This document summarizes research on the success and failure of 10 city distribution center (CDC) cases in European cities. The research involved literature reviews, surveys of experts, and analysis of factors like the type of CDC, stakeholders involved, organization, funding, and accompanying measures. Key findings included that privately organized CDCs with structural subsidies were most likely to succeed, and that location selection and unrealistic participation estimates often led to failures. The document concludes that balancing costs and benefits through different business models may determine whether CDCs can successfully deliver goods in urban areas.

1. To be or not to be?
A typical city distribution centre question!
Research on success and failures in 10 European CDC-cases
Ron van Duin (TUD)
Thanks to Alexander Kloppers
Deurne, 12 – 13 November 2009 Ron van Duin 1

2. Contents
1. History of city distribution
2. Complexity of the research problem
3. Survey
4. Factors that determine success/failure
5. Conclusions
6. Research path
7. Discussion
Ron van Duin

3. So called ‘Veemhuizen’ anno 1913
“Zo oud als de weg naar Kralingen”
• At the edge of town
• Multimodal accessible
• Temporary stock
• Cross-docking
Ron van Duin

4. The last mile delivery
• Environmental friendly
(beside drivers and horses
C02-neutral)
• Collection of return flows
(‘Voddenman’/’Schillenboer’)
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5. Freight flows in towns
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6. entrepreneurs
public services shippers
habitants
constructors
Multi-actor field
consumers
carriers
producers
municipalities
suppliers
provinces Ron van Duin
government
Deurne, 12 – 13 November 2009
offices

7. Problem……..!!!
Instead of
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8. Different policy views on a sustainable city
Accessibility Freight Friendly
Economic growth
Minimal space
Liveability
Coordinated
Sustainable urban goods transport should facilitate a continuing economic growth and meanwhile
protecting the environment and ensuring a better quality of life for future generations (OECD, 2003)
Ron van Duin

9. Potential benefits
(Huschebeck and Allen, 2005):
•Reductions in the number of vehicle
trips.
•Reductions in the number of vehicle
kilometres.
•Better utilization rates for vehicles
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10. Urban consolidation in literature
• Modelling urban freight generation (Ogden, 1977)
• Considerable costs involved with the construction and operation of the transhipments
(Button & Pearman, 1981)
• Urban Goods Movement (Ogden, 1992)
• City distribution centers lead a laborious life (Van Duin, 1997)
• City logistics modelling (Taniguchi et al., 2001)
• Innovation Steps Towards Efficient Goods Distribution Systems for Urban Areas
(van Binsbergen & Visser, 2001)
• The key concept is that the volume of freight vehicles travelling within urban areas could
be reduced through a more efficient utilization of vehicles: higher load factors and fewer
empty trips (Crainic et al. 2003)
• GVZ or freight villages have been popular as real estate sources (Klaus, 2005)
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11. Survey 10 EU cases
3 Successes
Bristol 2004
La Rochelle 2001
Kassel 1994
4 Failures
Leiden 1994
Utrecht 1995
Nuremberg 2005
Malaga 2004
3 Not clear (yet)
Nijmegen 2008
Thun
Siena
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12. Applied Methods
• Literature European CDC
(Morris et al., 1999), (Hesse, 2004) (Köhler, 2004), (Browne et al., 2004),
(Browne et al., 2005), (Patier, 2006), (Marcucci & Daniels, 2008), (Van Rooijen
& Quak, 2009)
• Experts in the field
Name Company name Date Communication
Birgit Hendriks Binnestadservice.nl 15-05-2008 personal
Vronie van Manen Bureau Binnenstad (Municipality of The Hague) 16-06-2008 personal
Tim Hapgood Bristol city council 29-06-2008 email
Magnus Jäderberg Göteborg city council 03-07-2008 email
Jésus Muñuzuri Universidad de Sevilla 03-07-2008 email
Peter Krichel Universität Kassel 08-07-2008 email
Mark Degenkamp Municipality Utrecht 06-08-2008 personal
Rainier van der Kamp Miles Benelux B.V./Allgreenvehicles 29-09-2008 telephone
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13. Evaluation aspects
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14. Comparison (I)
Type of CDC n=10 Organisation n=8
Subsidies I
UDC 8 Public 0
No subsidies 2
Cross-dock 1 Private 4
Local subsidies 6
Co-usage of private DC 1 PPP 4
National subsidies 2
EC subsidies 2
Origin of the initiative n=10
Municipality 6 Funded by Subsidies II n=8
Transportation companies 2 Subsidies 6 One time 3
Private CDC operator 1 Transportation companies 5 Structural 5
Shopkeepers 1 Shopkeepers 1
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15. Comparison II
Accompanying measures n=9 Distribution vehicles n=9
Time windows 5 Conventional trucks 3
Environment zone 1 Electric vehicles 1
Pedestrian only area 3 Carrier cycle and natural gas car 1
Usage of bus lane 1 Combination conventional and
electric 4
No 2
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16. Survey among 7 EU cities
Type of Stakeholder(s) that Organisati Funding Subsidies I Subsidies II Acc. measures Distribution
UCC initiated on vehicles
Success
Bristol UDC Municipality Private Subsidy EC Structural None Conventional
Kassel UDC Transportation Private Subsidy Local Temporary Pedestrian Conventional
companies zone
La Rochelle UDC Municipality Private Subsidy Local Structural Time windows Electric
(agglomeratio
n)
Failure
Leiden UDC Municipality PPP Subsidy EC One time Time windows Conventional and
electric
Utrecht Multiple Municipality Private Transportation - - Time Conventional
UDC companies window
s s, usage
of bus
lanes
Malaga Cross-dock Municipality PPP Transportation Local One time Pedestrian Conventional and
companies zone electric
and subsidy
Nuremberg UDC Shopkeepers Private Transportation - - Pedestrian Conventional and
companies zone electric
and
shopkeepers
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17. Conclusions from the survey
• Ex ante evaluation often too positive
• e.g. number of participating companies
• seldom ex-post analysis
• Private organisation UCC
• All successful UCC have structural subsidies (as
well as local as EC)
• Location of a UCC
Browne (2002) emphasise the importance of
choosing a right location. Evaluations of decision
making on this issue however many cases the
result of what was available at the moment (Hesse,
2004) (Quak, 2008)
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18. Example of commercial feasibility
CDC Den Haag I
Criteria Scenario 0: Scenario 1: Scenario 2: Scenario 3:
Current Full participation, Full participation, Few participants
situation light trucks medium trucks
Vehicle kilometre 0 -2% -8% -0.8%
reduction
Net benefit 0 -/- € 50,577 € 118,083 -/- € 220,040
Service 0 ++ + +
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19. Example of commercial feasibility
CDC Den Haag II
150,000 m3 goods per year means a participation of
approximately 60%
22.00
21.00
20.00
19.00
18.00
17.00
Euro per m3
Benefits
16.00 Cos us light trucks
ts ing
Cos us medium trucks
ts ing
15.00
14.00
13.00
12.00
11.00
10.00
25000 50000 75000 100000 125000 150000 175000 200000 225000 250000
3
m of goods delivered via the UCC
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20. CBA – Unbalanced costs & benefits
based on (Browne et. al., 2007)
COSTS BENEFITS
Supplier
• Not a single “door-to-door” operation • Less time spent making deliveries in cities,
leading to reduced operating costs
• Potential to use time savings to generate additional revenue
Transport
provider
• Security • Routes involving UCCs allow more deliveries per day
• Loss of control over timed deliveries/responsibility • Opportunity for night deliveries
• Perceived increase in damage through extra handling • Helps counter WTD driver shortage
• Additional handling/delivery charges ● Greater efficiency as no time spent slow running in town/parking
problems etc
– could be passed to supplier as “surcharge” • Less slow running = improved fuel usage
Receivers
• Additional stage when chasing missing/late deliveries • Improved delivery reliability
• Fewer deliveries/less staff disruption
• Ability to call-off orders in parts
• Clients able to collect purchases from UCC
• Less storage/more selling space
• Off-site value-added activities
• Improved retailing (street) environment
• Continuous waste removal/recycling
• Clients avoid travelling to store to collect orders – collect at UCC
Local
Authority
• Cost of policing freight movements • Potential licensing revenue
• Fewer delivery vehicles in zone, leading to cleaner air, less congestion,
pedestrian benefits and improved traffic flow
• Potential for alternative fuel vehicles
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21. CBA – Unbalanced costs & benefits II
UCC
Operator
• Multitude of IT & paperwork systems to handle • Profit-making business
but not if UCC is considered final delivery point and
operator has own system to cover the “last mile”
• Timed deliveries – how to service
• Responsibility for identifying
losses/damages at intake stage
Developer
(new retail
sites only)
• Cost of establishing UCC if condition of planning consent • A revenue stream, either if managed inhouse
or additional charge on rent
• More rentable space as result of centralised
receipt point and less “in-store” storage space
• Single UCC makes whole site more attractive with fewer
freight vehicle movements
Ron van Duin

22. Conclusions – To be or not to be??
Towards research of business models
• Collective sourcing of last-mile transport
by joint shopkeepers
Large retailers
• Joint ventures with current
efficient distribution structures ?
Logistic Services Partners
• E-auctions
Duin, JHR van, Tavasszy, LA, & Taniguchi, E (2007). Real time simulation of
auctioning and re-scheduling processes in hybrid freight markets. Transportation
research part b-methodological, 41, pp. 1050-1066.
Ron van Duin

23. So for city distribution centers it means
To be, or not to be: that is the question:
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles,
And by opposing end them?
Ron van Duin