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Webinar Participants 2

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Mechanics of the seminar

The webinar is being recorded, the URL will be sent out to participants and posted at www.coe-sufs.org

Participants from the US and Canada can:Use Adobe Connect to receive the audio (PRIMARY method)Dial 1-888-446-7584, access code 1120583

International participants can: Use Adobe Connect to receive the audio (PRIMARY method)Use Skype or similar to dial 1-888-446-7584, code 1120583 Dial 212-372-3742 (caller paid call)

Submit questions using the Chat feature

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The VREF Center of Excellence for Sustainable Urban Freight Systems

(CoE-SUFS)

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CoE-SUFS

Funded by the Volvo Research and Educational Foundations (VREF)

Main Goal: To jumpstart an integrative process, involving cities, private sector, and researchers to develop new freight systems paradigms that:Are sustainableIncrease quality of life Foster economic competitiveness and efficiencyEnhance environmental justice

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New York City, Albany, USA

Santo Domingo, DominicanRepublic

Barranquilla, Bogotá, Medellín, Colombia

Osaka, Japan

Chennai, India

Mumbai, India

Dalian, China

Nanjing, China

Rotterdam, Netherlands

Abu Dhabi, United Arab Emirates

Melbourne, Australia

London, UK

Singapore, Singapore

Santander, Spain

Sao Paulo, Belo Horizonte, Brazil

Pretoria, South Africa

Toronto, CA

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Peer-to-Peer (P2P) Exchange to share global best practice cases and real world examples of sustainable urban freight systems

Next P2P (May 6th, 2014): Urban Consolidation Centers: The UK Experience

The Research Exchange to share innovative research on urban freight, and related topics

Workshops to bring together public/private sectors and academia, to jointly work to address urban freight issues; Upcoming: India, Colombia, and Mexico

CoE-SUFS Dissemination Programs 7

Urban Consolidation Centers: The Dutch Experience

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The Dutch experienceOverviewExamplesDiscussion

QuestionsWhat are promising or successful variants of UCC in The

Netherlands?What are underlying business models?Which developments are expected?

Content

Examples throughout Europe

Type of UCC

Stakeholder(s) that initiated

Funding Subsidies I Subsidies II Support measures

Distribution vehicles

SuccessBristol UDC Municipality Subsidy EC Structural None Conventional

Kassel UDC Transportation companies

Subsidy Local Temporary Pedestrian zone

Conventional

La Rochelle UDC Municipality (agglomeration)

Subsidy Local Structural Time windows

Electric

Failure

Leiden UDC Municipality Subsidy EC One time Time windows

Conventional and electric

Utrecht Multiple UDCs

Municipality Carriers - - Time windows, usage of bus lanes

Conventional

Malaga Cross-dock Municipality PPP Local One time Pedestrian zone

Conventional and electric

Nuremberg UDC Shopkeepers Carriers and shopkeepers

- - Pedestrian zone

Conventional and electric

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Food Center AmsterdamFood market (1930)General market (1960)Wholesale (1980)Distribution (1990)Localized focus (2010)

Supermarket Retail Distribution Centers

Retail DC’s around major citiesRegional & local functionMainly cross-docking

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Retail DC’s (e.g. Ahold)

Local logistics clusters(e.g. Amsterdam food center)

UCC Models

Last mile

City Border

Door-to-doorNetwork

Last mileConsolidation

Big Retail

CollaborativeHub

Focus of today

City Border

UCC Implementations

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City Perspective

UCC as a solution from city perspective City logistics activities appear to be unorganized from city

perspective UCC as a solution to organize and optimize last mile deliveries (Local) authorities see UCCs as solution for carriers because:

No city access restrictions or time-windows No difficulties maneuvering trucks in narrow streets and historical centers No congestion and parking issues in cities

Carriers have a different perspective:solving issues is their job!

Many UCCs initiated by authorities failed

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Examples

1. Binnenstadservice (“Inner City Service”): City Perspective

2. L’Hospitalet de Llobregat: City perspective3. Transmission: Carrier UCC initiative

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1. Binnenstadservice

Binnenstadservice: The Concept

Dutch UCC active since 20081990-2005: Many failures or studies about UCCs, but

hardly any successful implantations2008: Binnenstadservice started as solution for small

retailers in the city of Nijmegen => bottom-up initiative with start subsidy of local authorities

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Situation before 2008Collective receiving point for shopkeeper: Binnenstadservice

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Binnenstadservice: The Concept

‘Low price’ services packages for local stores: receiving goods, delivering goods at a predictable time, organizing reverse logistics (shopkeeper needs to change his/her delivery address to BSS)

Extra services (value proposition receiver): storage, home-deliveries, value added logistics, possibilities for e-tailing

Locally focus on small, independent retailers, since their deliveries are often not organized nor optimized.

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Binnenstadservice: The Concept

Nationally focus on shippers and retail chains

BSS bundles deliveries of multiple suppliers

BSS uses clean transportation (value proposition authorities): electronic bicycles and natural gas trucks, electric vehicles

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Binnenstadservice: Development

Start in Nijmegen (2008) as one UCC

Growing to over 10 Dutch cities (franchise concept) over the years

Decline in growth Local (development of costs non-

linear) National (local heroes / entrepreneurs)

needed, national coverage necessary for value proposition to shippers

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Nijmegen

• One of the oldest cities in the Netherlands

with over 161,000 inhabitants

• Medieval city center is situated on a small

hill and has a historical structure with streets

where many small, independent retailers are

located

Binnenstadservice: A short History

Start in Nijmegen, April 2008Location 1.5 km outside city centre, 18 hr a day openAfter one year 98 stores joinedSubsidy given for 1 year in 2008 to find enough stores

to join. Since April 2009 BSS operates without subsidy

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Binnenstadservice: UCC Effects after one year

Scenarios

DataLarge set of data on traffic in city centre availableSurvey among truck drivers (OD, deliveries)Analysis of BSS deliveries

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Binnenstadservice: Methodology

Modelling the local impacts Use of RESPONSE model of TNO to define routes of trucks in

city center (fleet size, travelling time and travelling distance) Output of RESPONSE was used for Urban Strategy model of

TNO to calculate and visualize local impacts of deliveries Air quality (NO2, PM10) Noise nuisance (LDEN in dB) Nuisance for residents (amount of residents that experience

loading/unloading activities within 100m of their home)

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Binnenstadservice: Logistics Effects

After one year reduction of 5% truck kilometres, 7% of truck stops

Scenario 2 (max) reduction of 32% truck km, 25% of truck stops

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Data for one representative day

Binnenstadservice: Air Quality

Decrease in km results in fewer emitted pollutant emissions For local impact it is concentration that influences human health NO2 and PM10 indicate the local air quality Between scenarios hardly any difference in concentration. The

savings are too small compared to other traffic (passenger traffic and buses) and the high natural background concentration

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Binnenstadservice: Local Effects on Noise

Other traffic is also the most important variable for the noise level

Noise level within city center is lower on ring road around city center. Within the city center it is mainly caused by buses and by freight traffic.

Noise calculation is based on the daily average according Dutch legislation. Changes during short periods of the day are not calculated properly in this way => therefore noise nuisance calculated (peak moments)

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Binnenstadservice: Nuisance for residents

Amount of residents that experience a certain number of loading/unloading activities within 100m of their home

After one year small decrease of nuisance. In maximum scenario a clear shift towards nuisance fewer residents

Improvement of traffic safety and quality of life in city center expected

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Binnenstadservice: Network of UCCs

BSS in more cities: interesting for carriers No problems with local regulations

One contact for many cities

Large time-windows

Enough space for (un)loading

Effects calculated for 2 different shippers/carriers

Scenario’s (maximum effect all carriers’ deliveries in city to BSS) Scenario 0 – no BSS Scenario 1 – 6 cities with BSS █ Scenario 2 – 20 cities with BSS █ █

Scenario 3 – 41 cities with BSS █ █ █

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Binnenstadservice: Network of UCCs

Results for two cases (based on data of two BSS customers)

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Binnenstadservice: Network of UCCs

Considerable savings per delivery (in case a BSS franchise is used) Kilometers: 48-72% Time: 60-70% Costs: 59-71% CO2 emissions: 47-71%

Savings vary based on: Type of deliveries Limiting factor for length vehicle roundtrip Number of kilometers between city and carriers’ DC Number of deliveries in city

Savings (per order) are similar in case only city centre addresses are delivered via BSS (in stead of all city addresses) of carriers

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Binnenstadservice: Lessons Learned Starting with a ‘free’ service makes it difficult to develop to a financially

viable business model => always a fee for all services Difficult to get rid of label ‘subsidized’ => use subsidy not for operations,

local authorities as customer Local growth is difficult: costs (vehicles, staff, IT) develop non-linear in

contrast to volume of customers => develop towards non-asset based UCC

Proposition to local small retailers is evident (but relatively limited): local hero required for each city

Proposition to shipper: only in case of national coverage Proposition to carrier: no real proposition, last mile deliveries are the

core of carriers’ work Proposition to (local) authorities: cleaner, quieter, less nuisance, safer

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2. L’Hospitalet de Llobregat

L’Hospitalet de Llobregat: Setting

Demonstrating how UCC can work Local retailers as customers Local authorities as big launching

customer DHL Supply Chain as operator

Using existing facilities

Issues after demonstration:

Financially viable business model Retail involvement, big freight attractors,

local authorities, other carriers

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Big demand attractor Local Retailer

Supplier 1Supplier 2Supplier NUCC (DHL)

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Urban Consolidation Center DHL-STRAIGHTSOLBusiness model approach

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Negative business case

- One time pickup- Free add on municipal newspaper- City council as new partner

- Customer acquisition

- Operation of UCC- Extra fleet, extra

personnel- Extra costs

- Delivering to UCC instead of the retailer

- Time and cost savings

Societal and environmental benefits

Urban Consolidation Center DHL-STRAIGHTSOL

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Different value propositions for different stakeholders:1. Agreement with the receivers (small retail and big freight attractors)

with other value added services for which they would like to pay (and non-asset based / partly hiring transport)

2. Agreement with other LSPs for cost or benefit sharing3. Agreement with shippers (paying UCC separately for last mile delivery

instead of only LSPs) => requires other conditions (e.g. terms comparable to Incoterms in international freight transport)

4. UCC as enabler for other solutions such as electric vehicles or bicycles5. Active involvement of the municipality to restrict the entrance for not

fully loaded / polluting or otherwise undesired vehicles in the city center

Urban Consolidation Center: Financial Aspect

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Zero-Emission Inner City DistributionKey Succes Factors –from a Dutch example

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TransMission: Inner City Distribution 39

Rome

Pompeii

A rich history

TransMission NL 40

Noordhorn

Assen

Deventer

Enschede

Geldermalsen

Helvoirt

Weert

Beverwijk

Almere

Zoetermeer

Utrecht

Dordrecht

Bergen op Zoom

13 Regions - Depot Almere serves Amsterdam

Amsterdam

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TransMission: Introduction

High density multi drop distribution network Parcels, Pallets, General Cargo - 1 Process Overnight pick-up & delivery Benelux - every day everywhere Inner city & High Street Business Areas and Home Deliveries Lots of Extra Services

Customers SME Trade & Industry Subs of Large International companies

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TransMission: Introduction

Figures 1.200 staff 16.000 shipments/day 450 vans & trucks

Structure – Family owned 11 Depots NL – shareholders 2 Depots NL – owned 4 Depots BE – partners 1 Small Central HQ

Quality & Service = Contract People with passion en affinity 100% Transparent quality Flexible en creative

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TransMission: Inner City Distribution

ChallengesTraffic CongestionNoisePollution (CO2 & NOx)Safety“Quality of Inner Cities”

The SolutionOne frustrated entrepreneurIn lengthy “working”- group

sessionsIn the right positionAt the right time

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City of Utrecht

Environmental Zone

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Logistics center at edge of inner city• Receiving, cross docking, loading

• On time delivery of shipments

• Collections, returns and empty packaging

• Open EDI to connect multiple supply chains

• Warehousing for retailers

• Neutral branding to attract all carriers

Cross Chain Control Centerfor Inner City Distribution

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Key Success Factors

• Location

• Volume – parcels & pallets

• Vehicles

• High level IT with low level detail

• Sponsor

• Project champion

• Perseverance

• Marketing

Integrated Approach Required

People Process

Policy Technology

Customers

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People Process

Policy Technology

Customers

Location

• Availability

• Suitable

• Costs

• Logistics not sexy

• Traffic

• Site redevelopment

• Planning PermissionAmsterdam environmental zone

and Cargohopper Location

Local Government has task inland use/site planning

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Volume

1. Food

2. Food services

3. Construction

4. Waste collection

5. Own account

6. Parcels/Pallets

7. Couriers

Food & food services, constructionand waste are the biggest flows

Heavy loads option:• Fully electric truck• 12 – 5 net• 15 – 7 net• 18 – 10 net• Classical design• Range limits!

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Vehicles

• Range

• Loading Capacity

• Speed

• Specifications

• Availability

• Regulations

• Exemptions

Maximum range requires proximityto inner city

Cargohopper II• 75 kms range• 2,800 kg net payload• 50 kms/hr speed• 10 Europallets• 16 rolcontainers• 21,5 Cbm• Width 1,75m

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Electric more expensive than diesel

But highest payload per € investment

11.21.41.61.8

22.2

E-Truck/12 CH-2/2.5 CH-1/1.5

Cost Factor Electric over Diesel

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E-Truck/12 CH-2/2.5 CH-1/1.5

€ x 1,000/Net Payload

Cargohopper most efficient

Option:• Solar Power• Integrated roof panels• Loading whilst operating• Range extension 15%• Really zero-emission

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Cargohopper – Cost/Benefit Analysis

Benefits befall to Society• Clean - where it matters• Silent• Safe• Friendly• Huge improvement in living quality• Extra investment costs need to be offset

• No operational subsidies

Local Government Policy

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Conclusions

• Fulfill Key Succes Factors: People, Process, Policy &

Technology, Customers

• Cargohopper gives best net payload/€

• Solar power option to go the extra mile

• No abstract policy, white paper or vague future

100% Zero-emissionInner City Distribution

Is possible – today!

Discussion

Difference with Japan?Position in Europe?

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On Public Involvement

Basic services (UCC) Extended services

Marketissues

• Uptake business model

• Horizontalcollaboration

• Last mile governance with receiver or carrier

• Warehousemanagement

• Cross-docking• Value added services• Vertical collaboration

Public issues • Regulatory protection• Physical support• Land use• Subsidy• Pricing

Q&AQ&A

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More Information Quak H.J. and L.A. Tavasszy (2011). Customized solutions for sustainable city

logistics; The viability of urban freight consolidation centres, in: J. van Nunen, P. Rietveld en P. Huijbregts (eds.) Transitions towards sustainable mobility, 213 – 234, Springer, Berlin.

Van Rooijen, T and H.J. Quak (2010). Local impacts of a new urban consolidation centre – the case of Binnenstadservice.nl. Procedia, 2 (3), pp. 5967-5979.

Quak, H.J. (2008). Sustainability of Urban Freight Transport – Retail Distribution and Local Regulations in Cities. ERIM, Rotterdam (ERIM Ph.D Series Research in Management 124, TRAIL Thesis Series T2008/5).

www.binnenstadservice.nl J.H.R. van Duin, L.A. Tavasszy, L.A., Quak, H.J. , 2013. Towards E(lectric)- urban

freight: first promising steps in the electric vehicle revolution. In European Transport (54), 1-19

STRAIGHTSOL: www.straightsol.eu Deliverable 5.3 Business models for innovative and sustainable urban-interurban transport (2014)

info@cargohopper.nl

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Dr. Hans Quakhans.quak@tno.nl

Prof. Lorant Tavasszylori.tavasszy@tno.nl

Peter TjalmaPeter.Tjalma@Trans-Mission.nl

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