Urban logistics requires collaboration

There is both international and national political pressures to green urban cities towards zero-emission freight logistics and last-mile delivery. It is important to recognise that there are no one-size-fits-all solutions, but different pathways to achieve zero-emission over time. The biggest stumbling block is that it requires collaboration between key stakeholders to make this transition successful. It cannot be achieved solely through a top-down government decision to go fully electric by 2030. Collaboration between key stakeholders needs quick wins and local success stories to move forward along the zero-emission pathway.

The Role of Logistics Service Providers

Logistics service providers are at least three times more efficient compared to using own transport, as they can better: consolidate different cargos to the city; use distribution centres; transport larger volumes in more efficient vehicles; and organise return cargo. They also facilitate indirect collaboration among different and sometimes competing supply chains. This is particularly important as brand owners have traditionally focused on vertical collaboration (collaboration within their own supply chain) and are not keen to collaborate directly with competing supply chains. Direct collaboration is an issue for many brand owners as they are afraid that sensitive corporate information, trade secrets, and product knowledge might leak to competitors. On the other hand, basic storage and transportation sharing via a logistics service provider could be less of an issue when there are clear financial and carbon footprint benefits.

Furthermore, logistics service providers will be key partners in solving the urban logistics puzzle and in orchestrating freight flows to, from, and within cities. Instead of manufacturers, traders, and retailers using their own cargo trucks, logistics service providers can ensure high utilisation of trucks and return loads. It is advisable that cities should not be served by shippers’ own trucks, but only by logistics service providers.

The Role of the Government

The government needs to support urban logistics initiatives, facilitate the development of the necessary urban logistics infrastructure, and regulate the entry of freight vehicles into the city.

The government should promote urban logistics initiatives by bringing the right stakeholders together and creating incentives, a pull factor, to collaborate on urban logistics projects. Local governments could, for example, sponsor pilots with electric vehicle deliveries to hotels, restaurants and café/catering (HORECA) and award those participating outlets with a green city hallmark. This would create public awareness of a city’s green initiative and highlight those HORECA outlets supporting sustainability and a green city environment.

There are opportunities for urban consolidation centres near the city to consolidate deliveries for the city centre and switch to better vehicles for entering the city. These urban consolidation centres can act like command and control centres, similar to an airport control tower, to better organise city deliveries and waste flows. The government can make land or facilities available for this purpose.

Cleaner vehicles are also important for city deliveries, preferably using bio-gas, bio-diesel, hydrogen, or electricity. However, in developing countries, a first step is often needed: banning old diesel trucks from entering the urban area.

Going fully electric for freight logistics is challenging. First, not all categories of electric freight vehicles are available, or they come at a very high cost. Second, electric infrastructure in most cities is still lacking to support this transformation on a large scale and at a high cost. Therefore, biofuels and hydrogen trucks are more likely to have a bigger share in future efficient and sustainable urban freight transport.

The First Steps in Better Organising Urban City Freight Flows

The biggest freight flows in cities generally include construction, HORECA, and waste. It makes sense to focus on these largest freight flows first to make a significant impact.

As urban logistics projects in the UK and several other countries show, construction in the city could benefit from an urban logistics consolidation centre at the city’s outskirts. This stock point would better orchestrate construction movements into the city and waste from construction projects. Transport to and from construction sites with cleaner vehicles directly contributes to a cleaner and safer city environment.

HORECA is characterised by a high number of small deliveries and low truck utilisation, which can be better consolidated by logistics service providers instead of producers and traders. An urban logistics consolidation centre could also benefit HORECA supplies delivered by a limited number of logistics service providers that can consolidate HORECA deliveries for the city. Governments could facilitate this through licencing to a limited number of logistics consortia. This initiative should go hand-in-hand with standardisation of load carriers, such as crates and trolleys, to boost efficiency at the urban consolidation centre and in its last-mile distribution.

Waste flows are substantial and consist not only of waste destined for landfills or recycling but also food products that are near expiry. These food products could be processed in a central kitchen into ready-to-cook or ready-to-eat meals, cakes, fruit juices, and more. After processing, these value-added products can be distributed back into the city to retail, HORECA, food stalls and other such outets or distribution points. Used coffee grounds are perfect for growing mushrooms. Hence, collecting used coffee grounds from HORECA is another valuable waste stream to supply to mushroom farms in or near the city. There are several more examples of using “waste” flows as input for other organisations. I call this concept in my latest book “economies of chains,” where supply chain expertise is needed to identify ecologically fitting supply chains to create value and contribute to truly sustainable supply chains.

I believe there are massive opportunities in reshaping urban logistics and rethinking urban supply chains and freight flows to, from, and within cities. This is what urban logistics is all about.

Conclusion

The journey towards achieving zero-emission urban logistics is multifaceted and demands the concerted efforts of multiple stakeholders. Logistics service providers play a crucial role in consolidating and efficiently managing urban freight flows, while governments must foster an environment conducive to collaboration and innovation. By focusing on the largest freight flows such as construction, HORECA, and waste, and by promoting cleaner vehicle technologies and urban consolidation centres, cities can make significant strides toward greener logistics.

The implementation of urban logistics initiatives is not without its challenges, particularly in developing infrastructure and overcoming initial costs. However, by leveraging the strengths of logistics service providers, creating incentives for collaboration, and adopting incremental changes, cities can pave the way for more sustainable and efficient urban freight systems.

Ultimately, successful urban logistics hinges on the ability to adapt and innovate, ensuring that each step taken today lays the foundation for a zero-emission pathway. The future of urban logistics lies in our ability to collaborate, innovate, and continuously improve, setting the stage for a greener and more sustainable urban environment.

This article was published in the LogiSYM Magazine of September 2024.