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Vietnam

How city logistics is adapting to 21st century life

Many of the winding streets within Europe’s cities weren’t designed with modern logistics needs in mind.


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Many of the winding streets within Europe’s cities weren’t designed with modern logistics needs in mind.

In the age of ever faster and ever more frequent deliveries to homes and businesses, the issue of how to manage increased demand is rising up corporate and city planning and transport authority agendas. Yet while the authorities are seeking ways to improve the overall efficiency of logistics in cities – at the same time minimizing the adverse impacts of logistics activities, particularly emissions and noise – corporates are striving to provide better customer service at lower costs.

And it’s a challenge which is only going to grow in scale. By 2050, the proportion of Europeans living in urban centers is expected to hit 82 percent. “Cities in Europe are growing in economic activity and population, generating more demand for logistics services,” says Jon Sleeman, Director of EMEA Industrial and Logistics Research, JLL.

In cities such as London and Paris, warehouses are spreading to the suburbs, squeezed out of the centre by higher-value uses such as residential development – and increasing the distance that delivery vehicles need to travel to service their customers.

“Emissions and the deterioration of urban air quality are big issues,” Sleeman says. In European cities, urban freight is estimated to be responsible for up to 25 percent of urban transport-related carbon dioxide emissions, and up to 50 percent of other transport-related pollutants.

“The rise of ecommerce – and the huge proliferation in delivery points associated with this – has added to the issue of inner-city congestion, which cause problems with delivery speeds and predictability,” Sleeman says.

Yet the e-commerce last-mile is just the tip of the iceberg for city logistics. Of even greater impact are the demands of the wider urban supply chains – servicing hotels, shops, schools, hospitals and construction sites that require product or service replenishment, and equally crucially, the waste disposal processes that keep cities running.

Multi-storey warehouses

As the stock of warehouse space in central city areas has diminished over time, central warehousing space has become even scarcer, but demand remains elevated.

“In cities where land values are high and corporate demand robust, we’re beginning to see an emerging interest from certain developers in multi-storey ramped warehouses, designed to be shared by multiple companies,” Sleeman says.

These are not an entirely new concept in Europe. For example, Entrepôt Ney and the Pantin Logistique building are two examples in Paris, and both were built in the 1970s.

Such multi-level, shared warehouses are already commonplace in densely populated Asian cities such as Tokyo, Singapore and Hong Kong.

Meanwhile, with car usage falling in many European cities, redeveloping multi-storey car parks could free up space for logistics hubs. “Many car parks are becoming surplus to requirement in cities, as authorities introduce congestion charging or promote public transport usage,” says Sleeman.

In France, the Chronopost delivery service operates two underground facilities in central Paris, one of which used to be a parking garage, allowing the service to reduce mileage travelled, as well as emissions from last mile deliveries.

New delivery modes

One challenge in optimizing city logistics overall is that major cities are serviced by literally thousands of separate supply chains.

“All parties are competing for the same space, access and transport routes, and most activity is concentrated at particular times of day,” Sleeman says. “One idea is whether we can deliver more at night, when these assets are much less utilized.”

Current restrictions on transport and warehouse operation times are designed to limit noise disturbances in residential areas, but that could change with the uptake of electric vehicles – Amsterdam is currently offering privileges to companies that use electric delivery vehicles.

In some cities old methods of goods transportation are also making a comeback. In several European cities, railways are adding much needed capacity to city logistics networks, while relieving road congestion and reducing emissions. In Paris, for example Eurorail is due to start a rail shuttle service this year to a new logistics hub at Chappelle International developed by Sogaris, with XPO Logistics to make onward delivery by environmentally friendly vehicles.

In cities which have developed around rivers, water transport offers another mode of freight transport. Transport by water is a currently underused method in cities, but in London the Mayor has issued safeguarding directions to protect wharves along the River Thames for future freight potential.

Is sharing the future?

Although competition between corporates to provide ever cheaper and faster services is increasing, new shared logistics models are appearing. The ‘mobility as a service’ (MaaS) and ‘warehouse as a service’ (WaaS) models are both enabled by technologies that match demand and supply in real time. For example, Timocom provides online exchanges to bring freight and vehicle space together and to match warehouse demand and supply across Europe.

“The big issue is that overall city logistics may not become more efficient if every business is individually trying to make their own operations more efficient,” Sleeman says.

“A more collaborative approach may be what it takes for greater overall efficiency – and sustainability. The development of ‘mobility’ and ‘warehouse as a service’ models could allow corporates to compete whilst sharing transport and warehouse assets. These represent significant new approaches to logistics in cities.”

Indeed, meeting the demands of modern city logistics requires fresh thinking but creating new delivery models can benefit consumers, businesses and cities alike.

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