Stocks & Flows Management

URBAN LOGISTICS: THE LAST MILE

Introduction:

The urban logistics corresponds to the routing of different kinds of flows, in the best conditions, from cities to other cities. In rapidly growing cities and a growing number of people living in these cities urban logistics must increase and improve as well.

This growing number of flows implies a growing number of vehicles in urban areas with all the potential issues that go with it. Congestion, air pollution and noise are negatively impacting traffic safety, quality of life and urban economic competitiveness.
The last mile of a supply chain is one of the reasons bringing all these issues : it is a very difficult problem to apprehend and to solve.
In addition to the heterogeneity of the goods transported, the last mile involves many essential stakeholders such as public authorities, transportation companies and retailers. These stakeholders are not sharing the same interest nor the same objective : As an example, local authorities want to reduce congestion and environmental problems like air and noise pollution, whereas transportation companies and retailers are mainly interested in reducing their cost and improving their profit. Very often this leads to counter-productive decisions.

Examples of the initiatives taken to address the issues:

Different solutions have already been put into practice in order to improve last mile delivery of goods in cities.
These solutions have for objectives to reduce all the problems linked to last mile delivery, like congestion, air pollution and noise.
There are four main categories of solution: - Regulatory and land planning - Infrastructure - Financial incentives - Equipment and technology

Big European cities are applying solutions from these categories, in order to decrease negative impact the last mile delivery has.

As an example, in Paris, Monoprix, a large French distribution group, has re-organized its supply chain moving from road to rail transportation for the incoming goods.
To anticipate a more restrictive regulation for deliveries in urban areas, Monoprix has decided to deliver some of its products by train. Goods are delivered to a rail terminal located in Paris and GNG trucks make the final deliveries to each supermarket.

The Club Déméter in Paris is an association created in 2002 with the main aim to develop new operational procedures to optimize the supply chain while taking into account three aspects of sustainable development that are the economic, social and environmental elements. It is considered as a major actor in sustainable logistics for the French supply chain professionals.
Since their establishment, they dealt with more than thirty cases. Among them, they carried out in 2009 a 6-week experiment with two French supermarkets Carrefour and Casino during which they used silent vehicles, lowered the curb of the sidewalk, modified the handling tools and delivered during the night. Night deliveries allowed Casino to halve the duration of the ride from Auxerre to Paris. Moreover, it allows the use of bigger trucks and thus to increase the volume of the transported goods. However, the workforce costs are higher at night and those deliveries can disturb the neighborhood.

Another example, in Berlin, on the first January 2008, a Low Emission Zone (LEZ) was introduced. It is an access restriction to select small areas and/or roads for transportation vehicles, based on emissions.
This Low Emission Zone is quite big. It covers the heart of the city with 88km2 and one third of inhabitants. Only low-emission vehicles are allowed in this zone, in order to reduce air pollution caused by diesel soot (particulate matter) and nitrogen oxides. Vehicles that want roll in this area must have a green sticker oh the windscreen.

Impact of measures implemented and their cost

Nowadays, more and more Small and Medium Enterprises (especially specialized in food or clothes) use bikes to deliver their products to their customers in big cities. In France, there are around 50 of them. It allows a reduction of sound nuisances, pollution and congestion, a reduction of buying and usage costs, speed deliveries, ease of mobility, but the main disadvantage is that the parcels must have a limited size. Monoprix, for instance, has 33 scooters to deliver big orders to his customers’ place in Paris.
Several companies like DHL and UPS now use electric trucks and vans to deliver in the cities. The usage costs are much lower than for gas-powered trucks but the buying costs are high and those vehicles need a 7-hour recharge.
Besides, some companies are specialized in delivering parcels for other companies, such as Vert Chez Vous which uses bikes or electric Berlingos.

Concerning the infrastructure, the urban distribution centers (UDC) help the organization just before the last mile delivery. They are located at the edge of the cities and collect shipments from the suppliers before sending them to the clients. Thus, the trucks can carry shipments for different clients. This delivery system is called a milk run: round trip in which a supplier distributes goods to several clients. It helps using only full trucks, there is only one ride with an empty truck in the end and is takes much less time to deliver all the clients. Thus, there is a reduction of transport costs, of time delivery and of pollution. However, UDCs require big construction and maintenance costs.

Cities can also reserve dedicated parking spaced for loading and unloading goods from the trucks. This measure is already adopted in many cities and countries and helps avoiding congestion. Some cities are now working on dynamic reservations of parking spots or access to bus lanes, depending on the time of the day.

Urban congestion charges like toll booths are applied by some cities like London to prevent trucks from driving in delimited areas. Reduction of congestion and pollution can be noticed in those areas.
On the other hand, tax deductions or other incentives now exist to encourage districts/cities to install new infrastructures or equipments that would help reduce the impact of deliveries on the environment.