Maritime Infrastructure Engineering and Management Program, Rutgers University, April 2006

Freight and the City: An Overview of Urban Freight Distribution and City Logistics

Dr. Jean-Paul RodrigueDept. of Economics & GeographyHofstra UniversityHempstead, NY

http://people.hofstra.edu/faculty/jean-paul_rodrigue/

Urban Freight Transportation: The Realm of the “Last Mile”

■ Contemporary Urbanization■ A New Environment for Freight Distribution■ City Logistics and Urban Freight Distribution

Contradictions between Passengers and Freight Transport

Inte

nsity

Distance

Passengers

CommutingShoppingRecreation

BusinessTourism

Migration

Waste disposalLocal distribution

TradeEnergy & Raw Materials

Commodity Chains

Freight

Urban Transportation

Passengers and Freight Movements by Time of the Day: Contradictions

0

2

4

6

8

10

12

141A

M

2AM

3AM

4AM

5AM

6AM

7AM

8AM

9AM

10A

M

11A

M

12PM 1P

M

2PM

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4PM

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6PM

7PM

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9PM

10PM

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12A

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%

FreightPassengers

Freight and the City

■ For freight, cities have three major dimensions• Cities are zones of production:

• Industrial location.• Cities are transport nodes:

• Accumulation of transport terminals.• Intermediary locations.

• Cities are zones of consumption:• Problem of urban distribution.

■ Dislocation between those functions• Notably between production, distribution and consumption.• Brought by globalization, global production networks and efficient

freight transport systems (increasingly by logistics).

World Cities

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1st tier2nd tier3rd tier

New YorkChicago

Los Angeles

London

ParisMilan

Frankfurt

Hong Kong

Tokyo

Singapore

Seoul

Moscow

TorontoSan Francisco

Mexico City

Sao Paulo

Madrid

Brussels

Geneva

Sydney

Traffic at the 50 Largest Container Ports, 2003

DubaiJeddah

Tacoma

Colombo

Salalah

Oakland

San Juan

Melbourne

Long Beach Charleston

Nhava Sheva

Los Angeles Hampton RoadsNew York/New Jersey

Kobe

Osaka

Tokyo

BusanNagoya

Dalian

Ningbo

Manila

Xiamen

Tianjin

Keelung

Quingdao

ShanghaiShenzhen

Kaohsiung

Hong Kong

Guangzhou

Singapore

Port Kalang

Laem Chabang

Tanjung Perak

Tanjung Priok

Tanjung Pelepas

Less than 2 million TEU

2 to 4 million TEU

4 to 7 million TEU

7 to 10 million TEU

More than 10 million TEU

Genoa

Piraeus

LeHavreAntwerp

Hamburg

Valencia

Barcelona

Algeciras

Rotterdam

Felixstowe

Gioia Tauro

Pacific Asia Europe

Key Issues in Urban Freight Transportation

Issue Challenge

Increasing volume of freight moving in urban areas

Capacity of urban freight transport systems

Changes in the nature of freight distribution Smaller volumes and time-sensitive freight

Repetitiveness Many urban activities (retail, groceries and catering) require daily deliveries

Environmental issues Growing demand for reverse logistic flows (waste and recycling)

Emergence of e-commerce Growth in home deliveries

Congestion Lower driving speeds and frequent disruptions (reliability)

Regulation Emissions, access and zoning

Changes in the Urban Spatial Structure

Core activities

Central activities

Peripheral activities

Central area

Major transport axis

Nodal Multi-Nodal

Road Highway Activity center Transit lineI II

III IV

Possible Urban Movement Patterns

Monocentric Polycentric

Org

an

ized

Dis

org

an

ized

Primary flow Secondary flow

Transportation Network

Spatial Interactions

Land Use

Components of the Transportation / Land Use System

• Traffic assignment models• Transport capacity

• Economic base theory• Location theory• Traffic generation and attraction models

• Spatial interaction models• Distance decay parameters• Modal split

Urban Transport: Assets versus Liabilities

■ Assets (Freight Transport)• Privately owned (profit

motivated).• Relatively low entry costs (wages

and rates subject to market forces).

• Value added function (trade distance for cost).

• Support industrial, manufacturing and commercial activities.

■ Liabilities (Public Transit)• Publicly owned (politically

motivated).• Little or no competition permitted

(wages and fares regulated).• Social function / “public service”

(provides accessibility and social equity).

• Limited relationships with economic activities.

Globalization, Commodification and Urbanization

■ Longer supply chains• International division of the

production.• Fragmentation of production,

distribution and consumption.■ International trade

• Imbalanced freight flows.■ Higher levels of consumption

• Growing incomes (challenged)• Debt and equity extraction.

Factor Growth (1993-2002)

Retail goods sales 61.8%

Value of freight shipments 45.3%

Gross Domestic Product 33.9%

Ton-miles of freight 23.8%

Tons of freight 18.4%

Population 10.8%

From Push to Pull Logistics

Supplier Supplier Supplier

Manufacturer

Customer

Distributor

Supplier Supplier Supplier Supplier

Supplier Supplier Supplier

Manufacturer

Distributor

Customer

3PL

Returns / Recycling Point-of-sale data

Freight flow

Push Pull

Logistics and E-commerce

Retailer

Supply chain

E-Retailer

Customers Customers

Supply chain

Warehousing

Warehousing

Tra

dit

ion

al Log

isti

cs

E-L

og

istic

s

City Logistics and Urban Freight Distribution

■ City Logistics• Relatively new field.• “The process for totally optimizing the logistics and transport

activities by private companies in urban areas while considering the traffic environment, the traffic congestion and energy consumption within the framework of a market economy.”

• Means to achieve freight distribution in urban areas.• Improve:

• Efficiency of urban freight transportation.• Reduce traffic congestion.• Mitigate environmental impacts.

City Logistics

Urban

Ter

min

al

DC

Freight Corridors & Freight Clusters

■ Geographical consequences• Migrating to more affordable locations

in the periphery.• Growth in tons-km.• Competition between passengers

(commuters) and freight traffic.■ Freight corridors

• Expands the sphere of distribution.• Providing an axis along which

distribution centers can reliably service many locations along the corridor.

■ Emergence of freight clusters• Functionally unrelated distribution

facilities.• Often located in small intermediary

locations.

DC

Large-scale Distribution Center

Size Larger More throughput and less warehousing.

Facility One storeySeparate loading and unloading bays

Sorting efficiency.

Land Large lot Parking space for trucks.Space for expansion.

Accessibility Proximity to highways Constant movements (pick-up and deliveries) in small batches.Access to corridors and markets.

Market Regional / National Less than 48 hours service window.

IT Integration Sort parcels.Control movements from receiving docks to shipping docks.Management systems controlling transactions.

UPS National Freight Distribution Center, Chicago

Cross-Docking Distribution Center

Suppliers

Customers

Receiving

Shipping

Sorting

Distribution Center Before Cross-Docking

LTL

Suppliers

Customers

After Cross-Docking

TL

TL

Cross-Docking DC

The “Last Mile” Urban Transport Problem

■ The “last mile” problem• Common issue in logistics.• More time-based than cost-based problem.• Components:

• Delivery time (e.g. duration, possibility to fix delivery date);• Reliability of delivery (e.g. availability of goods, order handling time);• Flexibility of delivery (e.g. delivery date, delivery address);• Quality of delivery (e.g. accurate delivery, condition of delivered goods).

• Unattended delivery problem:• Mainly apply to parcel deliveries.• Contradiction between working schedules and delivery schedules.• Made worse by the growth of two income families.

Traffic Conditions in Major American Cities, 1982-2003

0%10%20%30%40%50%60%70%80%90%

100%

1982 1990 1997 2003

Extreme

Severe

Heavy

Moderate

Uncongested

Boston – Washington Corridor: Volume to Capacity Ratio

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Toll Bridges and Roads, New York Metropolitan Area (1000s of vehicles per day)

300

Long Island

Brooklyn

Queens

State

n Island

Bronx

Manhatt

an

New Jersey

Lower New York

Bay

Raritan Bay

Long Island Sound

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son

Riv

er

100

125

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Average Hourly Traffic on George Washington Bridge, 2002

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

12AM

1AM

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1PM

2PM

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Eastbound

Westbound

Total

Truck Freight Corridors

New Jersey

Long Island

New York

Brooklyn

Queens

State

n Island

Bronx

Manhatt

an

GWB

TNBWSB

TZB

VZB

TBBLT

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Connecticut

JFK

LGA

EWR

About 70 million truck crossings per year

Major Crossing

23.2

2.0 1,000 of Trucks per Day (2000)

8.6

7.47.8

5.2

5.7

1.5 8.4

4.8

6.44.21.9

QMT

BBT

8.4

Logistical Strategies to Cope with Urban Congestion

Shipping less Demand responsive systems. Reduce returns.

Shipping timing Allow greater shipping time and outside rush periods.

Efficient packaging Reduce the shipment size (volume) of the same load.

Modal shift Use a mode that is less impacted by congestion.

Challenges to Urban Freight Distribution

■ Multimodal Integration of Freight Transportation• Problem of modal dependence (80% trucking).• Specialization of modes, modal shift and freight diversion.

■ Entropy and Energy• Maintaining the cohesion and productivity of freight distribution.• Growing disorder and energy costs.

■ Urban/Suburban Supply Chains• Coping with the “last mile”.• Difficulties to maintain just-in-time and timely supply.• High distribution costs.• Adaptation of modes and delivery times.