Urban Consolidation Centres: from the perspective of suppliers

An Urban Consolidation Centre (UCC) can decrease the number of freight vehicles and their mileage in urban areas. In practice, however, UCCs often rely on subsidies and seldom make it past their starting period. Understanding how UCCs affect urban freight transport is mostly based on mathematical models and on the opinions of stakeholders who do not actually use a UCC.

The purpose of a paper by Anna J. Dreischerf and Paul Buijs is to study empirically how the introduction of a UCC influences the logistics processes, costs, and service levels of suppliers. In a multiple case study, the researchers collected data about the distribution networks of nine suppliers (including their receivers, carriers, and the UCC). Analyses of these data show that introducing a UCC affects the logistics processes of many actors in a distribution network, and these effects differ strongly depending on how the distribution network was structured initially.

A key finding from this study is that the introduction of a UCC does not have a singular effect on the logistics processes, costs, and service levels of suppliers. This effect depends on several factors, such as the existing logistics processes and agreements between the actors in the supply chain. The study provides stakeholders with a balanced view of the role UCCs can play in making urban freight transport more sustainable.

By studying suppliers that recently started using a UCC, the researchers show the importance of suppliers for the success of UCCs. Introducing a UCC has major implications for existing logistics processes involving many different actors, changes the allocation of costs and benefits, and impacts service levels. Driven by competition, suppliers have established distribution networks with efficient logistics processes, or rely on the infrastructure and processes of third-party freight carriers, driving with full vehicles driving into a city for multiple customers.

This makes it hard for a UCC to bring immediate benefits to the supplier, both in terms of costs and service levels. From a sustainability perspective, the use of zero-emission vehicles can distinguish a UCC from other consolidation solutions, as most suppliers and carriers often still rely on fossil fuel vehicles. This is rapidly changing, however, as regulations become increasingly stringent, subsidies for less polluting vehicles abound, and technological developments drive down the costs of zero-emission vehicles. For future research, it will be interesting to study what the introduction of zero-emission zones in cities does to the added value of UCCs for suppliers.

Source: Dreischerf, A. J., & Buijs, P. (2022). How Urban Consolidation Centres affect distribution networks: An empirical investigation from the perspective of suppliers. Case Studies on Transport Policy.

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