Research by Urban Freight Lab of Supply Chain Transportation & Logistics Center (University of Washington) revealed a lack of an established and widely accepted definition for the concept of consolidation centers or microhubs. Many recent implementations of urban freight consolidation have focused on bundling goods close to the delivery point by creating logistical platforms in the heart of urban areas to avoid freight vehicles traveling into urban centers with partial loads.
In this project, a delivery microhub (or simply a microhub) was defined as a special case of UCC with closer proximity to the delivery point and serving a smaller range of service area. A microhub is a logistics facility where goods are bundled inside the urban area boundaries, that serves a limited spatial range, and that allows a mode shift to low-emission vehicles or soft transportation modes (e.g., walking or cargo bikes) for last-mile deliveries.
Businesses may implement a variety of operational models to integrate microhubs into their logistics and supply chain operations. When an operational model is chosen, a key consideration is whether the microhub will be used solely for one carrier or designed to allow a mix of multi-carrier consolidation efforts. Various micro-consolidation initiatives that have been implemented in different cities across the world are described. The report illustrates logistics systems with different operational models, where dashed arrows indicate transportation via clean vehicles such as electrically assisted cargo bikes.
Key elements for success
There are several key elements to consider when the potential success of microhub operations is evaluated. Earlier experiences showed that multi-sectoral collaboration is necessary to obtain a working, self-sustaining facility. This includes government contribution, as well as scientific support through research and mediation, in the planning phase. A microhub operates more successfully with support from public authorities to make and enforce environmentally friendly policies.
Frequently, carriers’ interest in the use of urban freight facilities is overestimated during the planning phase. So for multi-carrier consolidation operations, a quantified estimate of the number of potentially participating carriers is crucial at an early stage.
Another important aspect to consider for microhub implementations is the location. The facility should serve areas in the city where delivery activities are difficult because of limited curb space for large vehicles, limited access on streets, and restricted traffic conditions (typically due to pedestrian prioritized planning).
The microhub operations should be implemented in high-demand, high-density areas where high volumes of delivery throughput accumulate in one area. These are necessary to first justify the need for a change in the urban freight system and to later keep microhubs sustainable and efficient during operation.
Also, in cases involving multi-carrier practices, it is crucial to have strong cooperation and trust among partner carriers. To produce even more efficient results, stakeholders need to share a mindset of balancing the city’s economic vitality and environment, build trust among partners, and compromise by having a neutral carrier operate joint delivery systems.