Grant Agreement nº.SCS8-GA-2009-234061 Coordination and support action (Coordinating) FP7-TRANSPORT SST.2008.3.1.4. Urban delivery systems Project acronym: TURBLOG_ww Project title: Transferability of urban logistics concepts and practices from a worldwide perspective Deliverable 2 Business Concepts and Models for urban logistics Due date of deliverable: 30 th of July 2011 Submission date: 6 th of October 2011 Start date of project: October 2009 Duration: 24months TIS.pt – Transportes, Inovação e Sistemas, S.A. Version 1.0 Project co-funded by the European Commission within the Seventh Framework Programme Dissemination Level PU Public X PP Restricted to other programme participants (including the Commission Services) RE Restricted to a group specified by the consortium (including the Commission Services) CO Confidential, only for members of the consortium (including the Commission Services)
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Grant Agreement nº.SCS8-GA-2009-234061
Coordination and support action (Coordinating)
FP7-TRANSPORT SST.2008.3.1.4. Urban delivery systems
Project acronym: TURBLOG_ww
Project title: Transferability of urban logistics concepts and practices from a worldwide perspective
Deliverable 2
Business Concepts and Models for urban
logistics
Due date of deliverable: 30th of July 2011
Submission date: 6th of October 2011
Start date of project: October 2009 Duration: 24months
TIS.pt – Transportes, Inovação e Sistemas, S.A.
Version 1.0
Project co-funded by the European Commission within the Seventh Framework Programme
Dissemination Level
PU Public X
PP Restricted to other programme participants (including the Commission Services)
RE Restricted to a group specified by the consortium (including the Commission Services)
CO Confidential, only for members of the consortium (including the Commission Services)
TURBLOG D2: Business Concepts and Models for Urban Logistics ii
Foreword
This TURBLOG Deliverable 2 was produced by TIS.PT (Rosário Macário, Maria Rodrigues, and Ana Gama)
and received contributions from the following members of the consortium:
Cesar Lama, PTL UNI, Peru
Paul Timms, ITS Leeds, UK
Marcelo Cintra do Amaral, BHTRANS, Brazil
Geraldo Abranches, BHTRANS, Brazil
Jarl Schoemaker, NEA, Netherlands
Nathaly Tromp, NEA, Netherlands
The review of the document was made by Nathaly Tromp, NEA.
This document is set to be Published and should be referenced as:
“TURBLOG (2011), Transferability of urban logistics concepts and practices from a worldwide
perspective. Deliverable 2: Business Concepts and models for urban logistics”.
QUALITY CONTROL INFORMATION:
Version Date Description
0.1 20/08/2011 Draft version of TURBLOG D2 for partners comments
0.2 10/09/2011 Draft version of TURBLOG D2 after partners comments
0.3 16/09/2011 Final version of TURBLOG D 2
0.4 30/09/2011 Final version TURBLOG D2 for quality control
0.5 5/10/2011 Final version TURBLOG D2 after quality control
Final 1.0 6/10/2011 Submission of TURBLOG D2 final version to the EC
TURBLOG D2: Business Concepts and Models for Urban Logistics iii
2.2. Special conditions Special needs Might have special needs No special needs
e.g. valuable products, frozen
products, etc..
e.g. open packages, if food handled
ambient temperature, chilled, etc...
2.2.1. Fragility Fragile Might have special needs No special needs
2.2.2. Perishability Perishable Not perishable
Characteristics Classification
3.2.3 AGENTS PROFILE / DELIVERIES PROFILE
For the deliveries profile, it is important to know the demands of the client in terms of urgency of
deliveries. This will determine the frequency of the deliveries, and, together with the amounts to be
delivered (number of units per shop, number of shops, etc.), explain how the deliveries are made.
Table 4 – Agents profile/deliveries profile
3.1. Urgency of deliveries Irrelevant Relevant Urgent
3.2. Frequency of deliveries Low Medium High
< once a week Several days per week Daily
3.3. Amounts to be delivered Few Several Many
3.3.1. Number of shops One shop Several shops Retail center/big shops
3.3.2. Vehicles weight and size Light goods vehicle or smaller vehicles Van /small truck Heavy goods vehicles
3.4. Planned deliveries No defined routine Defined routine
e.g. after hours deliveries, 8-10 a.m.,
...
Characteristics Classification
TURBLOG D2: Business Concepts and Models for Urban Logistics 38
3.3 DEFINITION AND CHARACTERISATION OF THE LOGISTIC PROFILES
The objective of the identification and characterisation of the logistic profiles is to clearly identify
similarities between characteristics that are common to various locations, product types and deliveries
profile in order to be able to identify examples of measures that can be transferred and replicated
elsewhere. Taking into account the classification of each of the factors considered in the previous sub-
chapters, five different profiles were established.
For the characterisation of the logistic profiles, there were some features that were considered
determinant to its classification. Most of these features are related with the city area characteristics
such as commercial density and homogeneity, logistic accessibility and restrictions applied to the
circulation of goods vehicles. However, there is one profile that differs from the others, due to the
particularities of perishable products such as grocery articles (greens, fruits and other foodstuffs).
These products are commonly related to grocery stores, markets, cafeterias, restaurants and hotels.
Thus, there were established the following logistics profiles:
Profile A: cluster of shops specialised in one specific type of service/product;
Profile B: Hotels, restaurants, small grocery stores, small neighbourhood markets;
Profile C: Business Centre;
Profile D: Large commercial stores;
Profile E: Residential areas with local trade;
The definition of these profiles intends only to represent one example of one area/type of product that
fulfils the requirements to fit in the profile, in other words, the definitions’ objective is intentionally
as broad as possible, so there are some characteristics that were considered as key features to define
the profile, while others can be left open (considered “grey areas”).
TURBLOG D2: Business Concepts and Models for Urban Logistics 39
Table 5 – Logistic Profiles
Profile A Profile B Profile C Profile D Profile E
Cluster of shops specialized in one specific
type of service/product: ex. a neighborhood
that is known for furniture stores, craft or art
pieces, technological pole.
Hotels, restaurants, small
grocery stores,
neighborhood markets
Business center (courier, small
deliveries, B2C)
Large commercial (retail,
shopping centers,
distribution warehouses)
Residential areas with local
trade
1.1. Commercial density High Low/Medium/High High High Low/Medium
1.2. Homogeneity High Low/Medium/High Low Low Low/Medium
1.3. Logistic acessibility Good/Reasonable Bad/Reasonable/Good Reasonable/Bad Good Reasonable/Bad
1.4. Restriction applied Yes/no Yes/No Yes No Yes
Profile A Profile B Profile C Profile D Profile E
Cluster of shops specialized in one specific
type of service/product: ex. a neighborhood
that is known for furniture stores, craft or art
pieces, technological pole.
Hotels, restaurants, small
grocery stores,
neighborhood markets
Business center (courier, small
deliveries, B2C)
Large commercial (retail,
shopping centers,
distribution warehouses)
Residential areas with local
trade
2.1. Easiness of handling Easy/Reasonable/Difficult Easy/Reasonable/Difficult Easy Easy/reasonable/Difficult Easy/reasonable/Difficult
2.2. Special conditions No special needs/special needs Special needs No special needs Might have special needs Might have special needs
2.2.1. Fragility No special needs Fragile No special needs No special needs No special needs
2.2.2. Perishability Not perishable Perishable Not perishable Not perishable Not perishable
1. City Area Features
2. Product Characteristics
TURBLOG D2: Business Concepts and Models for Urban Logistics 40
Profile A Profile B Profile C Profile D Profile E
Cluster of shops specialized in one specific
type of service/product: ex. a neighborhood
that is known for furniture stores, craft or art
pieces, technological pole.
Hotels, restaurants, small
grocery stores,
neighborhood markets
Business center (courier, small
deliveries, B2C)
Large commercial (retail,
shopping centers,
distribution warehouses)
Residential areas with local
trade
3.1. Urgency of deliveries Irrelevant/Relevant/Urgent Urgent Relevant/Urgent Relevant Irrelevant/Relevant/Urgent
3.2. Frequency of deliveries Low/Medium/High High High Medium/High Low/Medium
3.3. Amounts to be delivered Few/Several/Many Several Few/Several Many Few/Several/Many
3.4. Planned deliveries No defined routine/Defined routine Defined routine No defined routine/Defined routine Defined routine No defined routine
Grey Areas - Features that are not considered relevant for de definition of the Logistics Profile
3. Agent Profile/Deliveries
Profile
TURBLOG D2: Business Concepts and Models for Urban Logistics 41
3.3.1 PROFILE A: CLUSTER OF SHOPS SPECIALISED IN ONE SPECIFIC TYPE OF
SERVICE/PRODUCT
This profile refers to neighbourhoods known for having specialised shops of one type of product or
service. The city area with this profile can be for example a neighbourhood with several design
furniture shops, crafts or art pieces.
There can be some cases where the establishments and offices have started to arise organically and the
commercial density has increased in a way that the area no longer has the capacity to guarantee a
good logistic accessibility.
The characteristics of this logistic profile are summarised in the following table:
Table 6 – Characteristics of Profile A
Source: Presentation “Business Model Caso Gamarra Perú”, Victor Plaza
Commercial density High
Homogeneity High
Logistic acessibility Reasonable/Bad
Measures considering
logistic needs
Some measures considering logistic
needsLevel of Congestion High/Reasonable
Restriction applied Yes/no
Easiness of handling Easy/Reasonable/Difficult
Special conditions No special needs/special needs
Urgency of deliveries Irrelevant/Relevant/Urgent
Frequency of deliveries Medium/High
Amounts to be delivered Many
Planned deliveries No defined routine/Defined routine
Profile A
Product Characteristics
Agent Profile/Deliveries Profile
City Area Features
Gamarra, being the largest garment factory in Peru,
fits into this profile, as illustrated in the figures
below.
TURBLOG D2: Business Concepts and Models for Urban Logistics 42
3.3.2 PROFILE B: HOTELS, RESTAURANTS, SMALL GROCERY STORES, SMALL
NEIGHBORHOOD MARKETS
This is the only profile defined exclusively for the products’ characteristics, and not for the city area
features. The establishments belong to the food sector, so, most of the products sold are perishable
and fragile and might have special needs, such as temperature (e.g. frozen products) and conditioning.
These establishments usually require a high frequency of distribution, with daily reposition of the
products, so the timeliness of deliveries is well established (normally early in the morning).
Table 7 – Characteristics of Profile B
Commercial density Low/Medium/High
Homogeneity Low/Medium/High
Logistic acessibility Bad/Reasonable/Good
Restriction applied Yes/No
Easiness of handling Easy/Reasonable/Difficult
Special conditions Special needs
Fragility Fragile
Perishability Perishable
Urgency of deliveries Urgent
Frequency of deliveries High
Amounts to be delivered Several
Planned deliveries Defined routine
Profile B
City Area Features
Product Characteristics
Agent Profile/Deliveries Profile
Source: www.fito.com.br
Organic Product Company in Belo Horizonte, Brazil delivers organic products, mostly greens directly from the producer to the final consumer. Some aspects of the products involved in this practice are the ones that fit into profile B:
High fragility;
Extremely perishable (the products last approximately 4 to 10 days); Difficulty of handling;
The products need to be kept at a specific temperature.
Special conditions No special needs No special needs Might have special needs No special needs Special needs No special
needsNo special needs
Might have special
needs Special needs
Fragility Not determined No special needs Might have special needs No special needs Fragile No special needs No special needsMight have special
needsFragile
Perishability Not perishable Not determined Both perishable and not Not perishable Perishable Not perishable Not perishable Not determined Perishable
Urgency of deliveries Not determined Relevant Relevant Relevant Urgent Urgent Relevant Relevant Urgent
Frequency of deliveries High High High High High High High High High
Amounts to be delivered Several Many Few Several Several Several Several Several Several
Number of shops Several shops Retail center/big shops Several shops Several shops Several shops Several shops Several shops Several shops Several shops
Vehicles weight and size Van/small truck Heavy goods vehiclesLight goods vehicle or
smaller vehiclesVan/small truck
Light goods vehicle
or smaller vehiclesVan/small truck Not determined Van/small truck
Light goods vehicle
or smaller vehicles
Planned deliveries Defined routine Defined routine Defined routine Defined routineDefined routine Defined routine
Defined routine Defined routine No defined routine
PROFILE C PROFILE D PROFILE C PROFILE C PROFILE B PROFILE C PROFILE C PROFILE E PROFILE BLogistic Profile
Agent Profile /
Deliveries
Profile
Product
Characteristics
City Area
Features
TURBLOG D2: Business Concepts and Models for Urban Logistics 51
Most of the urban logistic practices that were presented in the case studies (Deliverable D3) refer to
urban city centres (Profile C) that usually face problems, such as bad logistic accessibility and high levels
of congestion. Also major urban city centres have to deal with the impacts from goods vehicles on the
urban environment, such as noise, congestion and air pollution. Therefore, the logistic measures
identified in Paris, New York City, Beijing and Tokyo concern restrictions towards the circulation of goods
vehicles, such as time windows or vehicle dimensions. In addition, some innovative measures are being
tested as last mile solutions, such as low-emission transport modes introduced by Chronopost and La
Petite Reine in Paris.
Concerning Profile B, the key issue of this profile is the special conditions that the distribution of
perishable goods require, as well as the distribution concerns that are common in most urban centres,
such as congestion during rush hours. The special needs from perishable products may imply temperature
conditions (chilled, frozen, ambient temperature…) or conditioning needs such as, for example, open
packages. Therefore, the urgency of deliveries is very relevant and the frequency of deliveries is normally
high (on a daily basis). In the Mumbai case study some time and access restrictions to the freight
circulation are considered in local transport policies and therefore, the Mumbai Dabbawalas Operation
System is presented as a successful logistics model that cut-crosses these restrictions, because it is based
on door-to-door food delivery services that uses public transport and non-pollutant vehicles (bicycles) for
their daily deliveries. Moreover, the solution presented in the case study Belo Horizonte (Brazil) includes
innovations on Business-to-Consumer approaches, namely the distribution directly from the producer to
the final consumer.
Profile D regards greater amounts of goods to supply large retail shops, such as supermarkets. The
Monoprix rail train was designed to supply all Monoprix’s supermarkets within Paris. This profile is also
applied to big warehouses and distribution centres, as presented in the Santiago do Chile case study. The
Abertis Logistics Park is a modern logistics park located in the Metropolitan Region and has good access to
the main highways of the city and routes to two major ports in the country, with no restrictions applied.
For areas that are predominantly residential (Profile E), the geometry of the streets is, in most of the
cases, not prepared for commercial supply, such as loading bays exclusive for commercial establishments,
especially in historical city centres. In Utrecht, the solutions for urban logistics include private-public
partnerships, programmes between municipalities/groups of municipalities, and municipality regulations
(vehicle restrictions/time windows/city distribution centres/logistic routes). Cargohopper is an example
of a solution for the constraints caused by the geometry of the streets. This train like vehicle produces
zero emissions and is allowed to circulate in the inner city at any time and any place.
There are some logistic measures that are transversal to all logistic profiles, such as the off-hour delivery
programme presented in the New-York case study. These logistic measures can be loading/unloading
regulations or urban master plans which have a wide application within the city. These wide scope
TURBLOG D2: Business Concepts and Models for Urban Logistics 52
logistic measures can sometimes neutralise other measures that are specific for one determined area,
product or delivery type. In other cases urban regulations can foresee and encourage innovative urban
logistic actions, as for example, the Paris Freight Oriented Master plan, on which the preservation of land
is foreseen, in order to develop logistic facilities with railway or waterway access and the identification
of areas to tranship goods from a boat/ship to a delivery vehicle during certain times of the day.
TURBLOG D2: Business Concepts and Models for Urban Logistics 53
4 ADJUSTING BUSINESS MODELS TO LOGISTIC PROFILES
The main goal of this chapter is to identify which business model best suits each logistic profile. In order
to fulfil this objective, a comparison was made between the logistic profiles and the business models of
the case studies that were analysed throughout this report.
This comparison can be observed in the table presented below.
Table 13 - Relationship between Logistic Profiles and Business Models
The major outputs that come from this comparison is that last mile solutions are generally a concern of
densely built areas, namely residential areas, offices and commercial activities (Profiles C and E). The
innovative approaches considering Profile B also consider last mile solutions, but in these cases logistic
measures incorporate the entire logistic chain, from the producer to the final consumer. Due to the large
amounts of products that are subjected to the type of businesses considered in Profile D, warehousing
TURBLOG D2: Business Concepts and Models for Urban Logistics 54
and supporting activities are major concerns and therefore in both cases studies, optimisation solutions,
such as logistic centres with several supporting facilities and good accessibilities, including intermodal
distribution, as the Monoprix rail project in Paris, France are considered.
The analysis of the case studies allows conclusions to be drawn about what the the best solutions are for
each type of logistic profile, as shown in the figure below.
Figure 9 – Relation between business models and logistic profiles
A classification was made to evaluate the suitability of each type of business model considering the
identified logistic profiles (see Table 14). Although there are no examples regarding Profile A, a
classification was also made for this type of Profile. According to its description, it is possible to describe
some Profile A cases as being equivalent to Profile D, but in a less mature stage of development,
considering the solutions for transportation and distribution logistics. Therefore, the logistic improvement
solutions that are most suitable to Profile D, are also adjustable to Profile A. However, in the last case
additional measures will have to be taken into account together with regulation and freight policies.
Table 14 - Combination of Logistic Profiles with the most suitable business models
TURBLOG D2: Business Concepts and Models for Urban Logistics 55
The suitability of services ranges from:
+++ 'Service well suited to profile' to 0 'Service is not appropriate for this profile
From the table above it is possible to conclude that for logistic profiles that involve a great amount of
goods deliveries (profile A and D), the best business models are the ones that aim to optimise the
distributions, such as intermodal distribution and the concentration of related services in specialised
areas, such as logistic parks/centres, as the successful logistic practices of Monoprix and Abertis Logistic
Park showed.
The case studies that fit into Profile B are the Dabbawalas in Mumbai, and the organic products sale and
delivery in Belo Horizonte, Brazil. These examples present good solutions to deliver perishable products
using alternative modes of transport and to deliver products straight from the producer to the final
consumer. Therefore, business models involving optimisation and intermodal distribution were considered
as the most adequate for this profile.
Profiles C and E usually correspond to areas that face problems related to congestion and accessibility,
and therefore business models regarding last mile solutions are the ones considered with more potential
to be implemented within areas with these features.
TURBLOG D2: Business Concepts and Models for Urban Logistics 56
5 IDENTIFICATION OF DYNAMIC MECHANISMS FOR BM
IMPLEMENTATION AND TRANSFERABILITY
This chapter describes the process undertaken to identify the dynamic mechanism (or the potential
engine) for business models implementation and transferability. From a certain perspective this task can
be understood as a tool for the evaluation of trade-offs and synergies between urban freight transport,
the urban environment and the urban economy.
From the analysis of the case studies, it was possible to analyse the relationship between the types of
business models, the types of logistic profiles and the impact evaluations of the measures from the
selected case studies. From this relationship, it was possible to identify the measures with positive
impacts and the associated business models, logistic profiles and policies that allowed the identification
of better targeted policies towards urban logistics.
Figure 10 – Relationship between business models, logistic profiles and impacts from the measures
The following table summarises the policies adopted, the logistic profile identified, the business model
main characteristics and the impact evaluations per good practice case study.
TURBLOG D2: Business Concepts and Models for Urban Logistics 57
The green symbols represent the positive impacts that the selected good practices had. The red symbols
represent negative impacts caused by the implementation of the measures and the grey symbols
represent measures with limited or almost no impacts shown. If the symbols have a pattern, this means
that no quantitative and/or qualitative data was available in the case studies and that an assumption has
been made regarding the impact. The purpose of this comparison is to give a broad overview of the
expected main impacts of the different measures and to show the type of impacts that can be expected
with the application of those measures, with the adoption of that type of policy, according to that
logistic profile and most suitable business model.
As the impact of measures shows, in general, all measures contribute towards making the city more
attractive and the environment more sustainable.
TURBLOG D2: Business Concepts and Models for Urban Logistics 58
Table 15 – Comparison of the policies adopted, logistic profile identified, the business model main characteristics and the impacts evaluation per good practice case study.
City attractiveness
Transport
costs
reductions
Reduction of
congestion
Efficiency /
Productivity
Decrease of
transport
fleet
Volume of
goods
transported
Accessibility
of vehiclesPollution
(Truck)
-kmNoise Quality of life
Reduction of
accidents
Working
conditions
A
Partnership with Municipality; Clean delivery
vehicles; Delivery centre close to operational
area.
(+) ~ (+) + + (~) (+) + + + (+) (+) +
C
Partnership with Municipality; Clean delivery
vehicles; Delivery centre close to operational
area
La Petite Reine specifically developed the
tricycle needed for its business with a local
manufacturer.
(+) ~ (+) + (-) (~) + + + + (+) (+) ~
B
LAND USE MANAGEMENT
PUBLIC INFRASTRUCTURE
Freight oriented master plan; use of
railway for goods supply
PROFILE D
Agent profile/ Deliveries Profile:
urgency in the deliveries, medium
to high frequency of deliveries and
the amounts to be delivered are
many; defined routine
Monoprix partly supplies its Paris stores with
trains using the passenger trains tracks during
off-peak hours.
(+) - (+) (~) + + (~) + + - (~) (+) +
D
LAND USE MANAGEMENT
Beijing Transport Development
Program (2004-2020)
PROFILE C
City area features: high commercial
density, low homogeneity, bad to
reasonable logistic accessibility,
application of restrictions
The Tobacco Logistics Centre performs a
uniform storage, centralised sorting and
graded distribution of tobacco for the whole
city.
(+) + + + + + (~) + + (+) (+) (+) (+)
E
LAND USE MANAGEMENT
PUBLIC INFRASTRUCTURE
Land use policy measures for traffic
congestion alleviation; new and
expand public transport
infrastructure network
PROFILE B
Products characteristics: special
conditions e.g perishable
Delivery of lunch boxes carried by suppliers
(dabbawalas) where a major part of the door
to door delivery system is done using Mumbai’s
public transport system; Clean home cooked
food at reasonably cheap costs on a regular,
reliable and fast service such that the food is
at least warm when they consume it.
+ + ~ ~ (~) (~) + + + + + - ~
Environmental impacts Reduction of: Social impacts
LAND USE MANAGEMENT
TRAFFIC MANAGEMENT
Urban logistic spaces on city
centre; incentives to innovative
ways of delivery use of clean
vehicles
PROFILE C
City area features: high commercial
density, low homogeneity, bad to
reasonable logistic accessibility,
application of restrictions
Case
StudiesPolicies
Logistic Profile
main characteristicsBusiness Model main characteristics
Economic impacts Transport impacts
Legend:
Positive impacts
Limited or almost no impacts shown
Negative impacts
No quantitative and/or qualitative data was available
TURBLOG D2: Business Concepts and Models for Urban Logistics 59
City attractiveness
Transport
costs
reductions
Reduction of
congestion
Efficiency /
Productivity
Decrease of
transport
fleet
Volume of
goods
transported
Accessibility
of vehiclesPollution
(Truck)
-kmNoise Quality of life
Reduction of
accidents
Working
conditions
F
ENFORCEMENT AND PROMOTION
Tokyo metropolitan Government is
commited to control the problems
PROFILE C
City area features: high commercial
density, low homogeneity, bad to
reasonable logistic accessibility,
application of restrictions
Partnerships among competitors, the key
partners are exclusively private. The
relationship with the costumer (business-
business) is called collaborative, meaning, they
share infrastructures and services expecting
to exchange knowledge and problem solving,
which are common to other logistic
companies. Carriers wanted to save delivery
time.
(+) (~) + + + (~) (+) + + (+) + (~) (~)
G
The Cargohopper is a delivery solution that is
allowed to enter into the environmental zone
at any time in the City of Utrecht.
+ (~) (+) + (~) (~) + + + (+) (+) + (+)
H
The Beer Boat is a specific vehicle designed
for the water channels of UTRECHT. The
customer segment is defined as a multi side
market ,serves different Companies according
to the day of the week.
+ (~) + (+) + (+) - + + (+) (+) (+) +
I
LAND USE MANAGEMENT
PUBLIC INFRASTRUCTURE
Construction of new road
infrastructure
PROFILE D
Agent profile/ Deliveries Profile:
urgency in the deliveries, medium
to high frequency of deliveries and
the amounts to be delivered are
many; defined routine
Rent of warehouses equipped with services
“keys in hand”; Designing storage centres
tailored to the client particular needs, with
the same construction standards; Offices
rent.
+ (~) (+) + (~) + + + + - + + +
J
ACCESS CONDITIONS
TRAFFIC MANAGEMENT
PUBLIC INFRASTRUCTURE
Time a and access restrictions; time
regulations
PROFILE B
Products characteristics: special
conditions e.g perishable
Belo Horizonte presents a service that
provides organic food products through
planned routes directly from the producer to
the final consumer.
(+) - + + (~) (~) + + (~) + (+) + (~)
Environmental impacts Reduction of: Social impacts
Case
StudiesPolicies
Logistic Profile
main characteristicsBusiness Model main characteristics
Economic impacts
LAND USE MANAGEMENT
ACCESS CONDITIONS
TRAFFIC MANAGEMENT
PUBLIC INFRASTRUCTURE
Environmental with vehicles
restrictions; time windows; access
restrictions; logistic routes;
stimulating clean vehicles;
PROFILE E
City area features: low to medium
commercial density and
homogeneity;logistic accessiility bad
to reasonable; application of
restrictions
Transport impacts
Legend:
Positive impacts
Limited or almost no impacts shown
Negative impacts
No quantitative and/or qualitative data was available
TURBLOG D2: Business Concepts and Models for Urban Logistics 60
From the case study comparisons, it should be mentioned that the type of policies land use management
and traffic management adopted by business models based in last mile solutions/micrologistics centres
(logistic profiles C and E), present positive environmental impacts. These positive impacts are amongst
others, reduction of pollution, less km travelled by truck, positive social impacts and positive economic
impacts such as city attractiveness, reduction of congestion and efficiency/productivity. All these good
practices combine distribution centres and clean vehicles/ deliveries for the last mile distribution in
residential areas densely built, with commerce and services.
The type of policies adopted in Profile B and D show that land use management and public infrastructure
have a positive impact especially in the environmental impacts and city attractiveness.
The Cargohopper and Beer boat are clean electric vehicles adapted to the city area features (narrow
streets, water channels and restrictions applied (size, type of vehicle and time windows)) and operate
mainly in residential areas, with commercial activities. This logistic profile (Profile E) combines the four
types of policies and presents positive impacts in the city attractiveness, congestion reduction, the
environment and social impacts.
Only two case studies present positive transport costs reduction, namely the case studies from Mumbai
and the Tobacco Logistcs centre and both adopted policies related to land use management (in the case
of the Logistic centre, it also involved public infrastructure).
The following table illustrates which type of policies should be recommended for the combination of
logistic profiles with the most suitable business models, according to the findings from the good practices
that were assessed.
TURBLOG D2: Business Concepts and Models for Urban Logistics 61
Table 16 – Policies according to the combination of logistics profiles with the most suitable business
models
Combination of Logistic Profiles with the most suitable business model
Profiles PROFILE A PROFILE D PROFILE B PROFILE C PROFILE E
Business models
Policies
Optimization/
Intermodal distribution
Logistic Parks/ Centres
Optimization/
Intermodal distribution
Logistic Parks/ Centres
Optimization/
Intermodal
distribution
Last mile solutions/
Micrologistics centre
Last mile solutions/
Micrologistics centre
Logistic Parks/
Centres
Last mile
solutions/
Micrologistics
centre
ENFORCEMENT AND PROMOTION
TRAFFIC MANAGEMENT
ACCESS CONDITIONS
LAND USE MANAGEMENT
PUBLIC INFRASTRUCTURE
From the table above it can be observed that all combinations of logistic profile + business model have
the common policy land use management. It is a policy that is strongly related with the city planning e.g.
master plan (in some cases, already freight oriented, as the case of the land use public policies for
logistics considering zoning for logistic activities e.g. Utrecht, land use subsidies e.g. Chronopost
Concorde, Monoprix and La Petite Reine, etc.
Last mile solutions/micrologistics centres have a common policy, which is traffic management. This
policy is related to the deliveries to and from micrologistic centres, as usually they are in the city centre
or in residential areas with commerce and services. These areas usually have (or need) vehicle size and
type restrictions, fuel taxes, subsidies for low emission vehicles and so on.
The land use management and public infrastructure policies are usually applied together, as a package of
needed policies. If the type of business is last mile solutions/micrologistics centre, besides these two
policies, then traffic management is also recommended for this package.
For optimisation/intermodal distribution, besides the land use management and the public infrastructure,
it is also recommended that access condition policies; as in the intermodal distribution, loading and
unloading is one of the activities that is repeated in the logistic chain, be considered.
Despite no evidence, we assume that Profile A needs the same type of policies that profile D, but
due to high commercial density, it would be good to have also access condition policies to ensure
that the loading and unloading is improved.
TURBLOG D2: Business Concepts and Models for Urban Logistics 62
In general, these findings enable us to draft the following recommendations for the successful
implementation of the measures:
For the implementation of logistic parks/centres and micrologistics centres, it is recommended to
adopt land use management policies, to define zoning for logistic activities and land use pricing
and/or subsidies. For logistic parks/centres, it is also recommended to adopt public
infrastructure policies, such as new infrastructure for freight, new transport network
infrastructure, etc;
For the optimisation/Intermodal distribution, the key activities are production and distribution
and the main characteristic of the business model is related to the product characteristics,
therefore the policies related to access conditions and traffic management, together with the
land use management and public infrastructure, have presented a successful implementation of
the measures assessed in this project as good practices;
TURBLOG D2: Business Concepts and Models for Urban Logistics 63
6 CONCLUDING REMARKS
This deliverable has provided a methodology to identify the dynamic mechanisms for business concepts,
implementation and transferability, based on the case studies addressed in Deliverable D3.
One of the outputs that came from the business model analysis is that the “building blocks” of
Osterwalders’ approach are not sufficient enough to fully understand the motives as to why a logistics
company invests in such innovative solutions. Several of the logistics improvement measures that needed
to be made were investments in non-pollutant vehicles and noise reduction equipment that represent an
increase on their transport costs but don’t increase their profit, due to environmental regulations and/or
circulation restrictions of the city policies. Urban Policies are therefore a major player in the urban
logistics business. Therefore, another block was added to the business model named “Internalisation of
externalities”. These externalities represent not only a cost, but also a value proposition for these
businesses once they win a competitive advantage for “being environmentally friendly”: The Cargohopper
is a delivery solution that is allowed to enter into the environmental zone at any time in the City of
Utrecht, and the Chronopost Concorde and La Petite Reine have the possibility to rent Urban Logistic
Spaces at low prices because they use green vehicles. These environmental investments are also used as
publicity and as a communication channel with customers, and represent revenues to society in general
once they contribute to the overall environment.
From the analysis of the different examples of successful urban logistic measures, is possible to conclude
that most of the innovative business concepts presented rely on partnerships other than the typical
buyer-supplier relationship, with the expectation to improve performance (efficiency) and accessibility of
their services as core value propositions. Moreover, some business concepts were only effectively
implemented because they were sustained by public administration policies, which provided availability
of warehouse spaces or accessibilities and, in some cases, financial incentives, resulting in partnerships
with the municipality or other government administrations (e.g. Monoprix, Chronopost, La Petite Reine).
In order to meet the municipal environmental requirements and restrictions and also looking towards
improving service performance, some companies developed joint ventures to develop these new services
(e.g. La Petite Reine, that developed the tricycle needed for its business with a local manufacturer, and
the Beer Boat that is operating in the City of Utrecht). The need to optimise resources and also to obtain
other supporting services and infrastructures, leads to partnerships among competitors, such as in the
case study of Japan, where the key partners are exclusively private. In these cases, the relationship with
the customer (business-business) is called collaborative, meaning, they share infrastructures and services
expecting to exchange knowledge and problem solving, which are common to other logistic companies.
TURBLOG D2: Business Concepts and Models for Urban Logistics 64
In the business model comparisons there were three key activities considered in urban logistics:
production, distribution and supporting activities, such as warehouse renting (which basically consisted of
the design and processing of goods subject to a certain service), With the exception of the Abertis
Logistic Park located in Santiago (Chile), all the businesses considered are mainly located in the
distribution section of the logistics chain.
A methodology for the identification of logistic profiles was also developed in this report and five
different logistic profiles were established. Most of the features that were considered relevant for the
definition of a logistic profile are related to the city area characteristics, such as commercial density and
homogeneity, logistic accessibility and restrictions applied to the circulation of goods vehicles. However,
there is one profile that differs from the others, due to the particularities of perishable products such as
grocery articles (greens, fruits and other foodstuffs). The five logistic profiles defined are as follows:
Profile A: Cluster of shops specialised in one specific type of service/product;
Profile B: Hotels, restaurants, small grocery stores, small neighbourhood markets;
Profile C: Business Centre;
Profile D: Large commercial stores;
Profile E: Residential areas with local trade;
An analysis was made to all case studies presented in D3, and to each case study the following logistic
profile was assigned:
Most of the urban logistic practices that were presented in case studies (Deliverable D3) and that were
used to test our methodologies refer to urban city centres (Profile C), which usually face problems such
as bad logistic accesses and high levels of congestion. At the end of this report the logistic profiles were
crossed referenced with the business models, which were grouped into three different types of urban
logistics solutions:
Optimisation/Intermodal distribution
Logistic Parks/Centres
TURBLOG D2: Business Concepts and Models for Urban Logistics 65
Last mile solutions/Micrologistics Centre
The main findings of this report show that the most suitable logistic solution is defined not only by the
business characteristics, but also by the delivery, product and city area features (logistic profile), as well
as the policies adopted/to be adopted for the city. It is the combination of these three pillars that
constitute the backbone of the decision making for best urban logistics solutions.
After identifying the most suitable business model for each logistic profile, they were then related to the
five types of policies:
Enforcement and promotion
Traffic management
Access conditions
Land use management
Public infrastructure
The main outcome from the relationships of these policies with the urban solutions and logistic profiles
can enable us to draft the following recommendations for the successful implementation of the measures:
For the implementation of logistic parks/centres and micrologistics centres, it is recommended to
adopt land use management policies, to define zoning for logistic activities, land use pricing
and/or subsidies. For logistic parks/centres, it is also recommended to adopt public
infrastructure policy, such as new infrastructure for freight, new transport network infrastructure
and so on;
For the optimisation/Intermodal distribution, the key activities are production and distribution
and the main characteristic of the business model is related to the product characteristics. Due
to this, the policies related to access conditions and traffic management, together with the land
use management and public infrastructure, have presented a successful implementation of the
measures assessed in this project as good practices.
From the analysis it is possible to induce that entrepreneurship is a key factor for the
enhancement of urban freight solutions but it requires also the intervention of public policies to
encourage that entrepreneurship.
TURBLOG D2: Business Concepts and Models for Urban Logistics 66
7 REFERENCES
LINDER, J. and CANTRELL, S. (2000), Changing Business Models: Surveying the Landscape;
Accenture, Institute for Strategic Change. Accenture; Cambridge, Massachusetts. 2000.
OSTERWALDER, Alexander (2004), The Business Model Ontology - A proposition in a Design
Science Approach, These pour l’obtention du grade de Docteur en Informatique de Gestion.
Ecole des Hautes Etudes Commerciales de l’Université de Lausanne. 2004.
OSTERWALDER A, PIGNEUR Y. (2010), Business Model Generation - A Handbook for Visionaries,
Game Changers, and Challengers. Published by John Wiley & Sons, Inc., Hoboken. New Jersey.
2010.
OSTERWALDER A, PIGNEUR Y. and TUCCI C.L. (2005), Clarifying Business Models: Origins,
Present, and Future of the Concept. Communications of the Association for Information Systems
(AIS) Las Vegas, USA. 2005.
MAGRETTA, Joan (2002), Why Business Models Matter, Harvard Business Review. 2002.
Stähler, P. (2002) Business Models as an Unit of Analysis for Strategizing. International Workshop
on Business Models. Lausanne, Switzerland.2002.
Morris, M.; Schindehutte, M., Allen, J (2003). The entrepreneur’s business model: toward a
unified perspective. Elsevier, Journal of Business Research. 2003.
MACÁRIO R. et al. (2007), Logurb - Optimização de Sistemas Logísticos de Distribuição de
Mercadorias em Meio Urbano - state of the art da logistica urbana, Fundação de Ciência e
Tecnologia, Lisboa, Portugal.2007.
OECD - Organisation for Economic Co-operation and Development Delivering the Goods (2003),
21st Century Challenges to Urban Goods Transport. 2003.
HENSHER, D.A. E PUCKETT, S. M. (2005), Refocusing the modelling of freight distribution:
Development of an economic-based framework to evaluate supply chain behaviour in response to
congestion charging. 2005.
Rodrigue, J. (2006), Freight and the City: An Overview of Urban Freight Distribution and City
Logistics, Maritime Infrastructure Engineering and Management Program, Rutgers University,
April 2006.
TURBLOG D2: Business Concepts and Models for Urban Logistics 67
8 ANNEXES
8.1 ANNEX A
Definitions of the characteristics of the business models
8.2 ANNEX B
Urban business model canvas of each case study
8.3 ANNEX C
Logistic profile identification of each case study
TURBLOG D2: Business Concepts and Models for Urban Logistics
8.1 ANNEX A
Definitions of the characteristics of the business models
Strategic alliances between non
competitors
Partnerships between competitors
Joint ventures to develop new businesses
buyer-supplier relationships
Production
These activities relate to designing, making, and delivering a product in substantial quantities
and/or of superior quality. Production activity dominates the business models of
manufacturing firms. (Osterwalder, 2010)
Distribution Distribution is also a very important component of Logistics & Supply chain management.
Distribution in supply chain management refers to the distribution of a good from one
business to another. (in wikipedia)
Supporting activities This supporting activities can include warehousing facilities, offices or placing - network
design services. (Osterwalder, 2010)
PhysicalThis category includes physical assets such as manufacturing facilities, buildings, vehicles,
machines, systems, point-of-sales systems, and distribution networks. (Osterwalder, 2010)
Know-how
Know-how is practical knowledge of how to get something done. In the context of industrial
property, know-how is a component in the transfer of technology in national and
international environments, co-existing with or separate from other IP rights such as patents,
trademarks and copyright. (in wikipedia)
financialSome business models call for financial resources and/or financial guarantees, such as cash,
lines of credit, or a stock option pool for hiring key employees. (Osterwalder, 2010)
fixed costsCosts that remain the same despite the volume of goods or services produced. (Osterwalder,
2010)
variable costsCosts that vary proportionally with the volume of goods or services produced. (Osterwalder,
2010)
Sunk costs
In economics and business decision-making, sunk costs are retrospective (past) costs that
have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted
with prospective costs, which are future costs that may be incurred or changed if an action is
taken. Both retrospective and prospective costs may be either fixed (that is, they are not
dependent on the volume of economic activity, however measured) or variable (dependent
on volume). (in wikipedia)
Externalities
In economics, an externality (or transaction spillover) is a cost or benefit, not transmitted
through prices, incurred by a party who did not agree to the action causing the cost or
benefit. A benefit in this case is called a positive externality or external benefit, while a cost is
called a negative externality or external cost. (in wikipedia)
personal assistanceThe customer can communicate with a real customer representative to get help during the
sales process or after the purchase is complete. (Osterwalder, 2010)
self service / automated services
self service provides all the necessary means for customers to help themselves. Automated
services can recognize individual customers and their characteristics, and oΩer information
related to orders or transactions. (Osterwalder, 2010)
colloborativeCostumers share infrastructures and services expecting to exchange knowledge and solve
its'problems, which are common to other logistic companies. (Osterwalder, 2010)
Mass market Large group of customers with broadly similar needs and problems (Osterwalder, 2010)
SegmentedSome business models distinguish between market segments with slightly different needs
and problems. (Osterwalder, 2010)
Multi side market Organizations serve two or more interdependent Customer Segments (Osterwalder, 2010)
performanceImproving product or service performance has traditionally been a common way to create
value (Osterwalder, 2010)
customisationTailoring products and services to the specific needs of individual customers or Customer
Segments creates value. (Osterwalder, 2010)
ReliabilityCustomers trust and therefore find value in using and displaying a specific brand.
(Osterwalder, 2010)
pricelow-price Value propositions have important implications for the rest of a business model.
(Osterwalder, 2010)
cost reduction Helping customers reduce costs is an important way to create value. (Osterwalder, 2010)
risk reductionCustomers value reducing the risks they incur when purchasing products or services.
(Osterwalder, 2010)
acessibility
Making products and services available to customers who previously lacked access to them is
another way to create value. This can result from business model innovation, new
technologies, or a combination of both. Making things more convenient or easier to use can
create substantial value. (Osterwalder, 2010)
Key partners Type of key partnerships
Key activities Categories
Key resources Type of key resource
Cost structure Characteristics of cost structures
Customer relationships Types of relationships
Customer segments Types according the needs, behaviours
Value propositionElements that can contribute to
customer value creation
own direct (sales force/web force); own
indirect/own stores
Owned Channels and particularly direct ones have higher margins, but can be costly to put in
place and to operate. (Osterwalder, 2010)
partner indirect (partner
stores/wholesaler)
Partner Channels lead to lower margins, but they allow an organization to expand its reach
and benefit from partner strengths. (Osterwalder, 2010)
informal
On the other hand, informal approaches recognize that a variety of needs, including social
ones, underlie communication in organizations and that, as a result, the actual
communication relationships in an organization may be less rational than formal systems
(Johnson, 1993).
asset saleThe most widely understood Revenue Stream derives from selling ownership rights to a
physical product. (Osterwalder, 2010)
serviceThis Revenue Stream is generated by the use of a particular service. The more a service is
used, the more the customer pays. (Osterwalder, 2010)
advertisingThis Revenue Stream results from fees for advertising a particular product, service, or brand.
(Osterwalder, 2010)
Channels Type of channels
Revenue StreamsSeveral ways to generate revenue
streams
TURBLOG D2: Business Concepts and Models for Urban Logistics
8.2 ANNEX B
Urban business model canvas of each case study
Case study Mumbai, India
Food suppliers (family
members of clients,
canteens/catering services)
Employees of
dabbawala system
Railway services
Product manufactures,
service providers,
retailers
Delivery of lunch boxes
(or tiffin boxes) carried
by suppliers (Dabbawalas) where a
major part of the door to
door delivery system is
done using Mumbai‟s
public transport system
Punctual and reliable services all working days
of the year, with no
disruption of services.
Clean home cooked food
at cheap costs on a
regular, reliable and fast
service such that the food is at least warm when
they consume it.
The Dabbawala service does not make formal
contracts with its
clientele. The whole system relies on trust.
Service charges for a full
month collected in
advance.
The logistics business
thrives on the Mumbai employees whose needs
are to get a home
cooked meal respecting their culture and tastes.
Logistics service organised
in the informal sector
without any policy measure.
Co-operative movement
whose basic entity is the
Dabbawala.
The main cost items are wages, rail passes and rail
freight charges.
Each is charged between Rs. 400 to Rs. 700 per tiffin
per month for the service depending on customer
requirements, transport distances and economic conditions of the customer. Customised offerings
(larger lunch box, special diet requirements, etc.) are
charged separately.
n.a.
Case study Beijing, China
Food suppliers (family members of clients, canteens/catering services)
Employees of dabbawala system
Railway services
Product manufactures, service providers, retailers
Beijing Tobacco
Logistics Centre
The original district-
level distribution
centres
Cigarette factories,
enterprises and
retailers.
Storage, sorting and distribution of 38 billion
cigarettes for almost 36
thousand retailers in 18
districts and counties of
the city.
52,700m2 of production area, goods yard, parking
place, living area and other
functional areas.
The overall transport routes have been reduced,
the waste of transport
resource caused by “one-
spot with multi-routes” has been eliminated;
Time and energy have
been saved for industrial enterprises, and has been
improved.
The complexity of internal management of
business departments
has reduced. Customer
managers‟ time and energy are saved.
Customers have better
marketing services.
Direct distribution to
70% cigarette retailers within 45km of city (65%
of sales volume of
whole city) and relay-based distribution to
other retailers in
districts and counties
beyond 45km (30% of cigarette retailers of
whole city and 35% of
sales volume of whole
city)
Storage rentals savings, distribution costs were reduced. The number of logistics staffs was reduced,
representing saved costs in labour cost per year. The
distribution vehicles reduced and the direct economic
cost was reduced by 34,626 million Yuan.
Warehouse rent, distribution cost, labour cost, and
operational cost
n.a.
Environmental storehouse
design reducing the environmental load, saving the land through adopting high
shelf storehouse technology; environmental transportation design, scientifically planning the distribution routes,
cutting down the length of transportation routes, reducing transportation
frequency, improving the load ratio of vehicles and saving energy and reducing emissions.
Case study Belo Horizonte, Brazil
COMAM, traders of
supermarkets and
Hypermarkets, shopping centre retailers,
industrial and freight
transport enterprises,
landfills and recycling solid waste´s plants,
racetracks, race courses
and sports stadiums, graveyards, slaughter
houses, prisons,
headquarters, bus
stations, rail and airline transportation, industrial