German research: scenarios to avoid the Wild West in city logistics

City logistics is fundamental to the supply of goods in cities and central to the quality of life of the people who live there. As the rapidly growing scale of urban logistics increasingly brings into conflict the sometimes complex demands of different stakeholders (city authorities, logistics companies, retailers, and citizens), the call for action is getting louder.

Four key trends influence urban logistics today: urbanization, e-commerce, growing consumer demand for a faster and more individual delivery service, and retailers placing orders for smaller quantities and expecting more flexible delivery. These trends have a serious impact, and not just for the logistics industry. They also affect the people who live in our towns and cities, for instance, increasing traffic congestion and reducing air quality.

The question cities face is how to make the evolution of urban logistics sustainable and who will take the lead in this process. Will it be logistics companies or the city authorities themselves, or will it come down to close alignment between the private and public sectors?

Seeking constructive ways to resolve these issues, the study Urban Logistics 2030 in Germany by BVL and Roland Berger offers no simple solutions but outlines four scenarios.

1. The Wild West

Increasingly, Logistics providers compete to win customers by developing innovative delivery concepts. Since commercial logistics is not highly regulated, innovative providers have no difficulty entering the market.

2. Regulated diversity

The city defines and monitors a regulatory framework to manage urban logistics traffic more efficiently and reduce traffic volume on the roads. Strong competition between providers precludes cooperation and prevents the introduction of standards.

3. City-wide platform

All urban delivery capacities run on a single platform operated by the city or privately based on a license. The platform pools the flow of goods across all providers and uses decentralized warehouses to optimize last-mile deliveries.

4. Coexistence of giants

A small number of large, competing platforms emerge that dominate urban logistics. With rising user numbers and an increased volume of deliveries, the platforms can pool logistics traffic more efficiently.

Avoid the Wild West

While the outlined scenarios illustrate the long-term perspective, we believe it’s crucial to start laying the groundwork now to shape the urban logistics of 2030. It should be the shared aim of city authorities and businesses to avoid a Wild West scenario because abandoning all concepts of network efficiency will bring a massive increase in urban traffic volumes coupled with further obstruction of the flow of traffic.

Some ways in which this could be done include taking steps within the city to create and approve a regulatory framework for urban logistics (regulated diversity), introducing integrated management of logistics traffic (city-wide platform), or promoting consolidation around a few platforms (coexistence of giants). To avoid further deterioration of quality of life in our growing cities, all stakeholders must engage in or step up the dialogue.

Source: Roland Berger

Picture: Roland Berger

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Walther Ploos van Amstel  

Passie in logistiek & supply chain management

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