On the Edge of Sustainable Urban Freight Distribution: Research on the Diversity of Perspectives Towards Urban Freight Consolidation

In order to find a solution for the negative externalities that come along with the urban freight demand due to increasing residents in urban areas a previous thesis of Roger Peters (2012), about the impact of municipal decisions on the city distribution system of Breda, concludes that road pricing together with the availability of an urban consolidation centre (UCC) is the best solution to create ideal conditions for scalability of bundling and reduce vehicle kilometres. The thesis falls short in the way it needs to be implemented and the consequences of the interventions in normal activities of the many stakeholders involved. Therefore, one of the recommendations made by Peters is to investigate what the effects are and whether this generates the shift that is intended. Because stakeholder participation in scalability is found very important, the challenge lies apparently in the identification of the variability in perspectives of stakeholders in the urban freight system and exploring how these can be served better with regard to scalability of urban consolidation concepts. Therefore this thesis explored the perspectives towards urban consolidation in order to reach the intended scalability of urban consolidation initiatives, by trying to give an answer on the research question “How can one deal with the diversity in perspectives towards urban consolidation, in order to achieve scalability in terms of enough volume, stakeholder participation and applicability to different environments? ” In a literature review it is identified what already have been explored in this area in order to search for a method that is suitable for exploring the perspectives. The methodology that is identified as most suitable is Q methodological research. This method uses empirical evidence gathered from the whole urban freight domain without demanding a hypothetical direction, what results in a more comprehensive method with shared perspectives as outcome. However, Q methodological research requires a scientific framework together with interviews among important stakeholder groups to develop a comprehensive framework as input for the Q study, which is the scientific base of the methodology. The framework consists of customer scenarios to identify what the possible design principles are and business model value changes to identify how these principles have impact on the business of stakeholders involved. These principles and business model changes are the input for the Q methodological research. The input for this empirical analysis is statements that are gathered with this scientific base and with the use of expert interviews in addition. These statements were ranked on a scale in relation to each other. This gives a clear view of what respondents find more important in relation to the topic. From the empirical analysis four perspectives were identified. The names of the perspectives are given by the most dominant statements and the most diverging statements that represented that perspective, so that they represent their content. “Steering the traffic market” shows that restrictive measures are in favour, “Transaction cost economics” shows that parties find it too expensive to shift to urban consolidation because high investments, “Start at the parties with resources” shows that some producers provide opportunities for consolidation and “Restrictions are not done! ” presents the lack of support for restrictive measures. Additional factors that were found important are neutrality, product differentiation, positive behaviour rewarding and harmonization between cities. How to deal with these perspectives in relation to the three dimensions of scalability was the main aim in this thesis. In relation to scalability in terms of volume one can best start at shippers. These shippers have the characteristics of large producers with a very differentiated and large product diversity and customers over the whole country so that dedicated or own transport does not have any effect for visibility as their product range is too wide. For other parties, time is an important aspect because of sunk costs and the value of control, visibility and service that is still very high rated at the moment due to the psychological phenomenon ‘justification behaviour’. Logistic service providers are expected to have too high costs to switch when the urban network is still too thin and retailers do not have the resources to make an UCC viable. If restrictions are imposed to contribute to the value propositions of local administrators, then one has to be aware of the effects because government failure lurks. The reasons can be short time horizons and unanticipated effects due to political motivations resp. complex material. In addition it shows that disparities are present between branch organisations and at least a part of the group they represent, what give rise to the question if they should be better linked. Additional services are found not critical and certainly not positive when it adds costs. In relation to applicability to different environments it was derived that system harmonization is important for logistic service providers and shippers in order to prevent that they have to deal with different system interfaces. Different system interfaces will cause that stakeholders are not willing to participate because it is too difficult to adjust to each system individually. IT integration for data communication is very important in the logistic chain. In this way products can be traced and responsibilities can be factored in. Also nation-wide coverage is necessary to assure before efficiency improvement can be guaranteed. This is still not the case and can be referred to as the ‘not invented here syndrome’. Even now certain psychological frameworks are discovered and confirmed in the urban freight dialogue it shows to be very limited what Green City Distribution can bring about in relation to their resources. However, it is important for them to focus on the group of shippers that is aware of the efficiency increase that comes along with urban consolidation if there is enough volume. They have to start at parties that do not have own or dedicated logistic activities, but use the open network. Besides, these parties should be large enough to generate volume. These shippers have the characteristics of large producers with a very differentiated and large product diversity and customers over the whole country so that dedicated or own transport does not have any effect for visibility as their product range is too wide, for instance P&G and Unilever. Because a lot of parties have a negative perception towards urban consolidation it is important to communicate the results of this research to make them aware of the fact that cost efficiency can be reached if parties work together and generate volume. The results of a Q study are very suitable to do so, because stakeholders can identify their selves with the explored ones. For UCC development in general it is advisable to collaborate together with other existing UCC initiatives. In this way a nation-wide coverage can be assured much faster and stakeholders engage earlier when systems are the same, for this they have to break through the ‘not invented here syndrome’.