New Opportunity for Urban Freight System Based on Subway Infrastructure

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1 New Opportunity for Urban Freight System Based on Subway Infrastructure Korea Railroad Research Institute Dr. Kim, Hag-Seoung

2 1. Background 2. Concept and Details

3 Background

4 Megacities Megacities was one of five visions for the future (Scenario 2 : Mega Efficiency in Megacities) In 2050, megacities have become the epicenter of social, economic and political development. By 2025, the share of people living in cities, globally, will have increased to 58 per cent from 52 per cent in 2010 (KEY LOGISTICS TRENDS IN LIFE SCIENCES 2020+, DHL 2014 ) Highly efficient traffic concepts, including underground cargo transport and new solutions for public transport, have relieved congestion.

5 Urban Logistics Issues Individual choice and responsibility Light weight & Small quantity and high frequency delivery Highly concentrated delivery in Seoul metropolitan area Increase of social cost due to rising urban logistics including traffic, environmental issues and so on Increasing national logistics cost worsens industry profit [Traffic Congestion cost ] Source: National Traffic Congestion cost, KOTI 2015

6 Pollution of Urban Area Roads account for 90% of traffic green house gas emission Environmental pollution concentrated areas: Seoul & Metropolitan and neighboring areas Urgent solution to global environmental problems is needed

7 Concept and Details 1. Current situation 2. Infrastructure & Rolling Stock and Others 3. Concept of UFS 4. Business Model 5. Implementation Strategies 6. Expected Effects

8 Current situation Current Distribution Centers(DC) are located near by border of Seoul - Deliver the goods to stores and customers by small trucks from DC 8

9 Subway Infrastructure Current 16 train depots around Seoul - Many train depots are located close to the center of city

10 Subway Infrastructure Current 9 Subway lines and 293 stations in Seoul - There are a lot of stores and shopping malls around the subway stations in downtown

11 Idea for Urban Freight System(UFS) To be To develop an urban logistics system based on existing subway infrastructure - Use the existing urban railway network in Seoul metropolitan area (without new metro line) - Train depots will play a role of DC then the goods will be delivered by train to stores in Seoul Train Depot A (As DC A) Train Depot B ( As DC B ) 11

12 Infrastructure Train Depot Improve or modify the existing rolling stock depots/stations to minimize investment and optimize freight movement - Train Depot would be served as DC : Incoming, distribution/transshipment, delivery (outgoing) no need of stack & storage areas 12

13 Infrastructure Stations Improving the existing rolling stock depots/stations to minimize investment and optimize freight movement - Station would offer last delivery service based on customer s needs - prepare freight service area in stations Type A Type B 13

14 Rolling Stock Train Modify the existing rolling stock to accommodate freight for transportation - Loading / unloading and storage in the train should be done automatically 14

15 Delivery to Customer Details Delivery system from urban stations to final destinations e.g., retail stores and customers - Use of small motor cars and electric carts - Collecting/returning containers from retail stores - Additional services at urban stations : urgent delivery, storage of remaining items within 1-2 days Delivery to Customer Ground Cargo Outgoing Retail Stores 15

16 Concept of Urban Freight System(UFS) 16

17 Business Model Details Business model based on demand survey including analysis of shipper s needs and market research - Analysis of demand for modal shift (from road to railway) Expected cargos Fresh CVS(refrigerated food) Light Home delivery, cloths, other commodities Replacing freight truck-dependent logistics Timely / on-time / fixed quantity distribution On demand Logistics system Urban road transport cannot respond to different hourly demands of convenience stores 17

18 Implementation Strategies Details Commercialization on a step-by-step basis - Phase 1: Providing services on single line without transshipment - Phase 2: Expansion of full networking services through transshipment based on the outcome of Phase 1 Minimizing infrastructure and train remodeling, and increasing the network reliability through fixed train schedule and travel time Phase 1: Single Line operations 18 Phase 2: Integrated operation of routes by transshipment

19 Expected Effects Saving logistics cost by reducing individual freight vehicles Environmental improvement e.g., reduction in CO2 emissions, by cutting down the use of fossil fuels Mitigating urban traffic congestion by reducing truck operations in cities Improving stability and punctuality of urban logistics delivery Development of new underground freight transport market in advance

20 Thank you.