E-commerce has changed the way we shop, but it also means more delivery vans and lorries entering our cities, clogging roads and polluting the air. The sharing economy could help solve the problem, argue David Fernández and Ignacio Magallón from Bax and Company, an innovation consultancy
Ever increasing numbers of vehicles are coming in and out of our cities to deliver goods and services with a severe impact on life and air quality. Freight transport represents a large component of traffic in cities (10-15%) and air pollution. It accounts for up to 25% of carbon dioxide emissions from transport in cities and 30-50% of nitrogen oxide and fine particles. On top of that come the many new challenges for urban logistics. While e-commerce changes the way customers purchase, on-demand instant deliveries lead to more freight vehicle movements with lower fill rates, ultimately reducing the efficiency of transport systems. Solving this problem is not easy and requires new out-of-the-box ideas that combine developing and adapting delivery vehicles with the implementation of horizontal and collaborative business models.
Just as car-sharing and ride-sharing have disrupted traditional models of personal movement, greater sharing of commercial vehicles could prompt a rethink about how logistics operate. Urban Logistics as an on-Demand Service (ULaaDS) brings together logistic service providers to provide a last-mile delivery of goods that suits the consumer and the city. While customers may have specific needs in terms of cost or flexibility, cities want to optimise traffic management and public space use.
Part of the challenge is that setting up an innovative integrated logistics platform means ditching traditional company boundaries. ULaaDS requires a business ecosystem where multiple organisations act in collaboration, including business, city planners and customers.
To move in this direction, we need to introduce a modularity concept. Inspired by sea containers, which when first introduced created significant efficiency gains, the “containerisation” of city logistics breaks with the traditional urban delivery system. Instead of vans picking up parcels at a sorting terminal outside the city, driving to the city centre and spending the day delivering parcels, containerisation introduces standardised and modular load units, such as specific trolley-containers for the last mile. Multiple parcels can be placed inside these containers at the sorting terminal, then picked up by a big vehicle to transport the containers to handover points. Last-mile delivery vehicles then pick up the containers for the final step of the journey.
Such an optimised system would mean better load factors (the ratio of the average load to total vehicle freight capacity) and ultimately reduce the number of delivery vehicles on the road, increasing the efficiency of urban freight transport systems.
The containerised urban last mile model unlocks compatibility and interoperability among different transport systems and modes, making use of shared fleets of vehicles and shared storage spaces.
RYTLE, a start-up in the German city of Bremen, has created an innovative concept, integrating e-cargo bicycles with modular containers and mobile depots, operating under an app-based Internet of Things platform. This platform networks couriers and customers and optimises route scheduling. RYTLE’s holistic concept provides cities with a complete solution to the challenges of city logistics, offering a safe, efficient, environmentally friendly alternative that will reduce traffic, noise and air pollution.
Leveraging these benefits, downsizing delivery vehicles is also possible. The use of light electric vehicles, such as electric cargo bikes, as a complement to traditional vans, brings clear benefits in terms of lower emissions and noise, reduced traffic congestion and public space usage for unloading operations.
Sustainable, transparent and efficient logistics in urban areas
A recent study in London found that a single delivery by an e-cargo bike is twice as fast as an electric van and emits 98% less carbon dioxide. At a broader city level, by replacing as little as 10% of conventional vans and trucks with electric cargo bikes, urban logistics well-to-wheels carbon dioxide emissions can be reduced by up to 20%. Electric delivery bikes are just one example of how important these vehicles could be to reaching a zero-emission Europe.
Collaborative solutions need to be supported by long-lasting cooperative business models. The sharing economy is set to transform city logistics. Start-ups are rushing into freight brokerage platforms to help match shippers and carriers to maximise truckload utilisation, decrease empty miles and accelerate shipping times.
When choosing from a pool of diverse solutions, city authorities and the logistics industry need to ensure that schemes are sustainable and cost-efficient. Collaboration models for sharing infrastructure and assets or networks for shared excess warehouse space are effective ways to achieve optimal use of urban land space and increase load factors.
Integrated people and freight transportation networks
Consolidation schemes, together with the modularisation of load units, create the operational ground for the integration of freight and passenger transportation. The “cargo hitching” concept aims at replicating a principle well-known in long-haul transportation (by air and sea), but which is not yet thoroughly developed at an urban level, where people and freight rarely share services (although they often share the same infrastructure).
There are significant potential gains in the shared use of city infrastructure which could mean new business opportunities as the same transportation needs can be met with fewer vehicles, alleviating traffic and congestion problems. Integrating people and cargo can also contribute to making on-demand transport options more socially acceptable, affordable and accessible for all users.
The evaluation of a cargo hitching pilot project in the Netherlands found that approximately 400 kilometres a day were eliminated. This reduced congestion and decreased carbon dioxide emissions by up to 40% for each parcel, contributing to achieving zero-emission logistic activities.
Strategic city planning for efficient urban logistics
A Sustainable Urban Mobility Plan, designed to satisfy the mobility needs of people and businesses in cities and their surroundings for a better quality of life, can help local authorities create more sustainable and liveable cities. This can be supported by a Sustainable Urban Logistic Plan, a holistic strategy for urban freight that ensures efficient and sustainable logistics operations within urban areas.
Defining such plans requires engaging with multiple stakeholders and looking at different transport operations, logistics activities and requirements, from policy and technical perspectives. This will provide evidence to support decision-making and planning for urban freight logistics.
Bax & Company’s mobility team is available to explore further how cities can be adapted to offer cleaner and better transport.
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