Smart logistics for smart cities

#2 of 7 articles about the electrification of goods transport

“People all over the world believe their cities should be smart and sustainable,” claims the headline of an article published on July 30, 2020. Urbanization is one of the global mega trends. In 2018, 55% of the world’s population lived in cities. This proportion is expected to rise to 67% by 2050, while the world’s population is growing. The number of megacities with a population of more than 10 million may also grow from 33 in 2018 to 43 in 2030. Cities are cultural centers and economic engines. They produce about three-quarters of total global greenhouse gases (GHGs). This is the reason why cities are front and center in the sustainability discussion and debate, i.e. the quest for a better balance of the economic, environmental, and social aspects of life. Cities are a key target when tackling the triple bottom line, i.e. people, profit, and planet.

“Cities are where the battle for sustainable development will be won — or lost if we fail,” said United Nations (UN) Deputy Secretary-General Jan Eliasson in June 2015. The way we deal with our urban areas will largely determine the success of the sustainable development goals (SDGs). The SDGs are the Global Goals, the universal call to action to end poverty, protect the planet and ensure that everyone on Earth can enjoy peace and prosperity by 2030. The SDGs were adopted by all United Nations Member States at the UN Sustainable Development Summit in New York in September 2015 – three months before the Paris Agreement on Climate Change was achieved, in December of the same year.

Building smart cities

“A city is smart when investments in (i) human and social capital, (ii) traditional infrastructure and (iii) disruptive technologies fuel sustainable economic growth and a high quality of life, with a wise management of natural resources, through participatory governance,” describes Deloitte the concept in their report Smart Cities. Smart cities focus on the holistic well-being of citizens. Technology driven solutions help to eliminate the downsides and risks of urban life. Smart cities reduce pollution, GHGs, waste of resources, like plastics and water. “Close to three-quarters (74%) of city officials believe a smart city will attract a highly qualified workforce and provide an attractive destination for startups and established businesses.” This finds a recent research project conducted by the Capgemini Research Institute with responses from more than 300 city officials and 10,000 citizens across 10 countries and 58 cities.

In the McKinsey Global Institute study Smart Cities: Digital Solutions for a More Livable Future we can read that current smart city applications “can help cities make moderate or significant progress toward 70 percent of the Sustainable Development Goals”. The applications “could reduce fatalities by 8–10 percent, accelerate emergency response times by 20–35 percent, shave the average commute by 15–20 percent, lower the disease burden by 8–15 percent, and cut greenhouse gas emissions by 10–15 percent, among other positive outcomes”. Smart city applications include autonomous and electric vehicles, intelligent traffic signals, predictive maintenance of transportation infrastructure, congestion pricing, and real-time road navigation.

Online shopping and declining inventories

Online shopping was becoming an intrinsic part of our modern way of urban life. Covid-19 accelerated the trend. At the beginning of 2020, the online share of grocery sales in the United States (US) was close to 5% and expected to reach around 6% by the end of 2020. Through the pandemic “it now appears that online sales penetration is on track to approach and even exceed 10% as soon as this year.” 

The deliveries that bring goods to the retail stores and supermarkets create a number of challenges, including congestion, noise, emissions, air pollution, and safety. Heavy goods vehicles (HGVs) “were disproportionately involved in fatal collisions with cyclists (63 per cent) and pedestrians (25 per cent) on London’s streets, despite only making up four per cent of the overall miles driven in the Capital,” reads the consultation report Further proposals for a Direct Vision Standard and HGV Safety Permit published by Transport For London. Increasing demand for online shopping driven home deliveries, combined with the efforts to reduce inventories in stores through shorter replenishment cycles cause inefficiencies in form of routes with low load factors and empty backhaul, i.e. return trips. Due to urban congestion, delivery vans and trucks are roaming around looking for parking spaces or blocking sideways and roads to load and unload cargo.

Online shopping is part of the digital revolution. Without logistics, the ecommerce industry would not exist. But opposite to the digital online stores, logistics companies are slow digitizers. Furthermore, logistics and particularly transport belongs to the industries that are the hardest to decarbonize. In urban areas, electromobility is an important part of smart strategies. But electrification is still in its infancy. At the same time, the pressure is rising. According to the World Economic Forum, the “demand for urban last-mile delivery is expected to grow by 78% by 2030, leading to 36% more delivery vehicles in the world’s top 100 cities”.

Smart urban logistics solutions

The Forum report The Future of the Last-Mile Ecosystem analyses 24 interventions, including electric vehicles, parcel lockers and double-parking enforcement that can decrease both CO2 emissions and congestion by up to 30%. A broad range of solutions has been developed. Pilots are underway. Europe leads the pack in smart urban solution development. Cities can pick and choose from a long menu of different types of approaches and solutions. They center around several areas of initiative.

• Collaboration, like LaMiLo, an initiative that addresses last mile logistics challenges, like the lack of public and private collaboration, information disconnects and negative economic and health impacts; other logistics initiatives are C-Liege, CIVITAS and Co-Gistics
• Multimodal transport, for example the use for bicycle logistics offered by large delivery companies and smaller city couriers
• Delivery hybrids, such as locker systems, home parcel boxes, click-and-collect points at subway stations, pick-up-and-drop-off points in stores, and trunk deliveries
• Consignee communication, for instance digital app-based services offering alternative delivery windows and re-routing options to different destinations
• Intelligent traffic and logistics management, based on smart infrastructure and vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication providing services such as prioritization, speed advice and eco-drive support, as well as parking and goods delivery areas information
• Electrification, i.e. the use of electric vehicles and bicycles
• Off-hours operation, including night and weekend services with ultra-quiet equipment and electric vehicles to better utilize infrastructure and flatten the delivery curve
• Micro-depots/hubs, i.e. smaller more distributed potentially highly automated distribution centers in combination with electric vehicles that can drive into the buildings to optimize loading
• Autonomous logistics, like drone and droid deliveries
• Consolidation, which can be supported by software-as-a-service (SaaS) solutions to pool delivery volumes for a certain city area to optimize transport capacity

Above options depend to a large extent on the adoption of new technologies and require some form of collaboration and support from the public sector. Some solutions need cooperation of the citizens too, for example night deliveries. Optimization will bring us only closer to clean logistics but cannot close the entire gap. Significant reductions of carbon emissions require clean power. In the short run electricity seems to be the most viable option for smart urban logistics.

Collaborating towards implementation

Cities across the world are turning smart. Implementing the smart city concept is a multi-stakeholder effort. Representatives from the public and private sector as well as civil society need to come together to develop a shared vision and roadmap. Cities can collaborate to develop “open standards to avoid vendor “lock-in” and to make it easier to share solutions—a community-developed app in, say, Chicago, can then be rapidly deployed in Chengdu and Caracas,” outlines the World Bank’s World Development Report 2016: Digital Dividends. International organizations can facilitate the sharing of solutions and best practices. 

City transport planners, logistics operators, and users of goods transportation services, like retailers and ecommerce players need to come together to raise the understanding around the challenges and the opportunities around smart urban logistics solutions. The World Economic Forum sees “a strong need for city platforms or forums” in which the various stakeholders can explain and exchange the most effective methodologies, report back from successful and failed pilots, interact with businesses and discuss which evolutionary interventions can be implemented now and which revolutionary measures must be prepared to accelerate the implementation of smart urban logistics concepts going forward.A platform is the C40 Cities Climate Leadership Group. The group of 96 cities presents one-twelfth of the world’s population. However, a global platform for medium-sized and large cities able to establish a regulatory framework for technologies that enable smart cities and logistics, like autonomous driving or multi-brand delivery solutions remains to be built. “Luckily, there is a global methodology for calculating and reporting GHG emissions from freight, called the GLEC Framework, which is consistent with the GHG Protocol that many cities and companies already use,” says Sophie Punte, Executive Director Smart Freight Center. The construction of the foundations on which we can establish, strengthen, and expand smart urban logistics solutions, including electric transport is certainly in the making.