Logistical Management

6. Logistical Management

The main objective of these strategies is to alter the way deliveries are undertaken to reduce the negative externalities produced. However, these strategies can also improve the efficiency of the last mile delivery journey through appropriate fuel and driver management, reducing empty or low volume journeys and consolidation of delivery trips.

6.1. Cargo Consolidation

Initiative 35: Urban Consolidation Centers

“Urban Consolidation Centers” (UCC) are facilities that seek to reduce freight traffic in a target area by consolidating cargo at a terminal. In theory, carriers that might otherwise make separate trips to the target area with relatively low load factors would instead transfer their loads to a neutral carrier that consolidates the cargo and conducts the last leg of the deliveries. The carriers would pay the UCC operator a fee per delivery made, and save money by not having to make the final leg of the delivery themselves (Holguín-Veras et al., 2008a).

In the 1940s, the PANYNJ implemented be the first modern UCCs, in Manhattan and Newark, though these operations closed down in the 1950s due to lack of carrier participation and union opposition (Doig, 2001; Doig, 2010). More recently, UCCs have been tried in a number of European and Japanese cities in response to government incentives (Taniguchi and Nemoto, 2003; Browne et al., 2005; Panero and Shin, 2011). Most UCCs are small operations that focus on a section of a city, or on individual buildings, such as the Shinjuku UCC in Japan. UCCs can reduce freight traffic, and thus congestion and pollution levels. Nilsson in (Nilsson, 2009) describes the experience of the Swedish Convention Center in 2008, when deliveries destined there were rerouted instead to an outside terminal to be consolidated. The total number of truck trips arriving at the Convention Center dropped from 400/week to 20/week. Significant benefits have been estimated: a reduction in the total distance travelled and thus congestion; improvements in load factors; reductions in greenhouse gas emissions; in conflicts between freight vehicles and other users leading to greater safety; and in curbside occupation time (Tri-State Transportation Commission, 1970; Transport & Travel Research Ltd and Transport Research Laboratory, 2010; Quak and Tavasszy, 2011). The potential benefits of UCCs have led many to recommend them (City Ports, 2005; BESTUFS, 2007; START, 2009; SUGAR, 2011), and it appears that sizable portions of the carrier industry would consider their use. A survey conducted in the NYC area found that 16-18% of carriers would be highly/extremely likely to participate in such a consolidation program (Holguín-Veras et al., 2008a), while a separate survey in California reported an 18% likelihood of participation (Regan and Golob, 2005).

However, UCCs have a mixed success record, since they have struggled to attract a sufficient number of users. Some of the obstacles UCCs face include: competitive pressures that push suppliers away from participation; overall costs that are frequently higher than direct deliveries, once the UCC’s space costs are included (Kawamura and Lu, 2008); and the difficulty of finding enough suitable space for a UCC, in urban areas, where property is, at a premium and often unavailable (Browne et al., 2005; Transport & Travel Research Ltd and Transport Research Laboratory, 2010; van Rooijen and Quak, 2010; Quak and Tavasszy, 2011; Holguín-Veras et al., 2012a). As a consequence, public subsidies are often necessary, and if the subsidies do not materialize, most UCC operations come to an end. However, some analysts believe that UCCs could be financially viable if they attract a meaningful amount of cargo (Transport & Travel Research Ltd and Transport Research Laboratory, 2010). In spite of the challenges, a number of UCCs are in operation (Panero and Shin, 2011). The consensus position in (Browne et al., 2005; Allen et al., 2012), which indicates that a UCC is more likely to be successful when: there is strong public sector support via a regulatory mandate for use of the UCC; significant congestion/pollution problems within the area; other complementary policies(s) are in place, such as penalties for carriers that do not participate.

In major metropolitan areas it may be difficult for some shippers and carriers to acquire enough real estate to properly conduct their operations.  This might be particularly true if a company has grown, and they need to expand.  This problem is even more apparent for large distribution centers that require large plots of land.  In some cases, businesses are forced to operate separate locations nearby, which can lead to congestion because trucks would be forced to travel between the two locations, and contribute additional expenses to the company and in turn to the customer.

A promising concept was pioneered by the Binnenstadservice, a network of UCCs in The Netherlands (van Rooijen and Quak, 2010). The promoters realized early on how critical the support of the receivers would be. Instead of trying to convince carriers to participate, the promoters convinced the receivers to ask their vendors to send deliveries to the UCC, as a way to help the environment (the receivers were promised no increases in delivery rates). Once the receivers committed, the promoters approached the suppliers and offered to conduct the last leg of the deliveries in return for a small fee, which the carriers agreed to pay because it was smaller than their own costs of making the deliveries. Based on the fact that they have expanded to other cities, the Binnenstadservice operations have proved successful. Receivers’ participation could be the key to counteracting market pressures, such as the desire to foster brand recognition that may deter shippers from participating in UCCs.

An important consideration when planning UCCs is related to insurance.  Prior to operation it should be arranged who will be responsible for lost or damaged goods during the process.  In a traditional delivery system it is more straightforward to determine where the damage occurred, but in a UCC where additional layers of handling occur, it is necessary to have a system that assigns responsibility during the various stages of consolidation and delivery.

6.2. Intelligent Transportation Systems (ITS)

ITS could play a key role in increasing the efficiency and reliability of urban distribution (BESTUFS, 2007). Several ITS programs have proven effective (SUGAR, 2011). In Berlin, London and Paris, urban traffic management centers provide route guidance to freight drivers regarding preferred routes, vehicle height and weight restrictions, access and loading regulations, and locations of truck parks. Slot booking systems are used to coordinate truck arrivals at major sites generating large flows and reducing congestion.

Initiative 36: Real-Time Information Systems (RTIS)

To facilitate planning and logistics, responding to traffic changes, the freight sector needs real-time information in terms of 1) road safety (e.g., situational safety, accidents, vertical height information, weather information, road conditions, roadwork zones); 2) reduce congestion (e.g., congestion data, cost information, toll facilities, parking facilities, kiosks at truck stops); 3) regulatory compliance (e.g., road restrictions, limit travel speed, weigh station location); and 4) supply chain information (e.g., loading and unloading information, delays, pickup/delivery notification, pre-notification of truck arrival, real-time container status and gate activity, wait times at intermodal facilities, advanced notice of fees due) (USDOT, 2003; RITA, 2011; Ranaiefar, 2012; USDOT, 2012b; Butler, 2013). An implementation example of this type of initiative is described in the case study for the city of Seattle in Section C.5.

Initiative 37: Vertical Height Detection Systems (VHDS)

Vertical Height Detection Systems – VHDS (also known as Over-Height Vehicle Detection Systems) are ITS implemented to warn truck drivers when their vehicles surpass the maximum height of an upcoming road structure (e.g., bridge, tunnel, sign gantry) (NZ Transport Agency, 2011; International Road Dynamics Inc., 2014). VHDS have a detector with a transmitter (infrared light or visible red light) that is pulsed across the highway to a receiver. If a truck is over-height and it is crossing the location of the VHDS, there will be an interference of the beam, and a warning (audible alarm and/or sign) will be generated to make the driver aware of the hazard ahead. The system provides alternatives (e.g., a sign showing available road exits) to the driver to take an alternate route and avoid crashes into approaching infrastructure (International Road Dynamics Inc., 2014).

The detection systems work well under conditions of normal weather, rain, fog and snow, and they are capable of detecting an over-head truck traveling between low speeds (1 mph) to high speeds (75-100 mph) (Mattingly, 2003; International Road Dynamics Inc., 2014). VHDS have been very effective in reducing damages to structures by over height vehicles. For example, Mattingly (2003) analyzed VHDS in 29 states of the U.S, and found significant reductions in 73% of the states where VHDS were implemented. This type of system has been successfully implemented in London (SUGAR, 2011). For instance, in the Blackwall Tunnel in London, the use of VHDS reduced by 38% the number of over-height incidents (ITS International, 2013). Although vertical height detection systems are often reliable, in some cases false positives (e.g., birds) have produced system failures. This is the case of Pennsylvania, where in a road carrying 6,000 to 12,000 trucks every day, the system fails occasionally and generates in average one collision every two months (Mattingly, 2003).

Initiative 38: Dynamic Routing

The implementation of in-vehicle routing and navigation systems seeks to improve the safety and efficiency of commercial vehicle operations. The public sector’s initial interest was to provide routing guidance, and to implement ITS for commercial operations focused mainly on road safety, congestion reduction and securing efficient regulatory compliance  (BESTUFS, 2007; Wolfe and Troup, 2013). Therefore, most of the systems managed by the public sector guide truck drivers into routes that comply with access regulations, and when Real-Time Information Systems (RTIS) are available they also seek to deviate truck traffic from roads that are already congested. These systems rely on on-board technologies such as vehicle telematics, GPS, and in-cab communication systems for real-time guidance.

In the case of the private sector, in-vehicle routing and navigation systems are often part of a decision-support system to provide truck drivers with a route that minimizes travel costs while complying with customer constraints (Kritzinger et al., 2012). However, the efficiency of these systems and their ability to optimize the route depend heavily on the availability of high quality real-time traffic data provided by RTIS. (Kim et al., 2005) estimated the total cost savings and the reduction in vehicle usage when implementing dynamic routing, using both historical and real-traffic information in Southeast Michigan. The cost savings achieved using historical traffic data and real-time traffic data is about 4% and 7%, respectively, during the peak hours. Additionally, the authors estimate that vehicle usage can be reduced by about 7% during the peak-hours when using historical data; and by about 12% when using real-time data. In the case of Vienna (Austria), the implementation of dynamic routing using historic travel times from GPS installed in taxis could save about 10% of travel time for commercial vehicles (Kritzinger et al., 2012). In the case of Barcelona (Spain), an experimental study estimates that real-time traffic information could reduce travel times by 25% (Grzybowska and Barcelo, 2012). However, the implementation of this initiative requires that the public sector puts in place an infrastructure for RTIS (in the cases where it is still not in place), a communication architecture to provide dynamic travel times, and the investment in fleet management software and equipment from the private sector. Some examples of cities that have implemented this initiative include Berlin (Germany), London (England), Paris (France), and New York (USA) (BESTUFS, 2007; PIARC, 2011).

6.3. Last Mile Delivery Practices

These initiatives seek to improve the final section of the supply chain, where goods are delivered to their ultimate destinations which is often one of the chain’s most expensive components. It is important to mention that to increase the effectiveness of the public sector initiatives; the private sector must also invest efforts on improving their logistics activities. For instance, efforts are needed to optimize the loading of vehicles at the origins as to be able to conduct effective and efficient activities at the destinations. Cargo must be loaded in such a way as to minimize the time required for unloading, reception and verification activities.

Initiative 39: Time Slotting of Pick-Ups and Deliveries at Large Traffic Generators

This initiative reduces the negative impacts of pick-up/deliveries to large traffic generators (LTG) such as government offices, colleges, hospitals, and large buildings housing hundreds of commercial establishments. These properties are often in high-value locations, where space is at a premium, and they tend to have minimal loading and storage space for deliveries. If drivers cannot find space in the loading dock, they often have to double park, or circle around to find a space. Reducing the externalities produced by LTGs is crucial, as they generate a sizable portion of the truck traffic in large cities. In Manhattan, just 56 large buildings generate 4% of the total truck traffic (Jaller et al., 2013). LTGs, and the associated parking and loading/unloading maneuvers around them, generate substantial congestion. Time slotting of deliveries at LTGs provides an opportunity to efficiently use the delivery areas, and avoid these problems.

Initiative 40: Driver Training Programs

These programs seek to change driver behaviors and enhance driver competencies to improve delivery efficiency, energy consumption, environmental impacts and the safety of all road users. Drivers could be trained to drive in eco-friendly ways that save fuel and reduce emissions, or to handle deliveries in a quiet manner so that night deliveries do not disturb neighborhoods (Goevaers, 2011). The training includes presentations, vehicle checks, driving assessment, driver debriefs, demo drives, and knowledge tests. On completion, participants receive written assessments and certificates (Department for Transport, 2007). Experience suggests that driver training programs are a cost-effective approach to improving delivery efficiency. The implementation, however, requires close collaboration between public and private sectors, clearly defined goals, professional instructors, well-organized training materials, and a carefully planned certification program to ensure success.

Initiative 41: Anti-Idling Programs

These programs attempt to reduce the pollution caused by idling trucks. In the U.S., various programs focusing on technologies, economic incentives, regulations, and education have been implemented. One important step toward the reduction of idling is truck-stop electrification, and the five minute limitation on Diesel truck idling implemented across the States (FedEx, 2013).  The U.S. Department of Energy has sponsored research and development to produce new anti-idling technologies. While several implementations have been conducted in the US (Skukowski, 2012), these technologies are unfortunately underutilized, and have not achieved their full potential. The Environmental Protection Agency (EPA) launched the SmartWay Transport Partnership in part to foster use of anti-idling technologies (U.S. Environmental Protection Agency, 2013b). The success of these programs relies on an integrated consideration of regulations, technologies, incentives, public education, and effective stakeholder coordination.

Initiative 42: Pick-up/Delivery to Alternate Locations
These initiatives foster the use of alternate locations for pick-up and deliveries, such as delivery lockers and post offices, as local freight collection and distribution mini-depots (Augereau and Dablanc, 2008). Instead of trucks making the final deliveries, customers travel to the pick-up area to retrieve their goods. These practices are believed to reduce delivery costs and the number of delivery attempts. However, some researchers argue that compared to home deliveries, having customers pick up the orders using their own cars may increase the overall traffic. To be socially beneficial, these alternate locations need to be located at places where customers only need to make short deviations from their daily routines (BESTUFS, 2007).

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