**Logistics Hubs for Zero-Emission Urban Distribution**
**Theme:**
- Societal Impact
- Urban Mobility and Living Environment
**May 25, 2023** TNO (read the original (Dutch) text here)
Today, 2024 this vision became reality by Qonnected Logisitcs.
QUOTE TNO 2023
Nearly thirty major cities are planning to gradually ban fossil-fuel commercial vehicles starting in 2025. This will be implemented through so-called zero-emission zones, defined as a measure in the national Climate Agreement to reduce CO2 emissions from commercial traffic (vans and trucks) by 1 million tons.
**White Label Hubs**
This is causing significant concern and objections among transporters and other businesses. They see no realistic chance of electrifying all their own transport and are sounding the alarm. They overlook the fact that mere electrification is not a solution to the congestion, delays, and safety issues in increasingly crowded cities that need to remain both supplied and livable. Yes, more electric vehicles in the city will help, but other operational methods, including the use of urban consolidation centers—so-called 'white label' hubs—can also make a significant contribution to all three issues: fewer emissions, fewer vehicles, and more efficient movement of goods and services in cities with less disturbance and safer traffic as potential added benefits.
The idea is that carriers can use zero-emission transport services from a hub on the city outskirts. This way, individual carriers do not have to deploy battery-electric vehicles themselves for future zero-emission zones.
From the city's perspective, hubs seem to be the way to optimize urban supply and thereby improve livability. The assumption is that many distribution vehicles inefficiently enter and exit a city, resulting in more vans and trucks in cities than necessary. By consolidating different logistical flows at the city’s edges into hubs, fewer vehicles would be needed to transport the same volume into and out of the cities.
Despite positive findings from studies on hubs, hub solutions have not yet been widely implemented. In several studies, we explored various aspects of the urban logistics hub. How can hubs be optimally deployed and what are the prerequisites? We examine questions such as who hubs are a solution for, what value and functions they provide, where hubs should be located, and what developments we can expect in the coming years.
**Efficiency in Logistics Services**
When it comes to the expected positive effects of a hub, the focus is often on optimization from the city's perspective rather than from existing logistics chains. It is assumed that logistics providers do not organize existing flows efficiently because they do not fully 'fill up' a city. However, discussions with logistics providers reveal that most do indeed organize logistics as efficiently as possible within their existing constraints, such as time windows and commercial agreements.
Nevertheless, the sum of all these efficient urban logistics trips does not lead to an optimal solution at the city level. For efficient logistics, the city’s interests often do not align with the interests and possibilities of logistics providers. Additionally, it must be noted that the majority of business vans—which will eventually need to be emission-free—are not primarily used for delivering goods but for services; think of construction vans, plumbers, and a broad spectrum of SMEs such as local wine merchants.
To successfully scale hub concepts so they benefit both urban livability and offer added value to users, two crucial pieces of the puzzle are: what value does it provide to a customer, and what can a government do?
**Logistics Planning and Urban Prerequisites for Logistics Hubs**
**Logistics as a Spatial Issue**
The introduction of zero-emission zones, urban densification, and emphasis on livability are making logistics a higher priority for policymakers. Moreover, infrastructure is decreasing due to a stronger focus on active mobility, which increasingly excludes cars from the city. This makes the presence of logistics vehicles in the streets even more apparent.
While many alternatives for personal mobility (such as shared mobility and improved cycling infrastructure) are being developed, there seem to be few alternatives for logistics. Part of the volume can be delivered (after transshipment at hubs) with cargo bikes and light electric vehicles, but for many large logistics volumes, such as supplying stores and construction sites, and waste collection, trucks are often the most efficient. However, this does not mean that urban logistics cannot be improved.
For cities that are becoming increasingly inaccessible, it is important to 'decouple' or bundle logistics around the city. This makes logistics a spatial issue in addition to a traffic issue from a policy perspective.
For the Municipality of Rotterdam, we used the Decamod toolbox developed by TNO to estimate the space needed for hubs in 2030. This estimate is based on the number of trips that realistically do not need to enter the city (the reduction potential because, for example, bundling can occur). This was based on existing conditions; how accessible the city is, what barriers a carrier experiences, and what value a hub provides to the end (paying) customer.
Depending on the type of transport, it is estimated that the number of van trips (about 12% of total urban traffic) could decrease by around 12%, and for truck trips, this could be around 5%. For determining the space needs for hubs, different types of goods and services flows are distinguished. A hub for fresh goods, for example, has a different space requirement than a Park & Ride for vans (from the construction and services sector) or a construction hub. It is therefore also important that such hubs are developed at the right locations with the right functions.
We see an increasing focus on how logistics can be spatially integrated into cities. This is an important development. We have addressed the spatial integration of logistics in new area developments in various studies in CILOLAB (City Logistics Living Lab). By incorporating logistics facilities such as microhubs, package lockers (in mobility hubs, parking garages, and apartments), and indoor loading areas into the design, the dwell time and disturbance of logistics vehicles can be significantly reduced. Now and in the future, as spatial plans determine the space for logistics in cities for the coming years.
**Hubs Have a Regional Character**
In the past, logistics real estate often served a (inter)national market, but today we also see more regional hubs. Many logistics hubs are increasingly used as urban distribution centers, especially due to the rise in home deliveries of both packages and groceries. For example, consider the sorting centers of package delivery services and the local hubs of various grocery delivery services, or the darkstores from which rapid delivery services reach further into neighborhoods. These are not 'white-label hubs,' but 'dedicated' hubs functioning within a logistics network used and optimized by a single company.
Regional logistics providers sometimes collaborate to also utilize each other’s distribution centers. An example is the Transmission network where carriers outsource loads to each other. For instance, transport company Bode Scholten has saved approximately 56-63% in driven kilometers and 71-76% in CO2 emissions through network collaboration.
Some (local) governments and institutions use their market role as major buyers to encourage the development of a city hub through procurement conditions, acting as a 'launching customer.' The idea is that this makes it easier for the hub operator to offer city hub services to other customers. TNO is also involved in this in The Hague.
**Value Creation for Various Users**
The prerequisites from cities are a crucial part of the puzzle for achieving more city-oriented consolidation. Currently, hubs often provide limited added value in existing logistics chains; merely transshipping goods for consolidation does not offer a proposition for shippers, carriers, and receivers (especially if it also incurs costs). Such locations need to be developed (multifunctionally) to offer broader services to users in the future. There must be a reason for potential users to establish themselves at a hub location and/or use the services offered.
Users are not only carriers but can also include energy providers, catering companies, and various types of shippers. This allows for various activities at a hub location, such as processing return flows, cooking (after which prepared meals are bundled and transported), and local energy generation with charging infrastructure and smart charging strategies for zero-emission urban logistics. The value created depends on the business segment; from fresh and package deliveries to construction and service logistics. Estimates show that up to 70% of business vans in cities are primarily in the construction and services sectors.
**Emissions-Free Transport**
At CILOLAB2, we are addressing questions related to (company-specific) opportunities and propositions that a hub offers to organize urban logistics differently and enable zero-emission transport. We are also examining the policy and spatial conditions that can stimulate the use of hubs.
**Last Mile Delivery**
In the coming years, it is crucial that the demand for and supply of specific urban logistics—or 'last mile'—services increase so that it can genuinely contribute to fewer logistics vehicles and fewer emissions in the busy and crowded city of the future. Hubs must be developed with user value in mind. There is no one-size-fits-all hub with services that will work everywhere. A 'dedicated' hub, for example, also offers consolidation potential, while hubs can be applied on different geographical scales—from large multifunctional hubs to microhubs deep within the city.
We must continue to piece together the different puzzle pieces, seeking workable solutions that offer both a proposition for businesses and benefit the livability of cities.
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