City Logistics Research: A Transatlantic Perspective (2013)

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1Welcome and Introductory Remarks Robert E. Skinner, Jr., Executive Director of the Transportation Research Board of the National Academies in Washington, D.C., opened by not- ing that this symposium was the first of four planned symposia to encourage research collaboration across the Atlantic. Cultural similarities and similar states of industrialization bring common transport problems for both sides. The United States could take more advan- tage of innovations in other parts of the world, he said, and researchers could collaborate much more than they are. Institutional collaboration has been missing but is now being seen between the U.S. Department of Trans- portation (U.S. DOT) and the European Commission. He indicated that this symposium was made possible by institutional support from the U.S. DOT through the Research and Innovative Technology Administration (RITA) and the European Commission. Skinner posed the framing questions that set the stage for the next two days: • What are the best opportunities for collaboration and • How should that collaboration take place? This series of symposia will address those questions by taking researchers from both sides of the Atlantic to discuss specific topics over two days of intense informa- tion sharing, with the opportunity for follow-on collabo- ration at the project or institutional level. C. Michael Walton, Professor of Civil Engineering at the University of Texas, Austin, explained that the members of the EU-U.S. planning committee focused on research opportunities that sponsoring entities could pursue in collaboration, identifying critical research objectives and promoting collaborative research. Alessandro Damiani, Head of Unit, Horizontal Aspects of the Transportation Directorate, Directorate–General for Research and Innovation of the European Commis- sion in Brussels, Belgium, explained that the initiative is an experiment, noting that the topic of city logistics is a difficult one. In Europe, more than 70% of the popula- tion lives in cities, and the EU has the ambitious objec- tive of a 60% reduction of CO2 transport emissions from 1990 levels by 2050. Achieving this goal will require a series of articulated strategies of policy, legislation, rec- ommendations, good practices, and research efforts on technology, as well as the softer side of organizational and behavioral changes. In short, research has a key role to play, and much can be done by working together across the Atlantic. Kevin Womack, Associate Administrator in the Office of Research, Development, and Technology of RITA in the U.S. DOT in Washington, D.C., commented that opportunities could be gained from the synergy and col- laboration among researchers from the United States and Europe.

2Presentation of Commissioned White Papers Alan C. McKinnon, Kühne Logistics University, Hamburg, Germany Genevieve Giuliano, METRANS (National Center for Metropolitan Transportation Research) and University of Southern California, Los Angeles, California, USA Laetitia Dablanc, French Institute of Science and Technology for Transport, Development, and Networks, Paris, France Michael Browne, University of Westminster, London, United Kingdom Anne V. Goodchild, University of Washington, Seattle, Washington, USA IntroductIon Alan C. McKinnon Alan McKinnon opened the first formal session of the symposium, which was the presentation of the two commissioned white papers. The white papers, which review the state of research on city logistics, were each authored by a pair of researchers, one American and one European, to gain a transatlantic perspective. The white paper by Laetitia Dablanc and Genevieve Giuliano identified the problems and initiatives that have been tried in the area of city logistics, analyzing them for their transferability. The second white paper, by Michael Browne and Anne V. Goodchild, focused on methods and modeling. ApproAches to MAnAgIng FreIght In MetropolItAn AreAs Genevieve Giuliano and Laetitia Dablanc Genevieve Giuliano began the presentation by point- ing out that cities around the world are grappling with “the urban freight problem.” The basic fact is that freight works: the system is effective and flexible, but at the expense of cities. The coauthors’ review of extant freight research found many strategies and experiments, but strikingly little systematic research. The purpose for this white paper was twofold: first, to consider the effectiveness of the strategies attempted and to analyze them for applicability in the United States and the EU; and second, to identify opportunities for collaborative research. The Urban Freight Problem Giuliano explained the nature of the urban freight prob- lem. To begin with, the amount of freight flows in cities has been increasing as a result of a variety of factors, the first of which is population and employment growth. The second factor is globalization, which has increased freight flow because production is being distributed across multiple locations around the world rather than remaining local. Third, customers have demanded an increased variety of products while at the same time stores are stocking less inventory, which means that more frequent deliveries must be made to replenish that inven- tory. Fourth, logistics facilities have decentralized, with storage and distribution centers moving to the periphery of a city in response to high land costs within the city. As a result, freight must be moved into the city to reach urban consumers. Finally, increased online shopping is generating more freight movement directly to individual homes rather than in bulk to store locations. Taken together, this increase in freight movement has led to congestion, parking, and circulation prob- lems in cities, as well as a range of other externalities. Road capacity within cities is limited, as are the number of parking spaces and loading facilities. Each of these resources (roads, parking, and loading facilities) com- petes with passenger flows. As a result, the public has

3presentation of commissioned white papers demanded time or route restrictions to be imposed on freight flows, and local ordinances have been issued as the problems have worsened. Indeed, as Giuliano noted, the growing freight prob- lem has led to larger and more concentrated impacts. Scale economies enable larger facilities, logistics clusters, and freight hubs to be more efficient. But these hubs cre- ate concentrated impacts at the periphery of metropoli- tan areas. A striking result is that planners who promote smart growth and sustainable city practices end up in conflict when placed in a larger urban context. If urban planning prioritizes car traffic, the movement of freight can be constrained. Yet urban planners and local governments and authorities actually have limited control over the issues. Giuliano pointed out that freight “has no borders” in the global economy. Producers are often hundreds or thousands of miles away, which means that freight trav- els long distances through multiple jurisdictions. Local authorities can impose parking regulations, but they can- not regulate demand, so their ordinances ultimately are not as effective as intended. Increased urban freight has led to increased air pollu- tion and greater energy consumption, Giuliano added. Fuel efficiency and emissions improvements for trucks have lagged behind cars. Older, more polluting vehicles are used in urban deliveries and drayage. Ocean trans- port is often not under any jurisdiction, and rail is pro- tected by the Interstate Commerce Clause of the U.S. Constitution. All of these factors negatively affect city noise levels, livability, and the safety of citizens. Assessing the Effectiveness and Applicability of Solutions The coauthors applied four assessment criteria to evalu- ate the effectiveness and applicability of solutions pro- posed to address urban freight problems: 1. Were intended objectives achieved? 2. What were the costs, and who paid? 3. Were there any unintended consequences? 4. Was there any evidence of net benefits? The coauthors applied a different set of four criteria to assess the applicability of the solutions to other locations: 1. Could the solution be implemented and have an effect in the short to medium term? 2. Was the solution transferable to other metro areas? 3. Was the solution consistent with U.S. or EU regula- tory policy and authority? 4. Could the solution be scaled to broad implementation? Four Solution Categories The coauthors next assessed possible solutions in four urban freight problem categories: metro core, environmen- tal mitigation, metropolitan flows, and freight hubs. The first set of solutions they analyzed related to the metro core, namely the “last mile” of delivery (and “first mile” of pickup), both commercial and residential. This last mile is fraught with inefficiencies. Vendors delivering to estab- lishments make many small deliveries and face restrictions on routes they can travel and times during which they can travel. For example, there are often prohibitions against nighttime deliveries due to the noise generated by such deliveries or pickups. Home deliveries are even worse in terms of the small size of the delivery, the dispersed loca- tions, and the risk of failure if the consumer is not at home to accept the shipment. A final inefficiency is due to lack of parking or loading spaces, which leads to energy-wasteful cruising or congestion-causing double-parking and idling. The greatest problems are in dense city cores. Metro Core Strategies The coauthors identified five strategies intended to miti- gate the problems of the metro core: parking and traffic regulations; local planning policy (such as building codes that require off-street parking or curb space); off-hours (out of hours) deliveries; negotiated programs between industry and the public sector, such as being able to do off-hour delivery (if the delivery does not make noise); and consolidation, in which small deliveries from many ven- dors could be consolidated to move all deliveries at once in full trucks and reduce overall truck vehicle miles traveled. The most effective metro core strategies were local planning policy, off-hours deliveries, and negotiated pro- grams. Traffic and parking regulations were of medium effectiveness (because they can only zone out goods move- ment), and consolidation had the lowest effectiveness. All strategies had high applicability in both the United States and EU except off-hours deliveries (which the coau- thors ranked as being of medium applicability) and con- solidation, which they ranked as having low applicability in the United States and only medium applicability in the EU because of the required actions that industry must take to make this strategy effective. To date, vendors have been reluctant to consolidate their deliveries with other vendors. Of these five strategies, Giuliano believes that negotiated programs have the most potential to transform city logistics. Environmental Mitigation Strategies Next, Giuliano discussed assessments of strategies aimed at reducing environmental impact. Such strategies are

4 city logistics research: a transatlantic perspective important, she noted, because trucks account for 80% to 95% of all nitrogen oxides from freight transport in the United States and 50% to 95% (depending on the presence of ocean vessels) of all particulate matter with a diameter of 10 micrometers or less (PM10). In Europe, freight transport accounts for 25% of green- house gases and 50% of PM10 from urban traffic. Public health problems can occur in areas with a high concentration of logistics activities, namely urban high- ways, ports, intermodal facilities, and logistics clusters. These “hot spot” areas pose a disproportionate expo- sure to cancer risk. The coauthors examined five strategies aimed at reducing environmental impact. Of these, truck fuel effi- ciency standards and emissions standards such as corpo- rate average fuel economy standards were found to be the most effective and the most applicable on both sides of the Atlantic. These strategies were effective because they were applied on a systemwide basis and thus gener- ated large benefits. In contrast, low-emission zones limit polluting vehicles from entering a specific area, but those areas are limited in size and thus do not have system- wide impact. Such strategies have high applicability in the EU but not in the United States, where the political structure of local governments makes it difficult to create such zones. Strategies aimed at the use of alternative fuels or vehi- cles such as electric vehicles are not yet prevalent, the coauthors found, but they see broader use of such strate- gies as the technologies become more widely available and at lower prices, perhaps 10 to 15 years from now. Strategies aimed at mandating alternative modes of transport, such as moving to slower but less polluting modes (e.g., from truck to rail), were found to have low effectiveness and applicability because of economic concerns: time is money. The trade-off of using slower modes includes increased handling costs to make these transfers, increased inventory levels, and reduced service quality. The final strategy, community environmental mitiga- tion, was found to have medium effectiveness but was highly applicable in the United States, which has pursued such environmental justice programs more than the EU, where the strategy is of medium applicability. Metropolitan Flow Strategies The third set of strategies the coauthors evaluated tar- geted metropolitan freight flows. Truck traffic affects the entire metropolitan transport system. Trucks contribute disproportionately to road congestion given their size, operating characteristics, and the delays associated with truck incidents. Freight rail also contributes to conges- tion by blocking traffic at rail–highway grade crossings. Of the four strategies aimed at improving metro flows, the authors rated intelligent transportation sys- tems of medium effectiveness and applicability because they are just starting to be applied. The second strat- egy, road pricing, is effective but is hard to implement; thus, it is of low applicability in the United States and of medium applicability in the EU. The third strategy, dedi- cated truck lanes, is of low effectiveness and applicability because these lanes have not been well implemented. The limited productivity of dedicated truck lanes makes them less effective systemwide. Finally, mitigating rail impacts by removing at-grade crossings, such as on the Alameda Corridor in southern California, is of high effectiveness but medium applicability due to the high costs and the question of funding sources. Freight Hub Strategies The last problem area the coauthors assessed centered on freight hubs, which are enjoying increased use because of the advantages of scale economies they offer. But freight hubs concentrate logistics activities in certain gateway areas, causing a disproportionate amount of negative impact in those areas. Freight hubs cause con- cern in Europe because the activity is concentrated in so few places, like Rotterdam, Frankfurt, and Paris. Freight hubs also pose difficult issues because locals do not think they should pay for mitigation efforts. If they suffer due to freight that is on its way to a different city, why should they be obligated to pay? Similarly, railroad companies don’t want to share costs where they receive no benefit. The first strategy to mitigate the impact of freight hubs is that of logistics land use, in which urban plan- ning is applied to logistics, such as urban planners ensur- ing adequate transport access. These strategies are of medium effectiveness and applicability. A second strat- egy, port appointment systems, is of medium effective- ness in smoothing out operations at ports but is of high applicability in both the United States and the EU. Port pricing, in contrast, was found to be of high effectiveness but low applicability on both sides of the Atlantic. Accel- erated truck emissions reductions, the fourth strategy, was found to be of high effectiveness and of high appli- cability to the EU but only medium applicability to the United States. Finally, ocean vessel emissions reductions were of high effectiveness and applicability to all. Overall Findings Giuliano concluded with some overall findings. First, there are many possibilities for managing urban freight better, such as through voluntary programs, local man- agement of the last mile of freight, global emissions

5presentation of commissioned white papers and fuel standards, and effective equipment. Pricing is another strategy, although it is difficult to implement. Technology solutions look more promising for the lon- ger term. The authors also found that the real world was ahead of researchers’ work. Broad implementation of the most effective strategies is a challenge. Institutional considerations are expensive because of limited local and state regulatory abilities, fragmented governance structure, multiple stakehold- ers and interest groups, and the environmental review process. In the United States, interstate commerce pro- tections impede nationwide solutions. Questions also remain about who should pay for implementing these solutions and the sources of public funding. Finally, there are a lack of data and analytical tools to help inform the decisions that need to be made. Recommendations for Research Giuliano recommended three research directions. The first is to document the problem to improve understanding and inform solutions. Documenting the problem requires data on truck and van flows and truck characteristics, data on pickup and delivery characteristics, and compar- ative EU-U.S. analyses. The second area, developing ana- lytical tools, involves developing a full set of analytical tools and better methodologies to predict the outcomes of alternative strategies and to compare policy alternatives. The final area of research would be to systematically analyze the impacts of programs, which would include documenting program costs and outcomes, documenting industry impacts, comparing similar programs that were implemented in different contexts, and understanding the roles of institutions and leadership. ModelIng ApproAches to Address urbAn FreIght’s chAllenges: A coMpArIson oF the unIted stAtes And europe Michael Browne and Anne V. Goodchild Michael Browne and Anne V. Goodchild stated that the purpose of this white paper was to address the use of models to analyze urban freight problems. Specifically, the models analyzed were those applied at the urban or metropolitan scale (as opposed to the national or inter- national scale); concerned with road freight (as opposed to other modes); applied to congestion, air pollution, and energy consumption research; and implemented to sup- port transportation planning. The paper focused on how researchers in the United States and Europe are using tools to support decision making in addressing these problems. The paper examined modeling to address the chal- lenges of two urban freight impacts: • Congestion and urban accessibility; and • Energy use, greenhouse gas (GHG) emissions, and air pollution, which are the most pressing challenges and those most amenable to modeling. Modeling to Address Congestion and Urban Accessibility A significant body of research exists on the first impact, congestion and urban accessibility, but the issue remains a challenge. This work can be grouped into five main solution areas: the scope for rescheduling deliveries, ways to allocate and manage the use of curb space, pric- ing and charging, controlling or altering land use, and consolidation of flows. The models being used to forecast regional travel demand and system performance are still primarily the four-step models originally developed to model passen- ger traffic and later modified to address truck traffic. Truck modeling is less well developed than modeling for passenger car traffic, and there is limited modeling of intermediate facilities and tours. Finally, the models often do not incorporate the second-order effects of con- gestion on demand. Regional planning agencies face challenges of limited resources and training or skills in implementing the mod- els. That is, people who could use or interpret the models are not well trained on the assumptions of the models, which limits their confidence in using the models. Political will to invest in and use the models is another challenge. Goodchild and Browne also enumerated the chal- lenges to current implementations, namely that carrier behaviors, as well as consumer behaviors, are insuffi- ciently represented in the tools currently used. The het- erogeneity of shippers and carriers is another challenge, as are limited data to develop knowledge and design model architecture. Finally, model complexity may work against implementation: complex models may provide a fuller picture but may be harder to implement. Modeling to Address Energy Use, GHG Emissions, and Air Pollution Next, the authors described modeling related to energy use, GHG emissions, and air pollution. They mentioned that transport is recognized as a significant contributor to GHG emissions and energy consumption and that a recent EU white paper called for essentially CO2-free city logistics by 2030, a demanding goal given the limited number of vehi- cle replacement cycles between now and this target date.

6 city logistics research: a transatlantic perspective The authors noted that much research has been done on energy use in general, including an examination of the scope to use alternative fuels and the role of new and improved operational approaches to minimize freight transport demand (e.g., improving vehicle utilization and consolidat- ing flows). Research has also looked at the impact of vehi- cle design (e.g., aerodynamic improvements) and changes to driver behavior and how these could be achieved. In particular, models have been used to explore the consequences of low-emission zones (LEZs) of varying sizes, levels of emission, categories of vehicle included, and so forth. These models led to a decision to make London’s LEZ large, because modeling many permu- tations of zones revealed that a larger LEZ size would be more effective. Models need to estimate existing and future traffic levels (including freight) and arrive at emis- sions estimates based on typical operating patterns. Estimating impacts, such as human exposure to pol- lution, requires detailed population information. Good- child and Browne posed the question that although models may look pretty, are they right? A broad range of data is needed; the authors presented a table depict- ing requirements for data at different levels of granu- larity of geography, time, and network. Although there is constant frustration over a lack of data, some urban freight models can produce useful results with fewer data inputs. A model forecasting 40 years into the future has different data requirements than one forecasting hourly. The authors noted that their white paper includes exam- ples of data sources. In some areas, there is a reasonable amount of data, but in other areas the data are lacking or were collected for a different purpose and thus pre- sent limitations. The authors called for researchers to pay attention to the quality of the data. The authors discussed the strengths and weaknesses of models aimed at energy and emissions reductions. They noted that the models currently used to support plan- ning have significant limitations, such as lacking informa- tion about intermediate locations and delivery–collection rounds. Another weakness is that the models in use are designed for regional-scale analysis, not microlevel analy- sis, making them hard to use at the microstreet level. In addition, validation of the models is often not done or is limited. The authors noted that researchers may validate for one year and then forecast 40 years, during which many underlying patterns of activity, such as retailing, change dramatically. Finally, there is limited evidence that more sophisticated models lead to better planning outcomes. Difficulties in Modeling The authors noted three categories that make modeling to address urban freight challenges difficult. First, the area is complex and rapidly changing. Including the sup- ply chain in modeling is difficult, and new channels such as e-commerce are not easy to incorporate. The num- ber and variety of stakeholders in urban freight adds to modeling complexity, as does the speed of technology development and adoption. The second category is a lack (or limitation) of data, such as on vans or small trucks (as opposed to large trucks) and on vehicle flows (as opposed to product and goods flows). Comparisons are also difficult because of variations in definitions or in national requirements for data collection. The third category of challenge is due to gaps in communication between practitioners and researchers and between researchers involved in urban freight modeling and those engaged primarily in policy and operations. The authors also commented on U.S. and European differences that present challenges, such as infrastructure differences in urban centers. The nature of urban areas has clearly influenced European urban freight research. The idea of transferability is important in Europe, and there has been a recent strong emphasis on multinational coop- eration in EU funding programs. The same cannot be said of U.S. funding mechanisms. Data collection efforts also vary significantly between the United States and Europe. Questions for Discussion The authors closed by noting some important questions for future discussion: • What are the research challenges that limit our abil- ity to solve urban freight challenges? • How do these challenges relate to modeling tools? • Should we build additional behavioral aspects into models? • Do we have sufficient data and knowledge to do so? • Will adding behavioral aspects allow the models to be more policy sensitive? • How can we measure the effectiveness of these mod- els at addressing urban challenges? • To what extent do these tools address the urban freight problems that policy makers are most concerned with? • Does academic research sufficiently capture the key features of private sector activities? • Are academic projects not sufficiently relevant and therefore not considered by policy makers? • Are the data requirements or modeling capabilities too onerous? Suggestions for Research Finally, the authors presented the following list of rec- ommendations:

7presentation of commissioned white papers 1. Conduct a more systematic review of the state of modeling and analytical work with joint support from the United States and Europe; 2. Fund joint projects, especially those that address modeling–policy gap(s); 3. Organize a showcase for examples in which the ana- lytical and policy gap has been overcome (or narrowed); 4. Organize an annual meeting aimed at encouraging European–U.S. cooperation between researchers; and 5. Consider a journal special issue built around the workshop addressing the questions raised by the papers and presentations. dIscussIon oF the coMMIssIoned WhIte pApers José Holguín-Veras asked Giuliano and Dablanc to explain how they defined “applicability” in their paper. Dablanc explained that the coauthors looked at the institutional context as well as the legal context when making their ranking. The coauthors had done such an assessment earlier for a report for TRB’s National Coop- erative Freight Research Program, examining academic as well as technical literature of all the strategies that have been implemented. This is an ongoing process. Holguín-Veras questioned whether road pricing strate- gies were effective. Based on data he and his colleagues collected, road pricing didn’t seem to change behavior much. Giuliano answered that the price needs to be high to achieve a material change in trucking behavior. In the example of PierPASS in Southern California, the price was on the beneficial cargo owner, not the trucker, and it changed behavior, shifting 40% of traffic to off-peak hours. So adjustments in behavior did happen as a result of pricing. A second example is the issue of relative pric- ing inelasticities of different markets, such as between trucking compared with passenger transport. Imposing one price globally across an urban area would deter more car traffic than truck traffic. A pricing scenario that prices everyone on a road would bring some road congestion improvements. Ken Button agreed with Giuliano that pricing strate- gies do work. He noted that trucks will pay more than passenger cars because trucks need to enter the city. Pas- sengers going to the gym or other leisure activity may opt to go elsewhere if the road fee is too high, because the trip is less important and they have other options. The traffic coming into Washington, D.C., is 40% commuter traffic. Reducing the number of people doing leisure activities would reduce traffic congestion. Button added that he wrote a book in 1978 on this topic, and those models still apply. The acronyms have changed, but the models are the same. Environmental issues have become more important now than in the 1970s due to global warming, but even the 1970s had pollution. Button also felt it important to consider pas- senger traffic alongside urban freight traffic, not sepa- rately. Freight terminals in urban areas can generate significant employment and hence commuting trips. He also noted that some of the worst congestion is found around shopping malls. The big issue was not the spe- cific strategy or technique, he said, but the politics; TRB research has not examined the political question much. Browne gave the example that in London, the road charge was £5, and carriers of freight simply increased the price to ship a package by a few pence. On the nature of decision making in cities, he added that there are many solutions, but it is not clear which ones to implement or whether several strategies should be implemented together. Téodor Crainic remarked that the difference between the 1970s and now is that now there is more knowledge about how to optimize and plan routes. In addition, peo- ple worry more about the environment now in ways they didn’t in the 1970s. Crainic congratulated the authors of both white papers for creating such useful papers. He said that the papers examined many initiatives, but that they examined the initiatives separately. In his view, it was important to have a portfolio of initiatives that could be implemented together rather than separately. Dablanc agreed about the need for a comprehensive agenda. It is difficult to manage urban freight because freight demand has increased tremendously. Michel Savy agreed with Dablanc that urban freight flows were growing. He also pointed out that freight hubs result in more remote facilities away from city cen- ters. As a result, the “last mile” becomes the last 20 miles, which is more costly and brings more congestion. Thus, the need to manage urban freight is stronger than before. Currently, experiments have been at the city level, but an industry-scale solution is lacking. Savy noted that Japan may offer some models for how to regulate and optimize the use of public space. McKinnon echoed the idea of looking at examples from Japan. Chris Kozak said that the white papers nailed the issues. He pointed out that although cities are trying to encour- age overnight deliveries and off-peak activity to reduce congestion, other legislation such as the hours-of-service restrictions that will take effect in July are at cross pur- poses because they restrict schedules. Wal-Mart is part- nering with carrier J.B. Hunt to try to counter the new hours-of-service regulation, but that partnership is com- ing too late and the legislation will have a large, negative impact on productivity.

8 city logistics research: a transatlantic perspective Goodchild noted that the motivation for pricing schemes is different now from that in the 1970s. Regions are now looking at pricing mechanisms not because of political will, but because they need to find funding, and these charging schemes would provide funding. Thus, the funding motivations of cities provide an opportunity to implement policies related to urban freight manage- ment. She agreed that hours-of-service legislation adds a complexity that is significant for schedule planning. Giuliano added that hours-of-service legislation is an example of what happens when systemwide effects are not considered. She urged that researchers simulate what inefficiencies might be brought about by a change like hours of service. If researchers could quantify the impacts of proposed changes, better policy discussions could take place.