1.3 – The Diversity of Urban Freight Activities

Authors: Dr. Jean-Paul Rodrigue & Dr. Laetitia Dablanc

a. Logistics and the Global Urban Landscape

Urban economies are evolving rapidly towards a higher level of material intensiveness as global incomes are rising. Moving freight within urban areas is a common urban transportation challenge that impacts many large metropolises. Such challenges were also prevalent in ancient times. For instance, the Roman emperor Julius Caesar proclaimed in 44 BCE an edict forbidding the delivery of goods in Rome during daytime. It is likely that other cities throughout history were also having similar restrictions, underlining that supplying cities with goods remained an enduring challenge. What has changed is the scale and scope of the problem.

The industrial revolution changed the urban landscape with manufacturing districts and new terminal facilities such as ports, rail yards, and public transit systems. Freight activities were scaled up. From the 1980s, globalism and trade liberalization further expanded freight as an element of the urban landscape by allowing cities in developing economies to further participate in global trade and manufacturing. Containerization had a particularly significant impact on the global freight landscape with intermodal terminal facilities and the associated distribution centers. The latest trend concerns the digitalization of the economy, where e-commerce created an entirely new landscape of urban freight activities.

Freight transportation maintains a set of core relations with urban areas since a city is an entity where production, distribution, and consumption activities are using and competing for scarce land. Two relations are at the core of freight distribution and urban areas; freight land dynamics and freight distribution dynamics:

  • Freight land dynamics. Freight is an activity that consumes a substantial amount of land as an input, particularly at the aggregate level (routes, modes, and terminals). Since a city is at the same time a unit of production, consumption, and distribution, terminal facilities, such as ports, airports, railyards, and distribution centers are particularly large consumers of urban land. Rights of way such as roads, many of which are shared with passenger transportation, also consume a significant amount of land. The amount of land use devoted to freight varies in terms of the socio-economic function of a city (e.g. a service or a manufacturing center) and its role in the global freight distribution system.
  • Freight distribution dynamics. The support of freight as an urban activity relies on distribution strategies, including modal choice, that ensures an adequate level of service so that providers of city logistics are able to meet the needs of their customers. City logistics is commonly known as a “last mile” distribution strategy to ensure that the needs of the urban producer and consumer of freight (e.g. retail) are met.

In urban areas, one of the scarcest resources remains the road, including parking areas. In the central areas of major urban areas, roads can account from 25% of the surface for high-density cities (e.g Paris) to 45% for low-density cities (Los Angeles). Elements of the urban landscape such as commercial districts are important generators and attractors of freight movements. Further, freight distribution is often sharing the same road infrastructure than many passenger transport modes, with their activity patterns corresponding to periods of peaks and troughs. The global urban and economic system has also become functionally specialized, permitting a global division of production and its associated freight volumes.

b. Urban Freight Profiles

A city is supplied by an impressive variety of supply chains servicing a wide array of economic activities such as grocery stores, retail, restaurants, office supplies, raw materials and parts, construction materials, and wastes. Each of these activities is associated with a specific freight profile; the freight that it attracts, consumes and, generates. The level of economic development is linked with the level of urban freight activity as income and consumption levels are interdependent.

Because of the divergence in built environments and the diversity of urban economic activities, each city around the world has different freight transport and logistics activities and levels of intensity. This brings the question about the specific size threshold after which urban freight distribution problems, such as delays and congestion, become more prevalent, which requires a concerted approach. Using the United States as evidence, congestion starts to be a serious issue once a threshold of about one million inhabitants is reached. For cities of less than one million, city logistics is less likely to be a problem and may be localized to specific areas such as the downtown or the port or other terminals areas.

The unique and often non-replicable conditions of each city are influencing the nature and intensity of congestion in its urban freight distribution system. The growth in truck use is driven by economic and operational considerations that tend to be specific to each metropolitan area. A common characteristic of cities in developing economies is that motorized and non-motorized traffic is sharing the same infrastructures, which leads to congestion and vehicle operation problems. The urban environment of many cities in the developing world is characterized by street vending (petty trade) supplying the urban population with a range of basic necessities. This is particularly the case for shantytowns that tend not to be well supplied by formal supply chains and are thus serviced by forms of urban freight distribution about which little is known.

The share of public transit use, land use pattern, and density and income levels are common factors relatively unique to each city. Considering the growing level of material intensiveness related to the functions of production, distribution, and consumption, cities above 4 million inhabitants should have planning and circulation management schemes where urban freight distribution is preeminent. Cities of smaller size can also proactively be involved in mitigating specific and localized urban freight distribution activities.

c. City Logistics in World Cities

The intensity of urban freight distribution depends on local economic, political, geographic, and cultural characteristics, which leads to different objectives, operational conditions, and constraints in urban freight distribution. Even if there is a wide variety of urban landscapes a typology underlines five categories representing city logistics.

  • Large metropolitan areas of developed economies. The logistics organization in such cities involves freight and logistics facilities in dense urban environments where mass retailing prevails. Such cities are usually dominated by the tertiary sector, implying that the function of consumption is more prevalent than production. The retailing landscape is rapidly changing through e-commerce with parcel transport companies providing finely tuned home delivery services or alternative pick-up points using information technology tools. The logistics organization in high-density cities presents several striking features including the integration of freight and logistics facilities in very dense settings. These advanced logistics strategies are being adopted by other high-density Asian cities, such as in Japan, South Korea, Taiwan, and coastal China.
  • Large metropolitan areas in developing economies. Large cities of fast-growing economies have a dual urban freight system. The logistics requirements of a modern economic sector coexist with an informal and largely unrecorded system of pick-ups and deliveries for home-based artisans or street vendors. Poorly maintained roads accommodate a diversity of modes ranging from pushcarts to mopeds, vans, and trucks.
  • Gateway cities. Serving as gateways to import-based consumer-oriented economies, these urban regions concentrate the growth of new freight terminals, serving as distribution facilities for important local markets of urban consumers and businesses, as well as being regional hubs for the grouping and redistribution of goods to regional and national markets. A notable characteristic is a growth in the number and size of warehouse and distribution facilities located at the metropolitan periphery.
  • Adaptive city logistics. Innovative schemes of urban deliveries emerge in many city centers with an emphasis on cleaner and more silent operations and consolidated deliveries. They represent an adaptation of city logistics to punctual circumstances, most of the time in medium-sized cities in developed economies.

The logistical performance of urban freight distribution requires a comparative framework and key performance indicators. However, such a framework does not yet exist, but one has been compiled at the national level by the World Bank; the Logistics Performance Index (LPI). While the LPI reflects global trade and supply chains, it can also be reflective, to some extent, of the logistical capabilities of cities. The national share of urbanization tends to be proportional to the LPI, indicating that advanced economies are urban.

More specifically, world cities have each a diverse array of concerns:

  • Paris aims to limit the environmental footprint of freight distribution so that the quality of life of its residents can be maintained and improved. The city’s status as one of the world’s leading cultural and touristic hub has a notable impact on the strategies and priorities accorded to urban freight distribution to support the city’s image.
  • Mexico City tries to cope with the contradictory demands related to the dual presence of both modern (motorized) and traditional forms of urban distribution in terms of infrastructure provision and regulations. Modern logistics services are as vital to the urban economies of developing countries as are more basic freight activities serving street vendors or home-based manufacturing workshops.
  • Chicago aims at maintaining its role as a major rail hub and freight distribution platform for North America with a concentration of distribution and manufacturing activities. The metropolitan area is the point of convergence of the rail lines of the Class I carriers, but the different terminal facilities are in separate parts of the city and not well connected. This involves truck congestion as containers need to be carried from one terminal to the other.
  • Los Angeles is facing congestion and environmental issues such as noise and air pollution. The city is facing conflicts between its function as a major commercial gateway for the East Asian trade and other functions linked with touristic and cultural activities. Recent initiatives concern trucking associated with the main port facilities as well as nearby major import-based distribution centers.
  • Shanghai has become the largest cargo port in the world and acts as the main transport hub supporting China’s export-oriented strategies. A significant share of the freight circulating within the city is therefore linked with global distribution processes. Rising standards of living imply growing consumption levels and the setting of city logistics challenges common in advanced economies.
  • Istanbul is coping with rapid urbanization and economic growth, along with unique geographical constraints, namely a scarcity of flat land and the division of the city by the strait of Bosporus. Its commercial function is being strengthened by its role as a platform between Middle Eastern, European, and Black Sea commercial interactions. The outcome has been severe constraints for freight circulation in an environment of accelerated economic and urban growth. The city is embarking on large infrastructure projects with a new mega airport and the relocation of manufacturing activities to exurban locations.