Critical factors for viable business models for urban consolidation centres

Abstract

Although urban consolidation centres (UCC) worldwide have improved urban freight distribution and reduced externalities, other UCC initiatives have not materialised due to, e.g., business model limitations. All the same, researchers have rarely described business model components relevant to city logistics. In response, the purpose with this article is to analyse critical factors for viable business models of city logistics initiatives involving UCCs. Following an extensive literature review and multiple-case study of five initiatives with UCCs, we identified seven critical factors of viable city logistics business models: the ability to scale up and down the UCC solution; an ability to continuously develop and adapt to a dynamic environment; the important entrepreneurial role of the initiator as well; the acknowledgment of society; ability to innovate new services; logistics and supply chain management competence; and the ability to take full advantage of advanced IT. All seven factors describe continuously redeveloped business models seeking to seize new and unexpected opportunities, yet also indicate that city logistics systems require local authorities and municipalities to act as initiators, enablers, and customers. The models also underscore differences between purely commercial and purely municipal city logistics initiatives.

Literature Review on Success Factors and Methods Used in Warehouse Location Selection

“…The related studies in warehouse location selection literature can be classified as distribution, production and contract type warehouses [1]. Distribution type warehouses; [4], [8], [9], [12], [13], [16], [17], [22], [26], [33]- [35], [39], [41], [42], [44], [46]- [48], [52] are to store various products from different suppliers, and for different customers. Production type warehouses; [5], [7], [20], [23], [27], [29], [31], [36]- [38], [50], [53] are for products with different characteristics in a production facility.…”

“…The methods used in the selection of warehouse location such as multi criteria decision making techniques [5], [10], [15], [18], [21]- [23], [26], [29], [31], [34], [37], [38], [40], [43], fuzzy logic [17], [27], [44], [46], [47], [49], [50], statistical analysis [12], [16], [30], [33], [35], [48], [49], non/linear and mathematical programming [4], [9], [14], [20], [24], [28], [32], [36], [39], [51], heuristic and meta heuristic methods [6], [7], [11], [19], [25], [45] and other decision support systems [8], [13], [23], [41], [42]…”

The Role of ‘Influencers’ as Drivers of a More Sustainable Urban Freight Sector

“…The search for a viable business model has been identified as a significant challenge for companies providing new types of logistics services, such as instant deliveries [12,13]. In addition, research indicates that business models have a potential role to fulfil in relation to the realization of sustainability initiatives in cities, such as joint delivery systems [14] and consolidation services [6,15].…”

“…Urban freight research has recently emphasised the importance of taking business practices into consideration when moving sustainable innovations from a conceptual stage to the market; to execute this research, the business model, which is a comparatively new analytical concept, has been adopted. Research that relies on the business model has been motivated by an ambition to develop a holistic understanding of what inspires businesses to deploy new types of services, e.g., Reference [6], or adopt technological innovations, e.g., Reference [7]. By highlighting the business model, research shifts focus from single-factor explanations, such as pricing, to more complex relationships related to the topics of corporate value creation, stakeholder relationships, and corporate sustainability [8,9].…”

Construction Logistics Solutions in Urban Areas

“…Langley, 2016;Lundesjo, 2011;Sundquist, et al, 2017). One popular suggestion for reducing the impact of urban goods transports has been to employ urban consolidation centres (UCC's) (Allen, et al, 2014;Björklund, et al, 2017;Browne, et al, 2005). By consolidating goods from multiple suppliers into one shipment, the amount of goods movements within cities can be reduced (Browne, et al, 2005;Gammelgaard, 2012;van Rooijen and Quak, 2010).…”