Freight Demand/Land Use Management

7. Freight Demand/Land Use Management 

The negative externalities produced by truck traffic are addressed in these strategies by modifying the underlying demand, as opposed to modifying the logistical activities or the vehicle traffic. Two families of strategies are considered: the first seeks to modify the nature of freight demand, the second focuses on land use.

7.1. Demand Management

Initiative 43: Voluntary Off-Hour Delivery Program
To reduce congestion and pollution during daytime hours, this program induces a shift to deliveries made during the off-hours (7PM to 6AM), by providing incentives to receivers for their commitment to accept off-hours deliveries (OHD). This concept is fundamentally different from pricing and regulation strategies. First, its voluntary nature guarantees an increase in economic welfare simply because those businesses that decide to do OHD do so only if it benefits them. Second, it focuses on the receivers as the key decision makers. Although it could be argued that a congestion charge to receivers would also be effective (as in the Pier-Pass Program in California’s Alameda Corridor) there are substantial differences in political acceptability. While the receiver congestion charge is bound to provoke stiff opposition from the business sector, the use of incentives as part of a voluntary participation program will likely engender substantial business support, as the NYC experience clearly demonstrated. The central element of the NYC OHD program is the use of incentives to convince receivers to accept OHD. Once the participation of receivers is secured—since receivers are the ones who will initially oppose the program—the support of suppliers will be forthcoming, given that they stand to gain from the lower costs of OHD. Financial incentives are needed to overcome the market failure that prevents the urban freight system from reaching its most efficient outcome: OHD.
Due to the potentially large reductions in truck travel during regular hours, OHD have been used quite effectively as a demand management measure during special events where crippling congestion could lead to a paralysis of business activity. OHD were identified as one of the key factors in the success of the London Summer Olympics, where urban congestion was kept at a manageable level (Hendy, 2012).
OHD have been the subject of significant research, studying: the effectiveness of incentives and pricing in changing behavior (Holguin-Veras et al., 2007; Holguin-Veras et al., 2008b); the necessary conditions for off-hour deliveries and pricing to succeed; formulations to estimate participation in OHD; market conditions that limit the effectiveness of freight road pricing (Holguin-Veras, 2011); and the impacts of the pilot test conducted in NYC (Holguin-Veras et al., 2011b). The pilot revealed that the provision of a one-time-incentive could lead receivers to agree to receive unassisted OHD. Essentially, for some receivers, there is no need for an ongoing incentive, making it easier for the public sector to implement OHD. Moreover, the research indicates that a willingness to accept unassisted OHD can be influenced by a variety of factors, including the one-time incentive, carrier discount, business support, public recognition, and the availability of trusted vendors (Holguin Veras et al., 2013c). An interesting concept worthy of further study is a self-supported freight demand management system that uses the revenues raised by a small toll surcharge to finance an unassisted OHD program, and other freight-specific enhancements (Holguin-Veras and Aros-Vera, 2013).

CASE STUDY: OFF-HOURS DELIVERIES IN NEW YORK CITY

The New York City (NYC) Off-Hour Delivery (OHD) Program is an example of freight demand management, an emerging field that endeavors to increase the sustainability of freight activity by modifying the nature of the demand that generates freight-vehicle traffic. The OHD project has been implemented through collaboration between the Rensselaer Polytechnic Institute (RPI) and the NYC Department of Transportation (NYCDOT). Freight carriers travel during congested hours (slower trips, higher costs, parking fines, etc.) only because their customers (the receivers of the supplies) demand it. The OHD program exploits this fact by inducing receivers to accept deliveries during the off-hours (7PM to 6AM). Incentives were offered to receivers in exchange for their commitment to accept OHD. A proactive voluntary program, OHD leads to a range of beneficial impacts for congested urban environments: reduced congestion and air pollution; increased economic productivity; and enhanced sustainability and quality of life, with fewer conflicts between freight traffic and passenger vehicles, pedestrians and bicyclists.

The NYC OHD project has gained the support of the private sector, which is cooperating in its implementation. Leading partners include: Manhattan Chamber of Commerce, New York State Motor Truck Association, New Jersey Motor Truck Association, SYSCO, Whole Foods, Wakefern, Duane Reade, Waldorf-Astoria, Beverage Works, among others. More than 200 NYC companies have switched to the off-hours. The project has wide ranging potential impacts on the economy, environment, and the quality of life in urban areas. OHD’s focus is urban deliveries, which dwarf all other freight trips; deliveries to restaurants in Manhattan alone attract and produce more truck trips daily than do the Ports of New York and New Jersey combined. It has been estimated that the OHD program in NYC has produced economic savings of $100-$200/million per year to carriers, shippers and receivers. Given that it could influence large numbers of deliveries, the program could lead to  reductions of: 202.7 metric tons (t)/year of CO; 40t/year of HC; 11.8t/year of NOx; and 69.9 kg/year of PM10 (Holguín-Veras et al., 2011b). By removing the interferences produced by freight deliveries, OHD programs could facilitate the implementation of other sustainability initiatives, such as bus rapid transit systems, bike lanes, and enhanced pedestrian walkways that also need curb space. Most of all, the OHD project has dramatically confirmed the potential of public-private sector and academic cooperation in solving urban congestion.

Two sets of estimates are presented below. The first represents the congestion and pollution savings accrued by all of the regular-hour travelers, as a result of freight deliveries switching to the off-hours. The savings were estimated using the Best Practice Model, the federally approved transportation network model used by the Metropolitan Planning Organization in the NYC area. The second set of estimates represents the pollution impacts accrued by the OHD trucks when they travel in lighter traffic. These estimates provide complementary views of the program’s congestion and pollution impacts.

Congestion and pollution savings accrued by all regular hour travelers

Different levels of pollution savings were estimated based on the percentage of deliveries shifted to the off-hours. For example, if 20.9% of the deliveries in Manhattan were shifted to the off hours, each receiver would be responsible for a reduction of about 551 vehicles miles traveled (VMT), and 195 vehicle hours traveled (VHT), and a reduction in CO of 12 kg. One could obtain an estimate of total congestion and pollution savings by multiplying these numbers by the number of receivers accepting OHD.

Pollution savings accrued by trucks making OHD

Using GPS data collected from the participating companies, the team computed fuel consumption and emissions using the Comprehensive Modal Emission Model (CMEM) (Barth et al., 1996; An et al., 1997; Barth et al., 2000). The results shown here correspond to three key segments of the network that were used in both regular and off-hour deliveries. Given the second-by-second speed profiles, the fuel consumption rate and emissions rates (in terms of CO2, CO, HC, NOx) are estimated by CMEM. The results are shown in Table 1 and Table 2 for fuel consumption and emissions, respectively. The “Difference” row in the two tables shows the improvement of the two measures for off-hours vs. regular hours (negative values indicate reductions).

Table 1: Total Amount of Emission ReductionsT4

Table 2: Emission Reductions per ReceiversT5

It was also found that the average fuel consumption rate and total emission rates during the off-hours are significantly lower than those during regular hours for the same segment. The exception is the fuel consumption for ‘highway segment 1,’ which seems to be anomalous. The differences are generally larger than 20% for highway and toll road segments, and larger than 50% for urban arterial road segments because: (i) traffic is generally much smoother during off-hours than regular hours, leading to reduced fuel consumption and emissions for off-hour deliveries; and (ii) for toll roads and urban arterials, such a smoothing effect is more significant (e.g., vehicles stop less frequently at toll booths or signals), leading to more dramatic reductions of fuel consumption and emissions. The results therefore confirm that OHD do help reduce fuel consumption and emissions during urban freight activities.

Estimates of financial impacts on carriers

Based on the research, one could estimate that for every delivery tour that switched from regular to the off hours carriers save, on average, $212.50 per day or $42,500/year/OHD-tour (assuming 200 days/year).  The parking fines in New York City average about $750/truck-month. Since it is easier for truckers to find legal parking spaces near their delivery locations during off hours, every OHD route that replaces a regular hour route saves about $9,000/year/OHD-tour in parking fines.  Essentially, the total savings to carriers amounts to about $51,500/year/OHD-tour. It is estimated that approximately 40-50 daily delivery tours in Manhattan have been switched to the off hours, equaling a total savings to all participating carriers of over $2,250,000 per year.

The OHD program is sustainable on all fronts. Economically, by removing the market failure (the receivers’ reluctance to accept OHD) that restricts OHD from taking place naturally, the program allows entire supply chains to switch to their most efficient outcome. The ensuing increases in productivity enhance the economic competitiveness of congested urban areas, reducing the cost of doing business for receivers and the carriers. The program allows for lasting, sustainable economic shifts through entire supply chains, and the resultant potential for realizing sustainability goals. The OHD program is a win-win solution that benefits carriers, receivers, and urban communities at all hours, enhancing quality of life, economic development, and environmental sustainability.

Initiative 44: Staggered Work Hours Program
In passenger transport, there is a long history of staggered work hour programs, originally intended to redistribute workers’ demand for public transport. Such programs were considered as early as the 1920s, with formal experiments starting in the 1950s, and increasing interest in the 1960s, 1970s, and the 1980s, though their use has declined over time. A similar concept can be applied to freight demand management by staggering receivers’ delivery hours, which could lead to reductions in truck traffic during peak periods, though this idea has not been pilot tested yet.
Initiative 45: Receiver-Led Delivery Consolidation Program
Delivery consolidation is closely related, yet subtly different from UCCs, as it does not require the use of terminals. The deliveries are often consolidated at one of the shippers’ facilities, rather than at a consolidation center (Nemoto, 1997). At the receiver’s request, one supplier delivers its goods to another supplier, and has the latter make the final delivery to their common customer. Instead of shipping goods separately to their customers, suppliers combine their delivery services and make consolidated shipments. Such practice has been implemented by Transport for London in the form of Delivery Servicing Plans (Transport for London, 2013a) where LTGs, receivers in general, conduct an assessment of their delivery patterns to identify areas that can be improved to mitigate impacts of those deliveries on traffic and the city. Other improvements, such as consolidating purchases to reduce the number of vendors and independent deliveries and delivery time changes to mitigate impacts on peak traffic, could also be considered. The lower the number of deliveries received, the more productive the business becomes without damaging profitability. A pilot test in London led to a reduction of 20% in the total number of deliveries made to a building (Transport for London, 2013c). From the receiver’s perspective, such practice helps save time spent receiving goods, and minimizes interruptions to business. From the suppliers’ perspective, it increases truck load factors, and reduces the number of deliveries and their costs. This could lead to a win-win solution.
Initiative 46: Mode Shift Programs
The aim of a mode shift program is to encourage the use of alternative modes to reduce the number of trucks in the city center. Although appealing to many, this initiative faces major obstacles in urban areas, where finding modal alternatives that effectively compete with trucks is not often possible. However, a number of pilot tests and small implementations suggest that it is possible to induce small changes to mode shifts in niche markets, where conditions allow. The Petite Reine UCC in Rouen, France, which uses electrically assisted tricycles for deliveries, is a successful demonstration project. Truck drivers unload their parcels at the special delivery areas, and the parcels are then loaded onto “cargocycles” for the last leg delivery (SUGAR, 2011). Another example of a mode shift program is the Cargotram in Zurich, Switzerland. A tramway is used to collect goods such as bulky waste and electronic equipment, which are forwarded to the waste collection center in the suburbs (SUGAR, 2011). In the U.S., NYC is evaluating the feasibility of using freight-tricycles as part of the Hazard Analysis and Critical Control Points certified supply chain (Kamga and Conway, 2012b).

7.2. Land Use Policy

The spatial concentration and distribution of economic activities that produce and consume freight—typically referred to as “land use”—plays a large role in freight trip generation. This is a very important and frequently overlooked fact. Although LTGs such as marine ports and truck terminals are considered most often as the key traffic generators, the bulk of urban truck traffic is produced by small establishments in the food and retail sectors. The roughly 6,800 restaurant and drinking establishments in Manhattan produce more truck traffic than the Port Authority of New York and New Jersey, though hardly anyone would list such establishments among the top congestion producers (Jaller et al., 2013). Moreover, more than half of the industry sectors that produce and consume freight as part of their primary activity have constant freight-trip generation that does not depend on business size (Woudsma, 2001; National Cooperative Freight Research Program, 2012). Thus, in proportion to size, small establishments generate proportionally more traffic than large ones. These effects, which are only now beginning to be understood, could have major implications on Smart Growth and other emerging concepts like Complete Streets. Regrettably, these important interconnections have not been studied in depth.
Initiative 47: Relocation of Large Traffic Generators (LTGs)

In considering the relocation of LTGs to improve traffic conditions, misconceptions abound, and the potential for unintended effects is very high. Although it is natural for local communities in close proximity to a LTG to want it relocated on account of the externalities it produces, experience suggests that careful consideration should be given to this initiative’s often unintended impacts. NYC, where the port activity was left to wither in the 1950s, is a dramatic example, as the port’s demise, and the development of the port on the New Jersey side, led to massive amounts of cargo destined to NYC being unloaded in New Jersey. From there, the cargo must be trucked over a handful of congested bridges and tunnels to its final destinations in NYC. Over the decades, the cost of the additional congestion produced by this traffic is likely to reach tens of billions of dollars. In essence, the disappearance of the NYC port opened the door to urban redevelopment, though at a monumental cost to the economy in terms of congestion and pollution.

Moreover, in the last several decades, because of land costs, regulations and traffic conditions, many cities are observing “logistic sprawl”. For example, in (Dablanc and Rakotonarivo, 2010), the locations of the 17 largest companies that provided parcel and express transport service to the city of Paris between 1974 and 2008 were mapped. Over those 35 years, their freight terminals moved from the urban core to the inner suburban ring, and now to the greater metropolitan area. On average, these terminals have moved about six miles away from the center. As a consequence, more than 13,000 tons of CO2 are generated every year (Dablanc and Rakotonarivo, 2010; Dablanc, 2013). Another example that could be cited is the relocation of the South Water Produce Market in Chicago, IL to the Chicago International Produce Market. The original market was constructed when there were horses bringing the produce to market and evolved as trucks were introduced.  Over time, as the trucks grew in size the efficiency of the market worsened.  In an effort to improve conditions, the market was relocated to a brand new, more spacious facility to manage in a more comfortable way the traffic of freight vehicles in the zone[1].  Overall, this relocation was successful in that the efficiency of the trucks has been improved, but there have been some negative consequences such as an unexpected growth in the market due to retailers being able to expand their operations beyond what they were at the South Water Produce Market.

[1] Chicago Produce Marker: http://www.wbez.org/series/curious-city/history-and-mystery-behind-chicago%E2%80%99s-produce-market-107918

Initiative 48: Integrating Freight into Land Use Planning Process

A more proactive approach is to incorporate the consideration of freight in the urban land use planning process. In order to achieve this, it is first important to understand the sources of conflict between freight and other land uses, based on which strategies enabling compatible development can be selected. The NCFRP Report 13 “Freight Facility Location Selection: A Guide for Public Officials”, the NCFRP Report 16 “Preserving and Protecting Freight Infrastructure and Routes,” and the NCFRP Report 24 “Smart Growth and Urban Goods Movement” can all provide helpful guidelines for agencies to achieve the integrated planning(Steele et al., 2011; Christensen Associates et al., 2012; Bassok et al., 2013). Some local authorities have already put it into practice successfully. For example, Chicago DOT accommodates site expansion associated with a rail terminal into the city planning and takes proactive measures to coordinate surrounding land use and the freight infrastructure.

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