starting urban consolidation centres are often environmental, as consolidated goods transports are believed to reduce emissions, and increase accessibility of a particular area. Delivery companies too are seeking to reduce their carbon footprint, but this might be more out of marketing reasons.

We refer to this implementation model as large-scale approach or top-down implementation. Often the large-scale approach to urban consolidation centres is built on sound logistical values, creating efficiency in the operations through good use of warehousing, packaging, and delivery service elements⁷. Capital tie-up and logistics costs are minimised and route planning is used in order ensure the best possible delivery system. Unfortunately, it often focuses on transporters, not really taking the end-users or the market into account.

Many of the schemes have been founded through European Union grants and once the initial pilot phase has ended, a majority of the projects have been disbanded as it has been difficult to reach financial sustainability (Browne, 2005). Commitment has often been at a low level, and responsibility is somewhat shunned due to unclear structures; is the company or the municipality responsible? Concerns have been raised that these top-down implementation models run the risk of becoming biased by favouring certain companies, and thusly would not adhere to the rules of competition.

As mentioned earlier, there is always a certain level of environmental awareness when it comes to city logistics schemes, especially in the cases of municipality initiated consolidation centres. Some reductions in carbon dioxide levels have been reached in most cases, but it is difficult to know whether the reductions are due to the urban consolidation centre or other CO2 reducing measures implemented by municipalities at the same time.

7 These delivery service elements are focus points for logistics service providers and suppliers in order to bring goods to the user in the best possible way. The service elements vary from company to company, but the following gives us a hint of what can be considered as important; delivery lead time, delivery reliability, delivery accuracy, information, flexibility and customer adaptation and lastly stock availability.

(Oskarsson, Aronsson, & Ekdahl, 2006)

123

3.3 Small-Scale Approach

The other extreme when it comes to implementing urban consolidation centres is the small-scale approach. Often a small business owner ⁸, or rather a conglomerate of small business owners, identifies a need for deliveries to be consolidated to their particular area.

The identified need does not necessarily relate directly to environmental issues such as emissions, but rather to relieving the workload of the business owner or to raise the attractiveness of the area. The reduction in emissions that might accompany the consolidation of goods is more of a positive side effect and not the primary goal. This model is referred to as bottom-up implementation as the initiative is taken by the end-users.

This model is not as common as the top-down implementation of urban consolidation schemes, so this process does not figure prominently in current research. One of the more successful examples of UCCs that has grown from a bottom-up initiative is Binnenstadservice⁹ in the Netherlands, which has grown from one person’s active commitment to a multi-location operation in several cities. The objective of Binnenstadservice is to meet the needs of suppliers, transporters, retailers, and consumers, in a socially, economically, and environmentally sustainable way (Binnenstadservice, 2010).

One of the main objectives of the small-scale approach is to relieve small business owners’ workload and increase their sales. By consolidating goods to a single shop from numerous suppliers or from a supplier to numerous shops, or from numerous suppliers to numerous shops, the number of deliveries could be reduced. This would, according to what has been expressed previously in this chapter, raise the attractiveness of that particular shopping area, as this reduction of deliveries would mean that the number of delivery vehicles would decrease as well. This in turn will render the individual shops more attractive to visit, as the shop is not “blocked” by a delivery vehicle and the personnel have more time to attend to prospective customers, thus increasing their sales.

In addition, some value-adding services can be provided to the end-users by small-scale UCCs. These services can be anything from price tagging, removal of packaging materials, postal services to additional warehouse space, or having goods delivered all the way on to the shop floor. In addition, safety and security aspects could be jointly handled by several shops, e.g. splitting costs of expensive electronic solutions like RFID with track & trace features and monitoring. Not least, shops that join the UCC programme would get a reputation of being environmentally friendly. These additional services are of

8 The small businesses mentioned are often shops run by one or a few people, or restaurants located in crowded areas with a high concentration of businesses and passers-by.

9 Binnenstadservice was founded in April 2008 through the initiative of Drs Birgit Hendriks, a shop-owner on a busy street in Nijmegen (NL), a city with approximately 200 000 inhabitants. She was fed up with the amount of delivery vehicles frequenting the area, delivering small consignments to different shops at different times, and as a shop-owner thought that there must be a better way. Together with eleven other shop-owners, she formed Binnenstadservice, a consolidation scheme that could lessen the burden of traffic around their shops, running environmentally friendly delivery vehicles and offering value-adding services.

One year after it was founded, 98 shops in Nijmegen had joined the scheme and two years after the first Binnenstadservice, the concept had spread to six more cities in the Netherlands and the concept was about to be launched in Belgium. The financing of the Binnenstadservice-scheme was threefold; the municipality of Nijmegen supported the scheme, the EU supported the scheme and delivery companies paid for the mileage that they did not have to drive. For the shops, it was free of charge to join, but any additional services that they wanted to use they had to pay for. (Hendriks, 2010)

124

great importance in raising the end-users experience, as they can prove to increase economic gains as well as save time for the shop’s personnel (van Rooijen & Quak, 2009).

As is the case with the large-scale approach, there have also been signs of positive environmental impacts from the small-scale approach to urban consolidation centres, however, the same problem is apparent here; are the reductions measured due to the UCC or some other measures implemented by the municipality? These UCC operations are often small and therefore the impact from them might not be as large as anticipated.

However, a reduction in driven freight kilometres and number of stops made by delivery vehicles has been proven in some of these small-scale cases, for instance the aforementioned Binnenstadservice¹⁰. As one of the aims of the small-scale approach is to increase the attractiveness of a shopping area, this is a desirable outcome, but what happens if one of the businesses grows too large and demands more deliveries? The worst-case scenario is that the entire UCC scheme ends due to a lost member of the consolidation family, depending of course on the size of that member from the beginning.

If this happens, deliveries will go back to how they used to be and the attractiveness will decline once again.

3.4 Proactive or Reactive Approaches to Planning?

In essence, one can say that the large-scale implementation of urban consolidation centres is a proactive approach to dealing with environmental issues, as it is often the case that a municipality wants to limit the impacts of transportation in a certain area before the problem becomes too large. The main concerns in the proactive approach are planning, economic growth, and mobility where planning implies the possibilities that exist to reducing negative impacts on society. Economic growth of course takes into consideration that a municipality cannot run and support a failing business model, especially if it turns out not to be that influential in the reduction of environmental issues.

The mobility in this case must take the infrastructural environment and its limitations into consideration, as this is something that influences operations on a daily basis.

If the large-scale implementation of urban consolidation centres is a proactive approach, then the small-scale implementation can be said to be a reactive approach driven by users in dealing with urban sustainability issues. The need for a UCC is identified by end-users as a solution to a perceived problem; it is a reaction in order to increase their own productivity and efficiency. The key words in the reactive approach are market, city attractiveness, and accessibility. The market sets the rules for what can be done through a simple demand driven function; in this case, there is a demand for a smarter distribution system with increased utilisation of freight delivery vehicles. The result of the reactive approach might well be increased city attractiveness that could lead to an increase in trade. Accessibility in this context is ease of reaching ones shopping destination or activity of interest, taking into account the limitations of urban infrastructure and utilisation.

10 After the first year of operations, the number of driven freight kilometres in the city centre was reduced by 5 per cent and the number of stops made by distribution vehicles was reduced by 7 per cent. The project had also shown a decrease in CO2 emissions, whereas a possible reduction in noise and NO2 levels could not be proven due to the rather small extent of the Binnenstadservice in comparison to the overall traffic situation in Nijmegen. (van Rooijen & Quak, 2009)

125

Neither of these ‘extremes’ exist or could be considered realistic. Of course, a mix of good planning and adaptability – visionary realism – is an ideal approach.¹¹