Urban supply chains and transportation policies 1

For a firm the logistics challenge consists in the integrated planning, control, realization and monitoring of all internal and network-wide material, part and product flows, including the necessary information flows, for the purpose of satisfying customer needs and realizing a profit. For a system of firms, the term supply chain is used to identify a system of activities, people, technologies, information and resources targeted at transferring a product or a service along the entire chain: from the provider of raw materials to the end customer. As most end-consumers are located in urban areas, a supply chain does include a distribution system to deliver the goods in that complex environment that is a town or a city. Since supply chain decisions are typically taken in order to achieve commercial efficiency disregarding wider environmental objectives, city authorities need to reconcile the conflict between the private objectives and the social ones. The paper has tried to contribute to the existing literature on this topic by: a) characterizing the urban supply chains (USCs); b) discussing how a USC can be modelled, which role do actors play and how the coordination issue can be handled; c) showing how transport decisions, in particular whether to use ownaccount or third-party transport operators, are dealt within each USC and by each actor; d ) and analysing how USCs are affected by the many proposed freight transport policies. 1 This research was supported by the University of Trieste grant “Finanziamento per Ricercatori di Ateneo”. 2 1 Urban freight distribution as an urban supply chain issue In order to analyse the impact of transport policies on urban freight distribution we propose in this paper to adopt a supply chain approach. For a firm the logistics challenge consists in the integrated planning, control, realization and monitoring of all internal and network-wide material, part and product flows, including the necessary information flows, for the purpose of satisfying customer needs and realizing a profit. The main fields of the logistics activity can be broken down into; procurement logistics, production logistics, distribution logistics, after sales logistics and disposal logistics. The more complex the firm structure (in terms of number of manufacturing plants and warehouses), the greater the difficulty of efficiently managing its logistics, particularly when its components of the chain are operated by third-party firms. For a system of firms, the term supply chain is used to identify a system of activities, people, technologies, information and resources targeted at transferring a product or a service along the entire chain: from the provider of raw materials to the end customer. Supply chain management 1 is the term used identify the set of issues and techniques involved in a supply chain. As most end-consumers are located in urban areas, a supply chain does include a distribution system to deliver the goods in that complex environment that is a town or a city. In this paper, we use the term urban supply chain (hereafter, USC) to identify that part of a supply chain in charge of delivering the goods to an urban area. Since supply chain decisions are typically taken in order to achieve commercial efficiency disregarding wider environmental objectives, city authorities try to reconcile the conflict between the private objectives and the social ones. The branch of science dealing with these issues has been called city logistics. The efficient and effective performance of the USCs is crucial for the attractiveness and competitiveness of a city. However, because of its complex nature consisting of intertwined actors (producers, wholesalers, transport operators, retailers, and consumers) with possibly conflicting objectives and multiple constraints – and because of the interaction with other urban function such as the residential, touristic, commercial, recreational, educational function achieving a good performance is not an easy task 2 . The need for investigating urban freight distribution from a USC point of view is recognized by several authors. Arunotayanun and Polak (2009, p. 2) write: “Existing approaches to the empirical analysis of freight demand have, almost without exception, ignored the influence of supply chain and logistics concepts and have instead relied to conceptual and methodological approaches developed in the passenger sector. Little attention has been paid either to characterising the actual behaviours of freight agents in this evolving 1 Gibson et al. (2005, p.) state: "Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. importantly, it also includes coordination and collaboration with channel partners, 'which can be suppliers, intermediaries, third-party service providers, and customers. in essence, supply chain management integrates supply and demand management within and across companies. " 2 Since in an urban setting the relevant infrastructures and agent behaviors interact in especially complex and important ways, Friesz et al. (2011) models such interaction as a dynamic noncooperative Nash game and highlights that the performance of any aspect of the urban supply chain depends on the performance of the rest of the supply chain.