Tackling Fragmented Last Mile Deliveries to Nanostores by Utilizing Spare Transportation Capacity—A Simulation Study

Bram Kin, Tomas Ambra, Sara Verlinde, Cathy Macharis
2018 Sustainability  
Last mile deliveries in urban areas cause a disproportionate unsustainable impact, while it is also the most expensive part of the supply chain. This is particularly true for freight flows that are characterized by fragmentation. Logistically, this becomes apparent in vehicles that are driving around with a low vehicle fill rate, leading to the unnecessary presence of freight vehicles in our cities. This study focuses on the operational feasibility of utilizing the spare transportation capacity
more » ... sportation capacity of a service-driven company as a potential solution to supply small independent retailers, or nanostores. The aim is to reduce inefficient vehicle movement. Based on a real-life implementation, we use SYnchronization Model for Belgian Inland Transport (SYMBIT), an agent-based model, to simulate various bundling scenarios. Results show the total vehicle kilometers and lead times to supply nanostores for the service-driven company to serve its customers. There is a potential to utilize spare capacity to supply nanostores while maintaining a decent service level. The number of vehicle kilometers driven highly depends on the location of the distribution center where the service-driven company operates. Based on these results, the conditions that have to be met to replicate this solution in other urban areas are discussed. 2 of 15 minimizing its environmental and societal impact as well as delivery costs. Cleaner vehicles can be deployed [9] , but this does not necessarily reduce congestion. A major inefficiency in last mile transport is the low vehicle fill rate (VFR), and even empty running of freight vehicles [10, 11] . Fragmentation and lack of consolidation in last mile deliveries are important contributors to this inefficiency. They are caused by small drop sizes, low inventory levels, many stops, high delivery frequencies, just-in-time deliveries, and tight delivery windows [8] . The fast growth in the number of home deliveries is an example in this regard. These fragmented freight flows should get the most attention when attempting to make the supply of goods in our cities more sustainable. While initiatives to improve the efficiency of home deliveries to consumers are increasingly being implemented (e.g., [12] [13] [14] [15] ), other inefficient vehicle movements are largely unnoticed. This work studies freight vehicle movement to small independent retailers, or nanostores [16] . Their different supply models are characterized by fragmentation and have not been studied extensively [17, 18] . Small volumes, such as those delivered to nanostores, are suitable for delivery concepts that use spare transportation capacity in vehicles that are driving around anyway. This spare capacity can be found in passenger cars, public transport, and other transport modes where capacity is shared by passengers and freight [19] [20] [21] . There is also spare capacity in vehicles used by service-driven companies in cities. These companies have daily delivery and/or service trips, but load optimization is not a priority. The ones that are doing deliveries are contractually obligated to execute specific delivery routes, regardless of whether they are fully loaded. Companies that make service trips focus on transporting people that provide certain services (e.g., cleaning windows) and the equipment they need. Trips by service-driven companies are difficult to capture in numbers but form a significant part of traffic [1, 22] . We claim that it is operationally feasible to use the spare capacity in vehicles of service-driven companies for efficient last mile nanostore deliveries, without decreasing service levels for the companies' regular customers. It can reduce inefficient store owner pickups, which would contribute to decreasing the negative side effects of urban freight transport if transport between distributor and distribution center (DC) is done in a consolidated and efficient way. Research is based on an implementation that took place in the Brussels capital region (BCR) in 2017 (citylab-project.eu). Based on the results of this small-scale implementation, we use an agent-based model, SYnchronization Model for Belgian Inland Transport (SYMBIT), to simulate a large-scale implementation with various bundling logic scenarios for the utilization of spare capacity within geographical clusters [23] . Section 2 presents the background for our research, consisting of the supply of nanostores (Section 2.1), the presence of service vans in urban areas (Section 2.2), and a description of the implementation in Brussels (Section 2.3). The model and its application are explained in Section 3. Section 4 presents the results, which are discussed and summarized in the two last sections. Background and Literature Nanostore Supply Nanostores are independent retail outlets (e.g., traditional retailers, convenience stores) that sell fast-moving consumer goods (FMCG). Nanostores are highly diverse in form but have one similarity that differentiates them from organized modern retail chains such as 7-Eleven and Carrefour: independent ownership [24] . Demand is often lower in terms of quantity, but above all, logistics are more fragmented. Modern retailers mostly rely on distribution centers (DCs), cross-docks, and third-party logistics (3PL) providers. Products from different manufacturers are bundled and delivered in a consolidated way, often in full truckloads [4, 16] . Supply models for nanostores are inefficient, which is primarily caused by the small size of these stores and the lack of a storage room. This means that if a product is not on the shelf, it is out of stock, which subsequently leads to continuous inventory replenishment [25] . Globally, there are an estimated 50 million nanostores, of which the majority are located in emerging market economies [24, 26] . It has been argued that
doi:10.3390/su10030653 fatcat:o354xur435f3phkiqzfs3k4ema