The limits of public policy intervention in urban logistics: Lessons from Vicenza (Italy).

Transcription

1 The limits of public policy intervention in urban logistics: Lessons from Vicenza (Italy). Sandrine Ville 1, Jesus Gonzalez-Feliu 1*, Laetitia Dablanc 2 1 LET, University of Lyon 2. ISH 14 avenue Berthelot, Lyon cedex 07, France 2 IFSTTAR SPLOTT. 2 rue de la Butte Verte, Noisy-le- Grand cedex France Reference: Ville, S., Gonzalez-Feliu, J., Dablanc, L. (2013), The limits of public policy intervention in urban logistics: Lessons from Vicenza (Italy), European Planning Studies, vol. 21, n. 10, pp * Corresponding author : tel Fax : jesus.gonzalesfeliu@let.ish-lyon.cnrs.fr 1

2 Abstract For over fifteen years, the subject of urban logistics has preoccupied many stakeholders, including both private and public decision-makers. The purpose of this paper is to present a study of the limits of public policy regulations restricting vehicle access to limited traffic zones to promote the use of urban consolidation centres (UCCs). After examining the main technical and economic aspects of implementing an UCC, we present the case of Vicenza (Italy), which has implemented very restrictive regulations. We study the municipal regulations and their legal consequences, by analysing court rulings issued between 2006 and 2009, following a lawsuit brought by an association of freight transport carriers due to these restrictions. Although this case seems applicable to a specific context, we identify several lessons that can be extrapolated to other cities. Therefore the lessons drawn for other urban areas in Europe are presented, and their advantages and possible transferability studied. Keywords: urban logistics, local policy, regulations, urban distribution centres, competition law 2

3 1. Introduction Freight transport provides an essential link between goods supply and demand. The freight sector is a major source of employment, but is facing problems related to congestion and environmental concerns, especially in urban areas. Before the 1980s, it was believed that urban traffic generated by freight transport did not have an significant impact on road congestion and air pollution in urban areas (Crainic, 2008). Today, with the expansion of urban areas and phenomena such as logistics sprawl (Dablanc and Rakotonarivo, 2010), urban goods transport significantly contributes to negative effects such as congestion, CO 2 emissions, local pollution and noise (LET et al. 2006). For example, in large French cities, goods transport 1 is responsible for around 30% of NOx emissions and almost half of particulate matter emissions resulting from urban transport (LET et al. 2006). Consequently, urban goods have been the subject of several studies, including the role of public policies and city planning (Hesse, 2004) and the types of logistics organizations in urban zones (Broll and Roldan-Ponce, 2011). This objective of studying goods flows within urban areas and their interactions with a territory, its inhabitants, economic stakeholders and other decision makers, is now commonly referred to as "urban logistics" (Anderson et al., 2005). In the 1990s and the beginning of the 21 st century, public administrations and other institutions funded several studies and pilot tests have been implemented to organise urban freight distribution in order to decrease traffic and pollution generated by this sector (Zunder and Ibañez, 2004). Most of these studies were performed in view to assisting public authorities to plan urban freight transportation (Ambrosini and Routhier, 2004; Muñuzuri et al., 2006; Dablanc, 2010). Among the most popular urban 1 Here we refer to the definition of Ségalou et al (2004), which includes all goods exchanges between all the establishments of an urban area, motorised shopping trips and home delivery B2C flows and all town management trips, including construction, maintenance, postal services and waste management. 3

4 logistics concepts is that of Urban Consolidation Centre (UCC), defined by Allen et al. (2007) as a logistics facility situated in relatively close proximity to the geographic area that it serves (a city centre, an entire town or a specific site such as a shopping centre), to which many logistics companies deliver goods destined for the area, from which consolidated deliveries are carried out within that area, in which a range of other value-added logistics and retail services can be provided. To the above definition, we add that public authorities very frequently provide financial support to UCC projects. Indeed, because of their central locations, UCCs often require significant real estate expenditure which are generally covered by public funds (Boudoin, 2006). These urban terminals emerged in the 1990s, when there were more than one hundred of them, notably in Germany and the Netherlands. UCCs ran up against difficulties related to hesitancy by municipalities to continue subsidising experiments. Today, there are only about 20 genuinely significant consolidation terminals of this kind in Europe, notably in Italy (SUGAR, 2010), and a few in Japan (Dablanc, 2010). The reasons for this situation (only about 15% of the UCC projects and experiments have become operational systems) are related to the organizational changes introduced by the systematic utilisation of an UCC, and its impacts in terms of cost, quality, accuracy and transfers of responsibility. Indeed, the unsuccessful experiments were generally not endowed with solid and profitable business models, and in most cases they failed to attract the potential users of such systems due to the lack of commercial promotion, or if there was no obligation to use them (Gonzalez-Feliu and Morana, 2010). Indeed, the efficiency of an UCC seems to depend heavily on the presence of appropriate local regulations, including vehicle access rules for the zone covered by the UCC and the benefits extended to UCC operators. Thus we focus on the question of how far authorities can enforce regulations before they risk legal challenges, since although 4

5 intervention by public authorities is now necessary to develop UCCs, they are seen as a barrier to competition by private transport companies. This paper addresses this issue, by examining the example of the city of Vicenza in northern Italy. The Vicenza consolidation centre relied on the most common restrictive regulations and allows us to identify the effects of such decisions and the legal risks implied by such measures for European cities today and in the future. After describing UCCs and their principal components (Section 2), we present our case study (Section 3). First, we study the individual regulatory steps leading to the full implementation of the Vicenza UCC. We examine the motives of the different parties involved, as well as court decisions regarding a complaint lodged by carriers who were unhappy with changes in local regulations intended to favour UCC use. Finally (in Section 4), lessons drawn from the Vicenza case are identified and discussed in order to assess the possibilities of transfer to other European cities. 2. Urban Consolidation Centres: definitions and typology Until the 1980s, each carrier general made its own deliveries from one or several grouping/de-grouping terminals located at varying distances from the final recipients. In response to societal and consumer demands, new ways of consolidating flows in dense urban zones have emerged in recent years, aimed at reducing the number of vehicles and pollution, as well as increasing productivity. These new forms of organisation are founded on new logistic terminals specifically designed for urban consolidation. Goods flows are bundled and their delivery is co-ordinated. The objective is to serve the city with fewer vehicles that are better loaded and make less frequent deliveries to each recipient. Often, these vehicles run on natural gas or electricity in order to lessen the environmental impact of the new system. 5

6 In France, more than twenty UCC projects have appeared in local urban transportation plans (plans de déplacements urbains, or PDUs) since a national Clean Air Act was passed in This law required cities to develop PDUs including freight transport policy strategies, therefore generating attempts at urban freight consolidation (CERTU- ADEME, 1998). In Europe, more than one hundred UCCs were implemented, but most of them did not produce the expected results (Dablanc and Massé, 1996; Marinov et al., 2010). Experiments were also carried out in Japan, where two UCCs are still functioning today (Dablanc, 2010). Only a few of these experiments made the transition into truly operational, financially sound systems, because of the volumes of goods necessary to make these systems profitable and the organizational changes that they entail, which are not always easily accepted by carriers. There are many reasons for the diversity of these European experiments, primarily related to two issues: the economic sustainability of the delivery system paired with the physical terminal and the reliability of the service it offers. The first UCCs were private or semi-private initiatives taken by individual businesses or groups of carriers, and were set up up to promote optimisation (Dablanc and Massé, 1996). Later, environmental concerns prompted public administrations in several countries to design such systems for urban goods distribution in medium-sized cities. It was more difficult for similar projects in larger European cities to make the transition towards functioning systems, and they generally did not continue operating over the long term (Gonzalez-Feliu, 2008). The following lesson can be drawn from fifteen years of conducting experiments in Europe, most of which have been unsuccessful: 1. UCCs do generate significant savings in emissions. For example, in 2009 the Padua UCC resulted in a reduction of nearly 70% in CO 2 emission and a reduction of about 65-70% in other polluting substances for both people and 6

7 goods traffic in the restricted area, i.e. the historical city centre (Gonzalez-Feliu and Morana, 2010). When accounting for freight only and extended to the entire urban area, these savings amount to about 10-15% of total urban freight distribution emissions. 2. Except in unusual circumstances, the objective of consolidating intra-urban delivery tours is not in itself sufficient to economically justify new infrastructure and changes to the habitual organisation of carriers. The cost of additional transhipping in the logistic chain is not covered by the financial gains associated with consolidation, especially when implemented in an urban terminal (Gonzalez-Feliu and Morana, 2010). Consequently, an urban logistics solution must be economically sustainable. The simple presence of a logistics terminal such as a UCC is not sufficient to ensure a scheme's profitability or even its break-even point. An urban logistics solution is thus not only the consequence of an infrastructural or technological alternative but has to include several interconnected components (COST 321, 1998; BESTUFS, 2009). We group them in the following categories: Infrastructure. For the terminals themselves, particular care must be taken in the search for available urban real estate close to the zone serviced. Terminals are not the only relevant types of infrastructure. Lanes and parking areas reserved for freight transport may also favour the use of a delivery system in dense areas. Logistics organisation of transport. This item includes the main design, planning, and optimisation steps for the system's logistics chain. They allow the definition of the main organisational strategies. 7

8 Technologies. In general, two types of technologies are used. Information and communication technologies (ICTs) promote the exchange of information, vehicle and goods tracking, and other transport support operations. Vehicle technologies, specifically those related to engines, lead to reductions in pollutant emissions and help improve air quality. Communications. This item refers to processes and means for communicating with potential users of the system, as well as other stakeholders directly or indirectly involved in the urban logistics system. Funding. For most urban logistics systems, private funds alone are not sufficient to cover the costs of establishing a UCC and its vehicle fleet (often composed of clean vehicles). Public subsidies and low-cost recycling of existing facilities are the most common forms of assistance when launching an urban logistics project. Operational costs can sometimes be covered by revenue, notably in cases where the system manager is also the facility owner. Regulations. Public authorities introduce legislation or other regulations to promote the use of the delivery consolidation system they desire. These regulations can be restrictive (obligations or strong incentives for vehicles to use the UCC) or founded instead on advantages given to users. Focusing on regulations, several measures can be applied by public authorities to promote the use of UCCs. The most common are those of limited access to zones or delivery time windows, as UCC vehicles are not subject to these restrictions (COST 321, 1998). Another category of actions is that of incentives to the carriers using the UCC, such as financial support (sometimes related to local tax breaks) or other advantages related to the infrastructure s use. Other actions are related to pricing, as in the experiments carried out in London and Genoa (Gonzalez-Feliu, 2008). 8

9 3. The case of Vicenza As we mentioned above, the creation of a UCC generally implies creating more or less restrictive traffic regulations. For example, setting up a UCC in La Rochelle, France, involved numerous municipal rulings to reduce freight vehicle access to the town centre; likewise in Vicenza. Both municipalities have decided to make urban goods delivery a public service which was then delegated to their respective UCCs. Although the concession of a public freight service did not generate specific litigation in La Rochelle (as traffic restrictions are fairly limited and permit exceptions) 2, it has been the subject of much debate in Vicenza, where a series of municipal rulings has gradually reduced delivery vehicle traffic within the municipal territory up to the point of barring all vehicles except those of the UCC. This policy provoked an outcry from transport operators who set up an association to challenge the validity of the municipal rulings in court. This is the reason why we decided to examine the case of Vicenza and present our findings here in detail. To achieve this, we first recall several facts (3.1), then present the judges' decision (TAR Veneto, the Regional Administrative Tribunal of Veneto) (3.2), and, finally, examine the ruling and opinion issued by the Italian Council of State (3.3). 3.1 The facts The historic centre of the city of Vicenza was awarded UNESCO world heritage status in In order to protect its cultural heritage and also for public health concerns, Vicenza passed a municipal ruling in 1996 that created pedestrian and limited traffic 2 In La Rochelle, few transport firms have their own logistics terminal. They are therefore relatively happy to take advantage of the UCC. 9

10 zones (LTZ) 3. When the desired results were not achieved, the municipality launched an ambitious program 4 intended to rationalise the distribution of goods in the city. To do this, the municipality implemented an urban logistics pilot program 5 that included the construction of a consolidation terminal and a service taking charge of pick-ups and deliveries of packages within the LTZ using clean electric vehicles. Vicenza City Centre Logistics (Veloce) 6 was set up to implement the plan and provide goods delivery services to all the participants in the zone. This organisation was to manage freight flows in and out of the logistics terminal, using advanced warehouse management technologies. The city chose to gradually implement the system so participants would have time to familiarise themselves and adapt to it. Five municipal ordinances were applied consecutively between 2005 and 2006, to progressively limit traffic access to the LTZ. From 28 April 2005 "air carriers" 7 were clearly identified by an ordinance and allowed access to the LTZ during certain time windows until 30 June After this date, "air carriers" could access the LTZ only if they used a low-environmental-impact vehicle, and only inside the programmed time windows. From 29 June 2006 these carriers had to have a special delivery permit to access the LTZ, the other previous conditions being maintained. The maximum number of permits delivered to each carrier was five. In addition, access time windows were reduced from 31 August 2006 (the access to "air carriers" was possible only between 7 and 9 AM). Finally, from 31 December The ordinance creates time windows during which delivery vehicles are permitted to park on the street, but only for loading and unloading operations. 4 Decision 5102 on 28 December The project was adopted in accordance with the general orientations established by the Transport Ministry in the "General Plan for Transport and Logistics", and included in the "National Transport Plan" and the city plan. 6 This company was created by resolution 21, on 20 March "Air carriers" are those who provide express services using air modes for package transport, such as DHL or FedEx. 10

11 LTZ access was restricted to only electric vehicles operated by Veloce. No exception for "air carrier" was provided. These severe restrictions on access to the historic centre of Vicenza led to discontent among specialised international express carriers such as DHL Express, TNT Global Express and Federal Express Europe, among others, that then set up an association called AICAI (Associazione Italiana Corrieri Aerei Internazionali) 8 and challenged the validity of these municipal ordinances in court. According to one of their representatives, whom we were able to contact, The case of Vicenza did not endanger our companies in itself, but it was symptomatic of a future challenge from Italian cities as a whole to the presence of our vehicles. This dangerous policy trend had to be stopped. 3.2 The court of first instance: the ruling of the Veneto Administrative Court on 23 January 2008 The AICAI association requested before the Veneto regional administrative court (TAR Veneto first section) that certain municipal ordinances be annulled, presenting several arguments in support of its request 9. The first of these arguments was related to the deregulation of the postal sector: as Veloce was publicly funded, its handling of packages was contrary to such deregulation. The second was related to the violation of European regulations on civil aviation security. In order to provide express postal services, a carrier must be considered a regulated agent. To obtain this status, the carrier must prove that its personnel have taken an official training course on safety and security linked to freight, maintenance, 8 Italian Association of International Air Express Carriers. 11

12 warehousing and onboard equipment. While all the members of the AICAI association had this status, Veloce did not. Consequently, it was conducting business illegally. Finally, the AICAI association denounced a lack of justification and violation of civil rights as Vicenza s legislation stipulated that all goods distribution in the historic centre was given to a single operator. It thus eliminated all competition between carriers 10. Although member states and public entities in general are permitted to limit competition (notably by reserving a monopoly over a specific activity) no other means of fulfilling a public objective is tolerated. According to AICAI, this was not the case in Vicenza, as the solution chosen by the municipality was inadequate and out of proportion with the desired environmental goal. In addition, the use of small vehicles would increase the number of lorries in circulation and the public health impact would be marginal, as the terminal served only one small zone. For its part, the city of Vicenza asserted that the measures taken were entirely justified, given the objective of reducing pollution and protecting health in the city centre. Veloce's transport service was compatible with safety enforcement. Finally, since this system was a local public service, it did not violate the law concerning rights to competition. The tribunal rendered its decision on 28 January It confirmed that the regulations in question had created an obligation for carriers to concede their goods to Veloce in order to carry out the final leg of the contracts they established with their clients. Thus, these regulations required carrier substitution, in violation of Italian civil law. In addition, Veloce was forbidden to offer express package services, particularly for packages which had been previously shipped by air, as the company had neither the 9 The arguments were presented per municipal ordinance, and their content is thus repetitive. In order to conserve space, we have decided to present them together in summary. 10 Shippers were also required to go through Veloce if they wished to ship merchandise out of the LTZ. 12

13 requisite authorisations nor the regulated agent status. Nonetheless, the tribunal did not consider the measures taken by the city to be contrary to the deregulation of the postal sector, as their impact was limited to one zone of the municipality rather than the entire national territory. The tribunal thus ruled in favour of the AICAI's request, and annulled the measures in question. The city of Vicenza and Veloce then submitted an appeal to the Italian State Council. 3.3 The position of the Italian State Council in the Vicenza case: the decision of 3 February 2009 The city of Vicenza and Veloce (hereafter referred to as the appellants) offered several arguments in support of their appeal. The first stems from the limited area of action of the LTZ and the fact that Veloce was created only for delivering in this area, without any other purpose. Moreover, the appellants emphasised that it was in no way an objective of Veloce to replace private carriers. On the contrary, the organisation s only goal was to contribute to reducing pollution within the central zone while protecting both cultural heritage and the health of the population. Finally, they added that the Italian Traffic Code allows municipalities to limit access to all or certain categories of vehicles in order to prevent pollution and protect historic and artistic heritage (...), by creating pedestrian and limited traffic zones 11. This power is principally exercised by municipalities. Thus the municipality was simply exercising its regulatory powers. 11 Italian Law 285 of the 30 April

14 Before announcing its decision, the Italian State Council briefly recalled precedents on measures limiting automobile access to city centres. It mentioned several decisions 12 and recalled that decisions regarding vehicle access to urban centres can be made at the discretion of the competent authorities. Their legality can only be questioned on the basis of legitimacy and justification. The partial restriction of traffic is always justified when it is necessary for the protection of cultural or environmental heritage 13. The State Council then overturned the lower court's decision on several points. The first concerned free competition and Veloce s anti-competitive practices. According to the State Council, the decision to restrict traffic in the historic centre cannot be annulled on the basis of accusations that it limits free competition. Indeed, the municipality of Vicenza did not discriminate between the various international carriers. The idea that the Italian postal service benefited from an exception, to the detriment of the international air carriers was rejected, for the Italian Post was fulfilling a role of general public service. Moreover, since Veloce was specifically set up to provide a public service in the LTZ are, such restrictions were consistent with municipal public health and environmental objectives, and did not appear at all disproportionate. The State Council also rejected the argument that the example of Vicenza could lead to a risk in other municipalities. Regarding the prohibition of public financial contributions to any business and the resulting illegality of Vicenza municipality's financial support to Veloce, the State Council recalled that this prohibition is not applicable to businesses providing local 12 Plurimis ex, sect. V, 4 March 2008; n. 824, sect. V, 11 December 2007; 6383, sect. V, 29 May 2006; no. 3259, pour. Plen. 6 February 1993, n The state council also specified that placing restrictions on particular categories of vehicles rather than all vehicles does not constitute unjustified discrimination. Additionally, articles 16 and 41 of the Constitution (supported by AICAI) are not violated when measures are applied to a limited urban zone rather than to the entire national territory. 14

15 public services 14. The Council then emphasised that Veloce offers a local express freight public service, and that this service benefitted only the municipality of Vicenza. Consequently, public funding is entirely legal. Finally, concerning the lack of justification for the measures taken by the city of Vicenza, the consistency of the measures taken for environmental and cultural protection objectives depended on concrete facts on which the State Council could not pronounce an opinion. 15 Consequently, the State Council accepted the appeal by Veloce and the municipality of Vicenza, and overturned the decision of the Veneto regional administrative court. As the State Council is the highest Italian administrative judicial body, the decision of 3 February 2009 was considered res judicata and thus definitive. We note here that the Italian judges who had the opportunity to enquire about the position of the Court of Justice of the European Union (CJEU), did not do so, perhaps believing that the repercussions of this case involved only a limited geographical area and the risks of "contagion" were few (the State Council referred to this in its final resolution). AICAI also had the opportunity to know the view of European judges on the juridical risks posed by the Vicenza case. Nevertheless it did not seize this opportunity. Moreover, AICAI did not try to refer the case to the European Court of Human Rights (ECHR) either, apparently because the case seemed too fragile for the carriers belonging to AICAI. In its book Towards a new culture for urban mobility, the European Commission mentioned vehicle access restrictions as a way of dealing with the environmental impacts of road transport in city areas. However, it states that such measures must not "create disproportionate obstacles to the mobility of people and goods". Therefore, 14 See Cons. St., Sec. V, 25 August 2008, n It declared nonetheless that it is not certain whether the use of small electric vehicles to make deliveries in Vicenza's historic centre will increase the total number of vehicles to

16 assuming that the European Commission considers restrictions on mobility (such as those in force in Vicenza) to be disproportionate, it would then be free to referr to the CJEU. The decision of the Court would be uncertain and to our knowledge it has not had to deal with such a hypothesis. One case related to interurban transport reporting similar prohibitions has been found 16. The Court had to examine several truck bans on main roads in the Tyrol area. It held that less restrictive actions should be considered by the Austrian authorities "before adopting such a drastic measure like the total ban from driving on a motorway constituting a vital channel of communication between Member States" and therefore considered that the contested regulations ignored the principle of proportionality and could not be validly justified by reasons relating to the protection of air quality. The Court finally declared these regulations incompatible with the Treaty of Rome. We have raised the legal consequences that could result in widespread imitation of the policy implemented by the city of Vicenza. The infringement of EU law on competition may exist, although it is not very obvious. We recall here that EU law does not condemn monopoly per se but it does condemn abusive monopoly. Therefore, if a UCC operator does not take undue advantage from its monopoly by practising unfair prices, by penalising the consumer or by applying dissimilar conditions to its trading partners, it does not violate EU law on competition. Since legal risks are difficult to evaluate with only one example of jurisprudence in the urban context and few regarding interurban road transport, we must now ask ourselves what lessons the case of Vicenza could provide European cities. Although traffic restrictions in the LTZ of Vicenza will have only minimal economic impacts on express freight businesses (as Vicenza is a rather small city), the risk is more serious when we 16 CJEU Case No. C

17 consider metropolitan areas like Milan or Rome, or even larger cities elsewhere in Europe. Is the case of Vicenza an "Italian exception" as part of the Italian context of very specific urban goods distribution policies, or is it in fact a future reference for European cities? 4. Lessons for European metropolitan areas The Vicenza precedent that we have just presented concerns a seemingly minor subject in transport law: extreme restrictions on the access of freight transport vehicles to city centres. However, we find that this case provides significant lessons for transport, environment, and urban planning practitioners in European cities. The Italian State Council reasserted and restated the right of a municipality to considerably restrict the free movement of goods transport vehicles in historic centres. This was done within the specific framework of Italian law, but it was also based on environmental arguments that are explicitly or implicitly present in numerous regulations targeting freight traffic in large European cities. By rejecting the accusations of abuse of power brought against the city by an association of large international express carriers, the State Council s decision created a precedent that can be interpreted on the possibility for cities to take strong action to protect the environment. The Vicenza case should be understood in the particular context of Italian urban consolidation centres, and the specific case of Vicenza (a small city centre with high historic value). Around ten urban consolidation terminals now exist in Italy. They are in different stages of implementation, but all share the purpose of protecting historic centres with rich architectural heritage. These historic cities are more numerous in Italy than in most other countries of Europe. We should also note that own-account transport plays an important role in supplying urban business sites in Italy: 80% of delivery 17

18 vehicles in cities are own-account, but only 20% of tons-km is handled on an ownaccount basis. 17 Likewise, even when third party shipping is used, it is dominated by the padroncini, i.e. small individual transport entrepreneurs who are usually owner-drivers. These two groups, own-account shippers (i.e. shop keepers or artisans handling their own supply and delivery) and small third-party carriers (padroncini), share the characteristic of under-optimisation. They generally do a small number of poorly organised tours and their vehicles are generally far from full. Urban goods distribution is under-optimised everywhere in Europe (Dablanc, 2007), but this phenomenon reaches an extreme in Italian cities. It can be understood that under these conditions, Italian local officials attempt to "impose" the optimisation of freight transport in city centres. Thus Vicenza is one of several Italian municipalities that make use of particularly innovative regulations. The examples of Parma and Genoa, whose regulations initially favoured a UCC, are also interesting. In both cases, a municipal ordinance restricted the access of an LTZ to non-accredited vehicles. Two basic requirements have to be met to obtain accreditation: the use of low emission vehicles and better optimisation of vehicle load when entering the zone. Despite these Italian specificities, we do not consider the Vicenza case to be of interest only in Italy as it has significance at European level. First, it is part of a structural change opposing two schools of thought, two different visions of city logistics. Some European cities, including Italian ones but also others like La Rochelle in France or Monte Carlo in Monaco, consider that a publicly subsidised UCC (preferably paired with restrictive municipal regulations) is the only way to introduce successful optimisation of urban goods distribution. This commitment translates into concrete financial support to lease a terminal, buy electric or gas-powered vehicles, or assure the 17 These figures were cited during a debate between experts and local officials at the Padua City Logistics Expo in

19 day-to-day operation of UCCs. Client fees do not appear to be sufficient to cover expenditure for the entire project (including initial investments), although in some cases they can cover daily operations after a training and development period (Gonzalez-Feliu and Morana, 2010). The Mayor of Parma has stated that "In this case, the market simply does not work spontaneously. Public authorities must accept that financial assistance is necessary and provide it, and that's what we do". 18 Several UCCs that planned to reach medium or long-term financial independence were unable to survive; this was the case for many UCCs in Germany, the Netherlands, and Switzerland at the end of the 1990s, and more recently for Genoa in Italy. However, some cities can currently balance their operating costs against receipts from clients, which is the case of Padua and Parma in Italy. On the other hand, other cities elsewhere in Europe do not consider the rationalisation of freight delivery to be a municipal responsibility, but rather the result of market mechanisms within each economic sector present in the city. There, local public action directly targeting freight transport involves more traditional, though updated measures such as delivery vehicle access restrictions based on tonnage or pollution criteria, or traffic and parking plans and the implementation of delivery zones on the roadway or within businesses premises. The introduction of information and communication technologies can reinforce these traditional measures (e.g. cameras able to read license plates and verify lorry access such as in the London Low Emission Zone, or devices near roadside delivery areas enforcing maximum delivery times). Any consolidation terminal in these cities is a result of private initiative, supported if necessary by a few public measures that are nonetheless lightweight and not of a financial nature. 18 Statements made at the City Logistics Expo mentioned above. 19

20 The legal decisions concerning Vicenza are relevant to both schools of thought, not only in the Italian context but in several European cities for the following reasons. The first is that the stakeholders most reticent to those restrictions were not the under-optimized small padroncini, but international express parcel delivery carriers, the so called air transport delivery companies, which have their own optimization schemes. The second is the fact that these carriers already benefit from exceptions for accessing several LTZ areas, not only in Italy but also in other European cities, thus the restrictions appear compatible with the right to free competition. The introduction of extreme restrictions in itself is therefore not always applicable to other contexts. However, the fact that Vicenza s ordinances attempted to break these carriers privileges in contrast to those of other stakeholders has to be taken into account. In a sense, Vicenza s actions ensure that the same conditions are applied to all non-perishable goods transporters independently of their nature or status. Moreover, although the context seems very specific, all the carriers agreed to instigate costly and time-consuming legal procedures, afraid that these actions would be generalised at a wider scale (national or European). In the year after the final decision of the Italian Court of Justice, other Italian cities started to reduce the privileges of express parcel delivery carriers, although to a lesser extent. For cities interested in the proactive optimization of urban freight, the Vicenza case reveals the position of large express carriers present in Europe, and is in line with the development of stricter restrictions than those existing at present. The case clearly illustrates the fact that express carriers wish to "green" their urban operations in order to improve their image but remain cautious and take legal action when they believe that local authorities are overstepping their legislative authority or infringing European competition law. One of the participants in the case against Vicenza confirmed to us that the AICAI's failure before the State Council has not weakened the plaintiff s determination, and that additional legal action would be taken. On the other hand, Vicenza s restrictions are 20

21 extreme and there is consensus among most municipalities that totally forbidding the access to city centres is not the best way to promote a UCC. However, Vicenza s resolutions has strengthened the resolve of some municipalities to impose access time windows on carriers that want to access LTZs and not to make exceptions even if, traditionally, some categories had them. For example, in Padua and Modena, these carriers had the right to buy access permits to enter the LTZ outside the reserved time window. After the decision reached in Vicenza case, these carriers have to follow the same rules as other transport operators and enter the city centre within the two-hour time window stipulated by the municipality. Since this situation remains limited to a small number of small and medium-sized cities, express parcel delivery carriers are not taking legal action, but the question of what would happen if big cities like London, Paris or Rome started to follow the example of Padua or Modena remains to be answered. Although unique UCCs are currently operational only in small or medium urban areas, or restricted to specific uses (serving shopping centres in the UK or specific neighbourhoods in Japan), metropolitan areas can place major restrictions on city centres without imposing the use of a UCC. For cities that have not set up a centralised delivery system but are reflecting on such restrictions, the Italian State Council's decision provides valuable information about the possible legal obstacles to public action on freight transport and delivery operations. The Italian State Council decision is clearly part of a more general shift in European case law over the last several decades, in other words measures that restrict lorry traffic and logistics operations for environmental reasons have become acceptable (Dablanc, 2007). European cities find themselves in a situation where action targeting freight transport traffic will be increasingly challenged by freight carriers, but accepted by judges. This is the case of 21

22 Paris with urban freight corridors, which require heavy vehicles to follow certain roads, and that of London with its road pricing approach. Conclusion In this paper, we have commented on an Italian Court decision and evaluated its significance for European cities. This decision by the highest Italian administrative court, the State Council, authorised the city of Vicenza to continue its implementation of a consolidated delivery terminal, which included strong access restrictions on the vehicles of other carriers within the city centre. Although this case is specific to Italian cities and the Italian legal system, it is significant for other European cities. It demonstrates that large national and international express carriers (such as UPS, TNT, and DHL) are increasingly wary of centre-city access restrictions. This increases the risk of legal complications. However, this case may also reassure municipalities since judicial authorities generally take a positive attitude to municipal measures targeting freight transport vehicles. This acceptance essentially depends on environmental arguments. While urban goods transport is essential for the economic well being of cities, it is also recognised as a significant source of pollutants and greenhouse gasses. The Vicenza case also highlights a unique option chosen by certain European cities: the urban consolidation centre (UCC). A UCC is a localised terminal very close to a city centre which receives and distributes goods flows for businesses in the central zone in a shared, consolidated manner. Because of their very central location and other reasons beyond the scope of this paper, UCCs are costly systems and often require public subsidies. The city of Vicenza and around ten other Italian cities have chosen to act directly on the organisation of goods flows with UCCs, and have taken financial responsibility for this choice. However, we would not suggest that other cities follow 22

23 the example of Vicenza or La Rochelle. We have identified only a few UCCs currently in operation, and most of them have a strong support from public authorities. To ensure economic continuity, a UCC needs a minimum number of clients and a threshold quantity of goods. In the current context, carriers do not perceive the advantage of passing through an UCC, due to reasons of cost and the transfer of responsibility (Gonzalez-Feliu, 2012). Indeed, carriers want total control over their transport operations, and passing through an UCC can lead to delays and problems of responsibility. Moreover, the imposition of a structural change on transport management is seldom well-viewed by carriers (Gonzalez-Feliu and Morana, 2012), and even when public authorities give strong backing to UCCs, as in La Rochelle, carriers remain quite reticent about using them. Only a few cases have proved to be genuinely successful. Many UCCs in UK and Japan have been built to serve specific retailing structures that justify freight consolidation. This consolidation is driven by market regulation, with little support via official regulation. The case of Padua is different. In this city, the UCC had strong support from in the framework of project development but is currently receiving little support from official regulation. What is more, the city's action is not seen as an abuse of power. Also, carriers do not feel they are obliged to pass through the UCC. Instead of prohibition imposed by public authorities, the UCC management company has developed a strong commercial strategy to sell its services to different carriers and now has more than 60 customers that provide enough income to ensure its economic equilibrium on a yearly basis. The case analysed above shows that environmental and public health concerns are sufficient to justify traditional but strengthened municipal measures, such as access restrictions on the most pollutant vehicles. It is perhaps not useful for most European cities to imagine taking more proactive measures such as the implementation of urban 23

24 consolidation centres. The primary conclusion of our article is thus the following: cities can benefit from the "positive" side of the Vicenza ruling (the judge's assertion that municipalities have a considerable freedom to organise their traffic and access restrictions) while avoiding the additional legal complications and risks associated with projects to set up co-ordinated municipal consolidation terminals. These schemes are costly and may create dissatisfaction among freight carriers and logistics firms, leading to legal conflicts. UCCs do have excellent local environmental performance, but affect a tiny proportion of total goods flows in an urban area 19. Thus although they help to improve environmental conditions, their contribution is marginal at metropolitan scale. Despite the fact that the UCC concept is interesting, UCCs alone are not sufficient to solve congestion and other freight-related problems. It is therefore important to study alternatives to the single-operator urban consolidation model of Vicenza and La Rochelle, such as collaborative solutions (Gonzalez-Feliu et al., 2010; Gonzalez-Feliu and Morana, 2011), the free use of terminals with incentives for consolidation (Spinedi, 2008), dedicated delivery areas (SUGAR, 2010), low emission zones (SUGAR, 2010) and above all a mixture of public policy, quality standards, technological solutions, and organisational systems which promote rationalising urban goods flows while conforming to legislation on free competition and incorporating changes agreed by the stakeholders. Finally, concerning public policy measures to restrict heavy vehicle access to city centres without direct relation to the promotion or incitation of UCC-based schemes, it is evident that the restrictions imposed by Vicenza s municipal ordinances are too extreme. However, this case shows that they were not imposed all at once but resulted from a gradual increase of restrictive policies. In May 2006, when the carriers were 19 The mayor of Padua estimates the total decrease in traffic thanks to the CDU at 1%. Statement at the 24

25 allowed access to Vicenza s LTZ under very restrictive conditions, they manifested their disagreement and expressed the possibility of taking legal actions 20, but recourse to the latter only took place when access was officially totally barred. In Padua, express carriers were also reticent to lose the right to pay for an access permit outside the defined time windows, but Vicenza s resolutions gave the municipality a precedent for increasing restrictions and changing these rights. However, the consequences of the decision taken by Vicenza have still not been seen in other cities, and restrictions have not evolved greatly. However, as stated by Ville (2009), cities have a wide variety of elements that they can use to restrict access to city centres in intelligent and different ways. Although most of them do not apply such measures, consideration of intermediary approaches like the definition of compulsory time windows without exceptions is starting. Although extreme, the resolutions passed by the city of Vicenza lend support to the development of less radical policies that permit all types of carrier to enter (with important temporal and technical constraints) LTZ areas. References ALLEN, J., THORNE, G. and BROWNE, M. (2007) Good Practice Guide on Urban Freight. Rijswijk: Bestufs. AMBROSINI, C. and ROUTHIER, J.-L. (2004) Objectives, Methods and Results of Surveys Carried out in the Field of Urban Freight Transport: An International Comparison, Transport Reviews, 24 (1), pp ANDERSON, S., ALLEN, J. and BROWNE, M. (2005) Urban logistics how can it meet policy makers sustainability objectives?, Journal of Transport Geography, 13 (1), pp City Logistics Conference cited above. 25

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