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1 Webinar Participants 2 1
2 Mechanics of the seminar 3 The webinar is being recorded, the URL will be sent out to participants and posted at Participants from the US and Canada can: Use Adobe Connect to receive the audio (PRIMARY method) Dial , access code International participants can: Use Adobe Connect to receive the audio (PRIMARY method) Use Skype or similar to dial , code Dial (caller paid call) Submit questions using the Chat feature The VREF Center of Excellence for Sustainable Urban Freight Systems (CoE-SUFS) 2
3 CoE-SUFS 5 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 sustainable Increase quality of life Foster economic competitiveness and efficiency Enhance environmental justice New York City, Albany, USA London, UK Santander, Spain Rotterdam, Netherlands Osaka, Japan Toronto, CA Dalian, China Santo Domingo, Dominican Republic Nanjing, China Barranquilla, Bogotá, Medellín, Colombia Sao Paulo, Belo Horizonte, Brazil Abu Dhabi, United Arab Emirates Pretoria, South Africa Mumbai, India Singapore, Singapore Chennai, India Melbourne, Australia 3
4 CoE-SUFS Dissemination Programs Peer-to-Peer (P2P) Exchange to share global best practice cases and real world examples of sustainable urban freight systems Next P2P (May 6 th, 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 7 Urban Consolidation Centers: The Dutch Experience 4
5 Content The Dutch experience Overview Examples Discussion Questions What are promising or successful variants of UCC in The Netherlands? What are underlying business models? Which developments are expected? Examples throughout Europe Type of UCC Stakeholder(s) that initiated Funding Subsidies I Subsidies II Support measures Distribution vehicles Success Bristol UDC Municipality Subsidy EC Structural None Conventional Kassel UDC Transportation companies La Rochelle UDC Municipality (agglomeration) Subsidy Local Temporary Pedestrian zone Subsidy Local Structural Time windows Conventional Electric Failure Leiden UDC Municipality Subsidy EC One time Time windows Utrecht Multiple UDCs Municipality Carriers - - Time windows, usage of bus lanes Conventional and electric 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 5
6 Food Center Amsterdam Food market (1930) General market (1960) Wholesale (1980) Distribution (1990) Localized focus (2010) Supermarket Retail Distribution Centers Retail DC s around major cities Regional & local function Mainly cross-docking 6
7 UCC Models City Border Last mile Focus of today Door-to-door Network Last mile Consolidation Collaborative Hub Local logistics clusters (e.g. Amsterdam food center) Big Retail Retail DC s (e.g. Ahold) City Border UCC Implementations 7
8 City Perspective 15 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 Examples 1. Binnenstadservice ( Inner City Service ): City Perspective 2. L Hospitalet de Llobregat: City perspective 3. Transmission: Carrier UCC initiative 8
9 1. Binnenstadservice Binnenstadservice: The Concept 18 Dutch UCC active since : Many failures or studies about UCCs, but hardly any successful implantations 2008: Binnenstadservice started as solution for small retailers in the city of Nijmegen => bottom-up initiative with start subsidy of local authorities Situation before 2008 Collective receiving point for shopkeeper: Binnenstadservice 9
10 Binnenstadservice: The Concept 19 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, homedeliveries, value added logistics, possibilities for e-tailing Locally focus on small, independent retailers, since their deliveries are often not organized nor optimized. Binnenstadservice: The Concept 20 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 10
11 Binnenstadservice: Development 21 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 nonlinear) National (local heroes / entrepreneurs) needed, national coverage necessary for value proposition to shippers 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 22 Start in Nijmegen, April 2008 Location 1.5 km outside city centre, 18 hr a day open After one year 98 stores joined Subsidy given for 1 year in 2008 to find enough stores to join. Since April 2009 BSS operates without subsidy 11
12 Binnenstadservice: UCC Effects after one year 23 Scenarios Data Large set of data on traffic in city centre available Survey among truck drivers (OD, deliveries) Analysis of BSS deliveries Binnenstadservice: Methodology 24 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 (NO 2, PM10) Noise nuisance (LDEN in db) Nuisance for residents (amount of residents that experience loading/unloading activities within 100m of their home) 12
13 Binnenstadservice: Logistics Effects 25 After one year reduction of 5% truck kilometres, 7% of truck stops Scenario 2 (max) reduction of 32% truck km, 25% of truck stops Data for one representative day Binnenstadservice: Air Quality 26 Decrease in km results in fewer emitted pollutant emissions For local impact it is concentration that influences human health NO 2 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 13
14 Binnenstadservice: Local Effects on Noise 27 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) Binnenstadservice: Nuisance for residents 28 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 14
15 Binnenstadservice: Network of UCCs 29 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 Binnenstadservice: Network of UCCs 30 Results for two cases (based on data of two BSS customers) 15
16 Binnenstadservice: Network of UCCs 31 Considerable savings per delivery (in case a BSS franchise is used) Kilometers: 48-72% Time: 60-70% Costs: 59-71% CO 2 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 Binnenstadservice: Lessons Learned 32 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 16
17 2. L Hospitalet de Llobregat L Hospitalet de Llobregat: Setting 34 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 Big demand attractor Local Retailer UCC (DHL) Supplier 1 Supplier 2 Supplier N 17
18 Urban Consolidation Center DHL-STRAIGHTSOL Business model approach 35 Negative business case Urban Consolidation Center DHL-STRAIGHTSOL Societal and environmental benefits - 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 18
19 Urban Consolidation Center: Financial Aspect 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 sharing 3. 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 bicycles 5. Active involvement of the municipality to restrict the entrance for not fully loaded / polluting or otherwise undesired vehicles in the city center 38 Zero-Emission Inner City Distribution Key Succes Factors from a Dutch example 19
20 TransMission: Inner City Distribution 39 Rome Pompeii A rich history TransMission NL 40 Amsterdam Noordhorn Assen Beverwijk Almere Zoetermeer Utrecht Dordrecht Bergen op Zoom Deventer Enschede Geldermalsen Helvoirt Weert 13 Regions - Depot Almere serves Amsterdam 20
21 TransMission: Introduction 41 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 TransMission: Introduction 42 Figures staff 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 21
22 TransMission: Inner City Distribution 43 Challenges Traffic Congestion Noise Pollution (CO2 & NOx) Safety Quality of Inner Cities The Solution One frustrated entrepreneur In lengthy working - group sessions In the right position At the right time City of Utrecht Environmental Zone 44 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 Center for Inner City Distribution 22
23 45 Key Success Factors People Policy Customers Process Technology Location Volume parcels & pallets Vehicles High level IT with low level detail Sponsor Project champion Perseverance Marketing Integrated Approach Required 46 Location People Policy Customers Process Technology Availability Suitable Costs Logistics not sexy Traffic Site redevelopment Planning Permission Amsterdam environmental zone and Cargohopper Location Local Government has task in land use/site planning 23
24 Volume 47 Heavy loads option: Fully electric truck 12 5 net 15 7 net net Classical design Range limits! 1. Food 2. Food services 3. Construction 4. Waste collection 5. Own account 6. Parcels/Pallets 7. Couriers Food & food services, construction and waste are the biggest flows 48 Vehicles Cargohopper II 75 kms range 2,800 kg net payload 50 kms/hr speed 10 Europallets 16 rolcontainers 21,5 Cbm Width 1,75m Range Loading Capacity Speed Specifications Availability Regulations Exemptions Maximum range requires proximity to inner city 24
25 49 Electric more expensive than diesel Cost Factor Electric over Diesel Option: Solar Power Integrated roof panels Loading whilst operating Range extension 15% Really zero-emission E-Truck/12 CH-2/2.5 CH-1/1.5 But highest payload per investment x 1,000/Net Payload E-Truck/12 CH-2/2.5 CH-1/1.5 Cargohopper most efficient 50 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 25
26 51 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-emission Inner City Distribution Is possible today! Discussion Difference with Japan? Position in Europe? 26
27 On Public Involvement Market issues Basic services (UCC) Uptake business model Horizontal collaboration Last mile governance with receiver or carrier Public issues Regulatory protection Physical support Land use Subsidy Pricing Extended services Warehouse management Cross-docking Value added services Vertical collaboration Q&A 27
28 More Information 55 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, , 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 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). J.H.R. van Duin, L.A. Tavasszy, L.A., Quak, H.J., Towards E(lectric)- urban freight: first promising steps in the electric vehicle revolution. In European Transport (54), 1-19 STRAIGHTSOL: Deliverable 5.3 Business models for innovative and sustainable urban-interurban transport (2014) info@cargohopper.nl 56 Dr. Hans Quak hans.quak@tno.nl Prof. Lorant Tavasszy lori.tavasszy@tno.nl Peter Tjalma Peter.Tjalma@Trans-Mission.nl 28
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