City Logistics Research: A Transatlantic Perspective (2013)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

50 Logistics Efficiency in Urban Areas Part 2 Birgit Hendriks, Binnenstadservice, Nijmegen, Netherlands Ian Wainwright, Transport for London, United Kingdom Chelsea (Chip) White, Georgia Institute of Technology, Atlanta, Georgia, USA bArrIers And constrAInts Birgit Hendriks Birgit Hendriks began by showing slides in Dutch from Henk Diepenmaat because she wanted to pique attend- ees’ interest about his work. His slides showed freight movements from medieval times. In modern times, she said, we need to solve the col- lateral damage issues of freight movement and need a multiactor process for management. Actors cannot only make decisions within their own systems, because that is only one level. Researchers and companies need to talk to each other and build a new system together. Freight transportation needs to satisfy three needs: to be both effective and efficient but also to take societal needs into account. Thus, Hendriks urged, political actors need to be involved, too, and not just U.S.-EU actors, but other stakeholders as well. Case Study: Binnenstadservice Hendriks described the Binnenstadservice concept, which is a collective warehouse used by small-end receivers, namely small retailers, offices, and cafés and restaurants. These receivers send a change of address to their suppliers, asking that the goods be delivered to the collective warehouse rather than to their individual establishments. Carriers deliver goods to the Binnenstad- service warehouse, regardless of who the individual end receiver is. Binnenstadservice receives the goods, signs the papers, and bundles the goods to deliver them effi- ciently to the individual receivers. The concept is end receiver–driven and was organized bottom up. Reverse logistics are included in the Binnenstadservice service. The service uses clean trucks to make deliveries to the end receivers. The focus is on small volumes that go to many receivers, not full truckloads that would go to one end receiver. Consolidation of multiple end receivers reduces the number of trucks that have to make deliver- ies, and it also reduces the number of trucks that would be associated with reverse logistics. Binnenstadservice began with one city, but the orga- nizers realized that to survive after the subsidy ended, they would need to expand to other locations. Binnen- stadservice is organized as a franchise operation now and receives no subsidies. The next step is to expand to every city in Europe to build a Europe-wide network. The system currently has 1,000 suppliers, 60% to 70% of whom are from somewhere in the EU, so Bin- nenstadservice needs one EU phone number for simplic- ity. For Binnenstadservice to work effectively, all cities have to be accessible in the same way and during the same hours so that trucks can make deliveries anytime. The system would not work if one truck could enter one city but not another. There has to be a spot in every city where a truck can unload. The Binnenstadservice concept operates at three lev- els, with “tree-level coordination” warehouses. At the local level are inner-city service centers that city entre- preneurs use as their delivery address. The consolidation work is done at this level, as small deliveries from dif- ferent chains come together. Thus, the inner-city service

51logistics efficiency in urban areas: Part 2 center coordinates the last mile. At the national level is BS Netherlands. All local service centers use the same information technology (IT) system, particularly for invoices, administration, and financial flows. BS Neth- erlands services the national shippers in their wish to supply their inner-city customers in a sustainable way. Finally, at the European supply chain level, is Eco2City Europe. The goal of Eco2City is to connect every city in Europe through one European platform. BS Netherlands is now working with Citydepot Belgium and Citylogistik Denmark to form Service2City, which will grow in the coming years as other European countries follow. The current focus is on coordinating freight and information flows. The financial flow will follow later. Eco2City partners are expected to operate collective warehouses and act in the interest of all stakeholders, with a focus on the end receiver. There is a uniform IT system for booking and invoicing, and operations con- form to European “general conditions.” The focus is on socially responsible and sustainable delivery, such as clean transport. For research on the impacts of Binnenstadservice on shippers and carriers, Hendriks called on Hans Quak, who presented results of a study by TNO, an indepen- dent research organization in the Netherlands that ana- lyzed whether the Binnenstadservice could be expanded to other cities. The results showed that it could be expanded because the service solved stakeholders’ prob- lems. The Binnenstadservice solves problems for carri- ers as well as shippers by giving them just one drop-off point. The TNO study ran four scenarios, calculating the effects of the Binnenstadservice service for two shipper– carriers. In the first scenario, no Binnenstadservice was used. In the second scenario, six cities used Binnenstad- service; in the third scenario, 20 cities were used; and in the fourth scenario, 41 cities used Binnenstadservice. The subjects of the study were TWI, a network of travel agencies that receives small-volume deliveries; and Lek- kerland, a convenience store chain. The results of the four scenarios for TWI and Lekkerland showed signifi- cant cost and time reductions compared with no Bin- nenstadservice for these shipper–carriers. Reductions of distance, time, costs, and CO2 emissions of approxi- mately 5% were achieved by both TWI and Lekkerland in the six-city scenario, 15% in the 20-city scenario, and up to 25% for TWI in the 41-city scenario. Rather than using one roundtrip that takes 2 hours to get to the next city, the goods for three roundtrips could be consoli- dated into one vehicle. Explaining the wider effects, Quak said considerable savings were achieved per delivery when a Binnenstadser- vice branch was used. In particular, 48% to 72% fewer kilometers were driven, saving 60% to 70% of time and reducing costs by 58% to 71% and CO2 emissions by 47% to 71%. The variation in these savings was due to the types of deliveries, round-trip length, the number of kilometers between the city and the carrier’s distribution center, and the number of deliveries in each city. TNO concluded from the study that Binnenstadser- vice differs from other initiatives because of its focus on a value proposition for all stakeholders. All actors profit from Binnenstadservice. In particular, local authorities benefit through improved quality of the public space and cost savings due to bundled deliveries. Receivers benefit from reverse logistics and value-added logistics. Shippers benefit from the convenience of a consolidated transport order (called a “green order”). Carriers benefit because of a single drop-off point. Finally, inhabitants benefit because of improved quality of the public space. Growth of the Binnenstadservice network into Europe creates opportunities for shippers and carriers to reduce costs, time, and emissions. Binnenstadservice is one of the solu- tions that organizes city logistics to be more sustainable, TNO concluded. Barriers and Constraints Hendriks thanked Quak and continued the presentation by explaining the barriers and constraints encountered when implementing Binnenstadservice. She noted that when she first proposed the Binnenstadservice solution, she was not aware of the full picture of city logistics. She saw the local problems that needed to be addressed and worked with stakeholders in just one city, with everyone sitting around the table working on the solution together. As Binnenstadservice began to scale up to multiple cities in the Netherlands, it received negative press because the concept was perceived as local governments subsidizing a transport competitor. In fact, however, Binnenstadser- vice only does the warehousing, not the transport. The transport is outsourced to a carrier who delivers from the local warehouse to the shelves or to the end consumer. However, there was resistance. Indeed, transition always brings resistance, Hendriks said. The trick is to find out where, when, how, and who is resisting. Carriers may be resisting because of an unwillingness to change their logistical “ways of doing business” or because they think they earn more money by doing it the old way. Another barrier that Hendriks found was the “macho man cul- ture” in logistics, in which actors believe “I can do it myself.” Instead, Hendriks believes that actors should be concerned with sharing, respecting, serving, trust, and social responsibility. Another constraint Hendriks identified was an eager- ness for “quick wins” and the attitude that “we’ve tried them all and they didn’t succeed.” There was reluctance to be patient and go for the “slow food” (i.e., a longer- term process). An additional constraint was a disbelief,

52 city logistics research: a transatlantic perspective both in the market and among researchers, about the financial sustainability of the Binnenstadservice solution. Indeed, 106 other initiatives had all failed, but Binnen- stadservice recently celebrated its 5-year anniversary and operates without subsidies. Finally, Hendriks saw con- sultants as a barrier if they did not want solutions but wanted the inefficient status quo so that they could keep earning money from their advisory services. Remarkably, Hendriks said, there were no barriers or constraints from local governments, establishments, inhabitants, or end consumers. Most of the cities were great ambassadors of the program. Local shopkeepers and restaurants did not offer barriers other than simply wanting to only pay their fair share. Local inhabitants supported the idea because of improved traffic safety and reduced noise. Finally, end consumers loved the idea of more sustainable distribution, Hendriks said, and they wanted it to be used more widely. Recommendations for Research Hendriks offered four areas for further research. The first area is organizational and behavioral change around new logistics systems: How can carriers and shippers be motivated? The second area is to research the impacts of a European cooperative network of urban freight service points on European shippers. The third research area would look at these impacts on American shippers. Finally, further research could be done on the transfer- ability of the Binnenstadservice solution. The solution worked because it was in the interests of all the stake- holders. Could this process work in the United States? opportunItIes For publIc polIcy InterventIon Ian Wainwright Ian Wainwright spoke about the London approach to public policy intervention, focusing on the example of the London Olympic Games in 2012 and building on that legacy. He began by saying that Transport for Lon- don was not just double-decker buses and the under- ground subway system. London Transport includes these, of course, but it also includes rail, overhead cable cars, bikes, light rail, river service, and traffic lights. The London Context Wainwright described the political landscape of London, which is complicated by the existence of 33 boroughs, including the Corporation of London. Boroughs have wide-ranging powers and responsibilities over planning, waste, traffic, and environmental health issues such as noise levels. There is potential for some harmonization and standardization across these boroughs, Wainwright said. In London, 88% of all freight by weight comes by road, 5% by rail, 5.8% by water (river and canals), and 1.2% by air. On a typical weekday in London, 281,000 journeys are made delivering to 290,000 businesses and 8.2 million residents. In total, 13 million kilometers are traveled per day, and 80% of this traffic takes place between 6 a.m. and 6 p.m. Freight comprises 16% of London’s road traffic (compared with 1.7% for buses) and employs 5% of London’s workforce. Road trans- port produces 24% of CO2 emissions in London. Wain- wright added that London’s population is once again growing, which will only add to the problems, and he questioned why 80% of deliveries had to take place from 6 a.m. to 6 p.m. The traditional approach to policy intervention is complicated by the borough structure, in which each borough can set its own policies on parking restrictions, loading times, and so forth. Given the 33 boroughs, one street could be subject to different controls as it moves through different boroughs, which causes confusion for operators. On one street in London, nine sets of regu- lations apply. Furthermore, some streets allow off-hour delivery (OHD), and some do not. In addition, the single yellow line and double yellow lines indicating park- ing and the markings indicating loading and unloading restrictions differ widely among jurisdictions; these dif- ferences have resulted in five million parking violations issued in 2011 and 2012. Interventions: Congestion Pricing and the Low-Emission Zone Wainwright discussed two policy intervention schemes implemented in London: congestion charging and the low-emission zone (LEZ). The congestion-charging program was introduced in 2003. Initially a £5 daily fee was charged for all traffic moving into Central Lon- don between 7 a.m. and 6 p.m. This fee is currently £10 according to Transport for London’s website. The penalty for violation was £130, and the overall goal of the scheme was to improve the environment and safety. The results of the scheme showed a reduction in general traffic, but freight still needed to move, so the scheme reduced general traffic more than freight traffic. Also, congestion overall did not improve much because some road space was reallocated to make more room for cyclists and pedestrians in the downtown area. The LEZ was introduced in 2008 and increased in scope in 2012. The scheme was not intended to be a

53logistics efficiency in urban areas: Part 2 big financial success, but it has eliminated 28 tons of particulate matter. The Mayor of London is considering designating an ultra-low-emission zone to get even lower emissions. London Freight Plan In contrast to the traditional approach to policy interven- tion, which focused just on engineering and enforcement, the London approach has added a third tool, behavior change, to the traditional “engineer and enforce” duo. The approach involves research and data gathering to create a draft plan that, after consultation, becomes a London Freight Plan that identifies a program of work for Transport for London in conjunction with the local boroughs. The London Freight Plan for sustainable freight dis- tribution includes a fleet operator recognition scheme (FORS), delivery and servicing plans, and construction logistics plans (see www.tfl.gov.uk/freight). Fleet opera- tors are recognized for emissions reductions, safety, com- pliance, and best practices, all with the goal of improving fleet standards. To date, 2,000 operators are involved in the recognition scheme, from small single-vehicle opera- tors to DHL and TNT, who want to have their depots accredited. Transport for London itself is a procurer of goods and services, particularly for large construction projects, and it ensures that anyone delivering to Trans- port for London is demonstrating good practice. Other cities have adopted some of the freight plan proposals. For example, Newcastle (UK) is implementing FORS, and Brussels is currently considering implementation of delivery and servicing plans. Freight Plan for the London Olympics Wainwright moved to a discussion of the 2012 Olympic Games, which was the world’s largest peacetime logisti- cal event, comprising representatives from 203 countries and an Olympic Family of 55,000 people that included athletes, officials, and media. Over 8.5 million tickets were sold. Clearly, such large scale creates huge road and passenger transport challenges, and London offi- cials evaluated the logistical implications of hosting the Games and knew they would have to make sure all the shops, restaurants, hotels, and so forth were kept sup- plied during the 2 weeks of the Games. In conducting this evaluation, London realized there was no single source of information, and little available second-hand information from previous Olympic host cities like Syd- ney and Vancouver, about how to manage the challenge. They worked out a plan for controlling the impact that the Games would have on transport for 6 weeks in 2012. Transport for London created a Road Freight Pro- gram for industry describing the issues, solutions, and actions of how deliveries would be made during the Games. The program included discussions with indus- try in “freight forums,” which included large carriers like UPS and DHL, big construction and waste removal firms, and regulators and representatives from the local boroughs and national Department for Transport. The Road Freight Program included an advice pro- gram to reduce, retime, reroute, or revise delivery modes. An awareness campaign comprising leaflets, posters, radio advertisements, one-on-one meetings, workshops, and e-mails was also part of the process. The Road Freight Program worked well, as shown by data from the Transport for London’s network of traffic cameras, which showed retiming of freight traffic, par- ticularly large (over 3.5 tons) vehicles, entering and leav- ing London. The proportion of truck traffic in daytime hours during the Games was 31% during the Olympics and 35% during the Paralympics, compared with 39% in the summer of 2011. The biggest increases of freight traffic were between 8 p.m. and 6 a.m. Lessons from the Games show the value of political and industry engagement, especially with the construction sector and across Transport for London, the London bor- oughs, and London councils through the freight forums to understand needs, identify specific points of contact, investigate best practices, remove barriers, and sell the cul- ture of behavior change. Direct engagement between reg- ulators and freight operators above the transport manager level, to real decision makers, was of great value. Talking industry language (i.e., cost and service rather than less direct terms about air quality) also helped get industry attention and buy-in to the concept of retiming deliveries, reconfiguring routes, and collaboration. OHD, consolida- tion, and revised delivery modes were all used. Finally, explaining freight and logistics in the media helped cus- tomers to understand the nature of their own supply chains and led to more “conscious procurement,” such as bulk ordering or preordering. One of the lessons learned was that 35% of goods delivered to a building might come from individuals ordering online for personal use but ask- ing for office delivery rather than home delivery. The Games provided a burning platform (i.e., a “do or die” situation) for business and local authorities alike. Businesses could see impacts on costs, service, reputa- tion, and delivery reliability, while authorities could see negative impacts on air quality, congestion, cyclist and pedestrian safety, and journey time reliability. Although the Games were a one-time event, the reality of London’s growing population (1.25 million more people by 2031) and economic development (750,00 more jobs and a 15% rise in demand for goods and services coupled with a 10% decrease in road space availability) show that the need for planning for freight will continue in the future.

54 city logistics research: a transatlantic perspective Going forward, Wainwright said, the three key ele- ments to address in a revised freight program are to • Reduce the traffic impact of freight on the road net- work, reducing peak activity and minimizing the conges- tion resulting from deliveries and freight traffic flows, in balance with other road users; • Reduce the impact of freight on the environment, improving overall air quality and reducing noise attrib- utable to freight; and • Increase the levels of compliance and safety, spe- cifically reducing the potential for impacts or collisions involving freight vehicles. These three elements are things with which everyone can agree, along with the use of key performance indicators to measure performance. The work topics to achieve the outcome of safer and more efficient deliveries involve logistics efficiency, as well as doing the right things for safety and the environ- ment. Lessons from the changes made during the Games show that it is possible to reduce the impact of road traf- fic through a variety of measures, such as consolidation, conscious procurement, or by changing the mode from truck to rail, water, bike, or walking. Two other lessons from the Games show that it is possible to retime freight activity, particularly away from the peak times, and to make more use of the transportation network 24/7 and to switch to OHD. Third, it is possible to maximize efficient journey planning, ensuring practical routing of freight activity (both heavy goods vehicles and vans) and dealing with issues around the loading location to increase compliance and minimize parking tickets (pen- alty charge notices) for operators. A new team in Transport for London is looking for logistics efficiency and is planning interventions in cer- tain areas or events such as during the London Bridge redevelopment. These interventions require consistent messaging to shippers and carriers, as well as joint con- versations to share information. This information will be supplemented by the work focusing on increasing the safety of the industry, particularly for vulnerable road users such as cyclists. Future Policy Interventions Current policy direction includes a roads task force, a cycling vision to increase the numbers of cyclists and offer greater levels of safety, and an ultra-low-emission zone. The cycling lobby is powerful in London and is a political issue because bicycle fatalities and even mere accidents become major news stories. There were 16 cyclist fatalities in 2011, nine of which involved heavy goods vehicles, mainly construction vehicles. Politicians do not want to deal with these kinds of accidents and fatalities. The questions around the ultra-low-emission zone include defining its boundaries and defining what “ultra low” means. Transport for London’s tasks include data gathering and modeling, reviewing existing regulations and restric- tions, cyclist safety, off-hour activity, electric vehicles, logistics, and land use. In particular, Transport for Lon- don will look at how much freight is moving, what the regulations are, and what the perceptions of players are in a number of key locations. They want to deliver for industry so that industry players remain involved. Opportunities for Research Wainwright concluded by identifying research gaps and opportunities for research. The first opportunity is for quantification: • Which policy lever should be pulled? What will happen? • If a city bans trucks, what effect does it have on safety? • What happens to the bottom line—the costs of goods and services—as a result? • If a new policy is implemented, what are the consequences? Other gaps in research include not knowing what is mov- ing where and when, and who is controlling the activity (shipper, receiver, regulators, or residents’ fears). More research also needs to be done on light-goods vehicles and vans, as well as on home-delivery models that resi- dents will support. Finally, the policy impacts (general traffic versus freight) on safety, emissions, and costs are another area for research. sessIon suMMAry Chelsea (Chip) White Chip White wrapped up the session with a recap of the talks and offered general comments from the session overall. First, White said, Téodor Crainic talked about mea- suring efficiency and inefficiency in urban freight trans- port and discussed what is measured and what should be measured. He discussed costs and profits and perfor- mance measures, such as on-time and same-day deliv- ery, as well as service reliability. Crainic also presented the negatives of inefficiencies, namely congestion, which affects mobility; emissions and overall pollution and noise levels that compromise city livability; and safety

55logistics efficiency in urban areas: Part 2 issues such as fatalities and injuries, which are both per- sonal and community costs. Crainic called for integrating planning and advisory activities with research activities and data collection. Crainic further identified many needs for efficiencies. In cities, there is simply not a lot of extra space for prod- ucts and waste, and there is a high cost of “building out” of congestion. Although Crainic did not talk much about the high cost of building out, White said, it is one of the differences in urban logistics that sets it apart from non- urban logistics. Despite all the inefficiencies of urban logistics, how- ever, there are many opportunities to move from inef- ficient to efficient operations. One such opportunity is using real-time congestion information, but there is a challenge in balancing the competing needs of reducing the number of vehicles and miles traveled while maintain- ing the ideal of just-in-time delivery due to high inven- tory costs. Coordination and consolidation are required. Crainic also talked briefly about the physical internet, using the virtual internet as a metaphor that illustrates the high value of universal standards. Next, White summarized José Holguín-Veras’s pre- sentation about opportunities for improving efficiency. Holguín-Veras offered examples of public-sector inter- ventions to improve urban freight and identified research needs in this area. Holguín-Veras provided an in-depth example of the OHD project in New York City, which was both very successful and very challenging to imple- ment. Could this example be replicated elsewhere? Holguín-Veras also made the point, White contin- ued, that current trucking practices are efficient from the private company perspective but are inefficient from a systems perspective. For example, surveys show that 25% of truck trips are empty and only 20% to 30% of truck capacity is utilized. There is a need for more systemic efficiency, and increasing this efficiency would translate into more livable cities and a more productive economy. Much of the freight moved in urban areas is low density, requiring higher cubic capacity, which appears inefficient when a weight-based efficiency met- ric is used. Just-in-time inventory policies in city logistics tend to drive down load factors and therefore decrease transport efficiency, but inventory efficiency and overall supply chain efficiency may offset these decreases. Pub- lic policy needs to be aligned with societal and private sector goals. Logistics costs as a percentage of the U.S. gross domestic product (GDP) have declined since 1980, from 15% to 8% of the GDP, but the decline has come as a result of reduced inventory costs, not transportation costs, White said. White then summarized the highlights of Birgit Hen- driks’s presentation about barriers and constraints to efficiency. She described the Binnenstadservice concept. Does this service satisfy customer service levels, which may vary from customer to customer? Binnenstadservice is socially responsible and ecologically sustainable, but it may conflict with a firm’s business plan or competitive advantage. Again, such conflicts call for better alignment of societal and private sector interests, which forms the basis for suggestions for research. In the final presentation of this session, White said, Ian Wainwright discussed opportunities for public policy intervention, sharing the very interesting lessons learned from the London approach to the 2012 Olympic Games. The presentation raised questions regarding quantifica- tion, such as which policy levers to pull and who controls the activity. Policy affects safety, emissions, and costs. White offered three areas of general comments on the session. First, the competitive landscape for retailers is rapidly changing, as are consumer demands. Hence, cor- porate strategies must change and be better aligned with supply chain strategies. Moreover, retail is not the only industry in need of city logistics innovation. Second, White identified two research gaps. The first gap calls for a better understanding of the impact of reg- ulatory and policy intentions on the private sector (e.g., on supply chain and fleet efficiency). Case studies of innovations that have been implemented, along with the multiactor discussion that Cathy Macharis mentioned, help to inform this gap. The second gap in research relates to IT applications, which are central to much of the discussion (e.g., the rap- idly increasing reliance on fleet and enterprise value con- tained in real-time big data as mentioned by 7-Eleven, UPS, Waste Management, and Wal-Mart). Big data calls for new analytic tools to determine the value of informa- tion of new IT products and services at the planning and operational levels. Information flows are important, and in some cases information can substitute for inventory; if a shipper reliably knows the location of inventory at any given point in the system, less inventory overall needs to be held. Vendors know the cost of a service, but they rarely know the implications of the return on investment (ROI). Understanding ROI is vital to understanding the value of new ideas, White said. QuestIons And AnsWers Alison Conway asked whether decisions such as bike lanes were made at the whim of politicians, or whether freight had a seat at the table. Wainwright replied that freight is more at the table than ever before. There is a greater recognition of freight. Politically, because of the work of cycling campaigners and bloggers, cycling has an influential voice. Holguín-Veras remarked on the good idea of the Bin- nenstadservice and that receivers had the power to force

56 city logistics research: a transatlantic perspective change. He asked if there were other examples or ways to use the power of receivers to force change. Hendriks answered that it was far more efficient to sell the idea to shippers than to individual receivers. By making the service delivery area larger (expanding it to all of the Netherlands) every single small retailer could be approached, but it wouldn’t have to be a cold call. It is easier to sell the idea at the top level, because if Bin- nenstadservice has a national contract with the shipper, it just needs to see the shipper’s customer list in the cities, which Binnenstadservice then gives to its local franchi- sees. The franchises can then contact the shopkeepers, retailers, and other establishments, and it is not cold-call selling. McKinnon asked a question of Wainwright about plan- ning for transport during the Olympics. Wainwright answered that London Transport couldn’t influence every development because individual boroughs had jurisdiction to a certain level, but London Transport did talk with trade associations, mineral pro- duction associations, and even the British Association of Funeral Directors. It was important to work together, both top down and bottom up. Edgar Blanco asked Hendriks about how Binnenstad- service handled the issue of liability for packaging or returns. Hendriks replied that they began by working with 20 establishments, telling them, “Let’s try this for 2 months.” It was about trust. Binnenstadservice had con- tracts and was authorized to sign the transport papers. The shipment was in Binnenstadservice hands but owned by the retailer: retailers had to trust Binnenstadservice. Will stakeholders trust? “We had to just do it,” Hen- driks said. By doing the 2-month trial, Binnenstadservice proved that the concept works. Clarence Woudsma posed the question of committee structures and the influential behavior of certain actors, citing an example in which the most influential voice was that of the fire chief, because he had to have fire truck access. Wainwright replied that London Transport talked with industry. The conversation was at first limited to the time during the Olympic Games. After the Games, London Transport started freight forums to continue the conversation, and these were more open-ended dis- cussions. London Transport’s goal was to stay one step ahead, thinking about questions before asking them. The London Transport team knew key players in the room from the Olympics discussions, such as DHL, and another player who delivered 70% of the food in London. The London Transport team prepared for the freight forums by identifying issues that would be impor- tant to stakeholders. People have to stay in the room, Wainwright urged, and keep talking. Hendriks added that she knows the problem of the fire chief from her days as a city manager, and that the fire chief is right: he must take care of the city’s citizens and be able to enter anytime, anywhere. Another question posed to Hendriks centered on who pays for the last mile of delivery under the Binnenstad- service business model. Shippers who outsource trans- port have to pay the service provider anyway, so do they pay Binnenstadservice? Hendriks answered that yes, shippers who own or outsource have to pay, because it is the same box in both cases. Shippers have to hire a logistics service provider, but what differs is whether the shipper hires a third-party logistics provider to deliver 10 boxes to the inner city or to deliver just one box to a warehouse that does not have the time limits of inner cities. The benefit is that shippers can tender very simple orders rather than shipping to the inner city. Binnenstadservice sends an invoice at the national level to the national shippers. Shippers pay for the bundled delivery and the store pays for the reverse logistics. That is the business model. Alan McKinnon closed the question-and-answer session with a comment that city logistics has a certain amount of inertia, so sometimes it needs a shock to the system. The shock can be positive (like a sporting event such as the Olympic Games) or negative (like bad weather), but it can be used to motivate behavioral change.