Business Concepts and Models for Urban Logistics

8/10/2019 Business Concepts and Models for Urban Logistics

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Grant Agreement n.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, Inovao e Sistemas, S.A.

Version 1.0

Project co-funded by the European Commission within the Seventh Framework Programme

Dissemination Level

PU Public XPP 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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Foreword

This TURBLOG Deliverable 2 was produced by TIS.PT (Rosrio Macrio, Maria Rodrigues, and Ana and received contributions from the following members of the consortium:

Cesar Lama, PTL UNI, PeruPaul Timms, ITS Leeds, UKMarcelo Cintra do Amaral, BHTRANS, BrazilGeraldo Abranches, BHTRANS, BrazilJarl Schoemaker, NEA, NetherlandsNathaly 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 world wide

perspective. Deliverable 2: Business Concepts and models for urban logistics .

QUALITY CONTROL INFORMATION:

Version Date Description0.1 20/08/2011 Draft version of TURBLOG D2 for partners comments0.2 10/09/2011 Draft version of TURBLOG D2 after partners comments0.3 16/09/2011 Final version of TURBLOG D 20.4 30/09/2011 Final version TURBLOG D2 for quality control0.5 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


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TABLE OF CONTENTS

Executive summary .......................................................................................................... 7

1 Introduction ............................................................................................................. 9

1.1 Overview .......................................................................................................... 9

1.1.1 Objective of the report ..................................................................................... 10 1.1.2 Methodological approach of WP2 ......................................................................... 10

1.2 Scope of the report ............................................................................................. 13

1.3 Report structure ................................................................................................ 15

2 Applying business models to urban logistics ...................................................................... 16

2.1 Objectives ........................................................................................................ 16

2.2 Definition of business models ................................................................................. 17

2.2.1 What is a business model? .................................................................................. 17

2.2.2 Why apply business model definition and components to urban logistics? ........................ 17

2.2.3 Business model Theoretical framework .................................................................. 20

2.2.4 Role of Public Policies ...................................................................................... 24

2.3 Methodological approach of business models .............................................................. 25

2.4 Comparison of case studies business models ............................................................... 27

2.4.1 General Comparison of the Case Studies Business Models ............................................ 27

2.4.2 Main findings from the Comparison ....................................................................... 31

3 Definition and establishment of logistic profiles ................................................................ 34

3.1 Objectives ........................................................................................................ 34

3.2 MethodologIcal Approach of logistic profiles .............................................................. 35

3.2.1 City area features ........................................................................................... 36

3.2.2 Product characteristics ..................................................................................... 36 3.2.3 Agents profile / Deliveries profile ........................................................................ 37


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3.3 Definition and characterisation of the logistic profiles .................................................. 38

3.3.1 Profile A: Cluster of shops specialised in one specific type of service/product .................. 41

3.3.2 Profile B: Hotels, restaurants, small grocery stores, small neighborhood markets .............. 42

3.3.3 Profile C: Business centre .................................................................................. 43

3.3.4 Profile D: Large commercial stores ....................................................................... 44

3.3.5 Profile E: Residential areas with local trade............................................................ 45

3.3.6 Main differences between logistic profiles .............................................................. 46 3.4 Comparison of case studies logistic profiles ............................................................... 48

4 Adjusting business models to logistic profiles .................................................................... 53

5 Identification of dynamic mechanisms for BM implementation and transferability ....................... 56

6 Concluding remarks ................................................................................................... 63

7 References .............................................................................................................. 66

8 Annexes ................................................................................................................. 67

8.1 Annex A ........................................................................................................... 67

8.2 Annex B ........................................................................................................... 67

8.3 Annex C ........................................................................................................... 67


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INDEX OF TABLESTable 1 Comparison of Business Models characteristics ........................................................... 28

Table 2 City area features ............................................................................................... 36

Table 3 Product characteristics ........................................................................................ 37

Table 4 Agents profile/deliveries profile ............................................................................. 37

Table 5 Logistic Profiles.................................................................................................. 39

Table 6 Characteristics of Profile A .................................................................................... 41

Table 7 Characteristics of Profile B .................................................................................... 42

Table 8 Characteristics of Profile C .................................................................................... 43

Table 9 Characteristics of Profile D .................................................................................... 44

Table 10 Characteristics of Profile E .................................................................................. 45

Table 11 Comparison between logistic profiles characteristics .................................................. 47

Table 12 Logistic profiles identification and comparison .......................................................... 50

Table 13 - Relationship between Logistic Profiles and Business Models........................................... 53

Table 14 - Combination of Logistic Profiles with the most suitable business models ........................... 54

Table 15 Comparison of the policies adopted, logistic profile identified, the business model maincharacteristics and the impacts evaluation per good practice case study. ................................. 58

Table 16 Policies according to the combination of logistics profiles with the most suitable businessmodels ................................................................................................................... 61

INDEX OF FIGURESFigure 1- Methodological approach of WP2 ............................................................................. 10

Figure 2 - Methodological approach of Work package 2.............................................................. 12

Figure 3 - Selected cities for the case studies ......................................................................... 14

Figure 4 Agents from urban logistics and land use system ......................................................... 19

Figure 5 Core areas of a business model .............................................................................. 20


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Figure 6 Business Model adapted from Osterwalder ............................................................. 21

Figure 7 Urban Logistics Business Model .............................................................................. 26

Figure 8 Definition of logistics profile ................................................................................. 34

Figure 9 Relation between business models and logistic profiles................................................. 54

Figure 10 Relationship between business models, logistic profiles and impacts from the measures ...... 56


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EXECUTIVE SUMMARYFrom a general point of view the objectives on urban freight can be grouped along the following aspects:Economic (income, price, market share, system wide effects), Efficiency (minimising transport costs),Safety, Environmental, Infrastructure. Such dimensions constitute the core issue under which acomparison of different business concepts and models was undertaken in this research work. For thecharacterisation and comparison of business models theOsterwalder (2004) business model was used as astarting point. By applying this business model canvas, the first drawback faced relates to the lack ofreference to externalities which is a very relevant outcome of urban freight transport that cannot beignored. Therefore, the business model was adapted to include a 10th building block to coverexternalities generated.

Logistic profiles were defined. This concept is based on Macrio (2007) who supported the hypothesithat, within a city, it is possible to identify areas with homogenous groups in terms of logistical needs,based on three key variables: the urban characteristics of the area, the requirements of the logisticagents, and the characteristics of the products they transact / type of delivery. Five Logistic Profileswere defined:

Profile A: cluster of shops specialized 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 application of these two tools for enhancement, together with the cross comparison of the mainimpact of the selected measures, enabled us to draw conclusions and identify the following:

Which business models are best targeted for urban logistics;The logistic profiles of the case studies;The dynamic mechanisms that can be applied.

Both analyses were elaborated with the different case studies presented in D3 as a reference,incorporating the following case studies:

Paris, France: Chronopost Concorde, La Petit Reine, Monoprix and the Freight Oriented UrbanMaster Plan of Paris;

Utrecht, the Netherlands: four measures that are part of a greater urban distribution policy

package. These are the Low Emission Zone ; the City Distribution Centres ; the Beer Boat and theCargohopper;


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Belo Horizonte, Brazil:Requirements of loading and unloading spaces inside companies withlarge traffic movements and Internet/telephone sales and deliveries from producer to customerthrough planned routes ;

Mexico City Metropolitan Area , Mexico:Public policies for urban logistics;

Santiago de Chile, Chile: Abertis Logistics Park;

Tokyo, Japan: Shinjuku joint delivery systems;

Beijing, People's Republic of China:Beijing Tobacco Logistics Centre;

New York, United States of America:Off-hour delivery program programme;Mumbai, India: the Mumbai Dabbawalas.

Most of the urban logistic practices that were presented in case studies and that were used to test ourmethodologies refer to urban city centres (Profile C), which usually face problems such as bad logisticaccesses and high levels of congestion. At the end of this report, the logistic profiles were crossedreferenced with the business models, which were then grouped into three different types of urbanlogistics solutions:

Optimisation/Intermodal distributionLogistic Parks/CentresLast mile solutions/Micrologistics Centre

From this analysis, it was possible to analyse the relationship between the types of business models, thetypes of logistic profiles and the impact evaluations of the measures from the selected case studies.Furthermore, it was possible to identify the measures with positive impacts and the associated businessmodels, logistic profiles and policies that allowed the identification of better targeted policies towardsurban logistics.

The main findings of this report show that the most suitable logistic solution is defined not only by thebusiness characteristics, but also by the delivery, product and city area features (logistic profile), as wellas the policies adopted/to be adopted for the city. It is the combination of these three pillars thatconstitute the backbone of the decision making for best urban logistics solutions.


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1 INTRODUCTION

1.1 OVERVIEW

Although urban mobility involves the movement of both people and goods, in most cities, those who areresponsible for urban transport policy and planning have historically paid more attention to themovement of people (developing many explicit ways of facilitation) and less attention to the movementof goods. In spite of this general observation many cities around the world have tackled aspects of urban

freight in an attempt to solve particular or local issues or have used urban freight policy to helpcontribute to the broader transport or urban objectives. As Ogden (1992) states the explicitconsideration of urban goods movements has the potential to contribute in a useful and positive way toachieving both the goals of urban transport and some of the broader goals of urban policy and planning.

As acknowledged by the European Commission Thematic Strategy on Urban Environment, urban freigrepresents typically between 20% and 25% of road space use (space used x hours) contributing to betwee10% and 20% of urban road traffic (vehicle x kilometres). This clearly highlights how indispensable urbfreight is for the economy of the city, but also how it may significantly affect the attractiveness andquality of life in urban areas (i.e. noise, pollution, congestion).

From a general point of view the objectives on urban freight can be grouped along the following aspects:Economic (income, price, market share, system wide effects), Efficiency (minimising transport costs),Safety, Environmental, Infrastructure and Urban Structure. Such dimensions constitute the core issuesunder which a comparison of different business concepts and models will be realised. This will be doneusing the different case studies as a reference.

From that assessment, a definition and establishment of logistic profiles will be done. This concept isbased on the hypothesis that, within a city, it is possible to identify areas with homogenous groups interms of logistic needs, based on three key variables: the urban characteristics of the area, therequirements of the logistic agents, and the characteristics of the products they transact / type ofdelivery (Macrio, 2007). Furthermore, the definition of these profiles will be done taking as the overallbackground, its contribution for the urban sustainability, as seen from the 3 Ps perspective - people,planet, and profit.


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1.1.1 OBJECTIVE OF THE REPORT

The objective of this report is to describe the work undertaken under work package 2 and to present themain findings about the identification of which business models are best targeted for urban logistics, theidentification of the logistic profiles of the case studies and the identification of the dynamic mechanismsthat can be applied for business models implementation and transferability. This will be done using theselected case studies from Deliverable D3 as a reference.

The main goals are twofold:

Compare the different business concepts and models identified in the different case

studies, taking also into account the different organisational and institutional settingsbehind it, and

Contribute to the definition and establishment of logistic profiles taking into account thethree key variables that frame those logistic profiles (agent needs, characteristics of theurban area and characteristics of the products/type of delivery).

1.1.2 METHODOLOGICAL APPROACH OF WP2

This report compiles the work undertaken in Work package 2 - Business concepts, with which input wareceived from the regional reports and case studies and feedback from the workshops. This work packagewas composed by 4 tasks, being the last task the synthesis of main findings and good practices wasidentified. This last task is the wrap up of the other 3 ta sks: a) delimitation of scope for businessmodels and schemes; b) definition of logistic profiles and c) identification of dynamic mechanisms forbusiness implementation and transferability.

Figure 1- Methodological approach of WP2


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To accomplish the objectives presented in chapter 1.1.1, the adopted methodological approach of WP2 isillustrated in the figure below (see 1.1.2).

Regarding the definition of the business models, a theoretical framework was adapted and the businessmodel canvas was applied to the case studies on good practices taken from Deliverable D3 (available atwww.turblog.eu), defining the scope and each case study business model.

For the logistic profile definition, a classification scale was determined and five logistic profiles wereestablished. An excel based tool for the logistic profile identification was designed and applied to allselected case studies from Deliverable D3.

The application of these two tools for enhancement, together with the cross comparison of the mainimpact of the selected measures, enabled us to draw conclusions and identify the following:

Which business models are best targeted for urban logistics;

The logistic profiles of the case studies;

The dynamic mechanisms that can be applied.
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TURBLOG D2: Business Concepts and Models for Urban Logistics 12

Figure 2 - Methodological approach of Work package 2


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1.2 SCOPE OF THE REPORT

As it is presented in the previous chapter, this report has applied two different tools - Urban LogisticBusiness Model and Logistic Profile Template to the case studies selected in Deliverable 3 (see figure 2)to be able to compare business models and logistic profiles:

Paris, France: Chronopost Concorde, La Petit Reine, Monoprix;

Utrecht, the Netherlands: from the four measures that are part of a greater urban distributionpolicy package, the selected good practices were: the Beer Boat and the Cargohopper;

Belo Horizonte, Brazil:Internet/telephone sales and deliveries from producer to customer through planned routes ;

Santiago de Chile, Chile: Abertis Logistics Park;

Tokyo, Japan: Shinjuku joint delivery systems;

Beijing, People's Republic of China:Beijing Tobacco Logistics Centre;

New York, United States of America:Off-hour delivery program programme;

Mumbai, India: the Mumbai Dabbawalas.The definition of the business models is done according to a methodology that cannot be applied topolicies and/or regulations and therefore some case studies could not be considered. Also, the logisticprofile characterisation is done according to the city area features, the agent profile/deliveries profileand product characteristics, and due to that, some good practices from the case studies could not beconsidered as they are not associated to a product or service or to a specific area. This is the case of theregulations investigated, such as:

Mexico City Metropolitan Area , Mexico: Freight Transport Regulation Programme and Vehicle

Verification Programme (Public policies for urban logistics);

Belo Horizonte: Requirements of loading and unloading spaces inside companies with large traffic

movements;

Paris: Freight Oriented Urban Master Plan of Paris;

Utrecht, the Netherlands: Low Emission Zone ; the City Distribution Centres definition.


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Figure 3 - Selected cities for the case studies Source: TURBLOG D3 (2011)


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As Deliverable D3 has already been mentioned, it is important to note that there might be betterpractices known in other cities or countries in the world. However, the cities mentioned above havebeen selected for a number of reasons. First, in order to present a broad variety of urban logisticspractices around the world, both in developed countries as well as in less developed countries. Eachcity is also different with regard to its characteristics (for instance size, important economic sectors,transport infrastructure and traditions). Each case study also presents one or more types of goodpractices, which vary from the practices presented in the other case studies. Some of the cases werealso consciously chosen due to the specialty of country. For example, Mumbai is well -known for itslunchbox delivery system and Tokyo for its co-operative distribution systems.

The next chapters describe the work developed in work package 2 and the findings from the resultsachieved.

1.3 REPORT STRUCTURE

The structure of this report involves the following chapters. Chapter 2 describes the adopted businessmodel framework that was applied to the case studies and makes a comparison of the case studybusiness models.

Chapter 3 consists of the definition and establishment of five logistic profiles based in the a) city areafeatures, b) product characteristics and c) agents profile/deliveries profile. It also presents the casestudies logistic profile characterisation and their comparison.

Chapter 4 presents how the business models and the logistic profiles are related and identifies thebusiness models that are more suitable to the logistic profiles established.

Chapter 5 identifies the dynamic mechanisms for business model implementation through the relationbetween impact evaluations, business models, and logistic profiles. This relation enables the

identification of the more adequate policies to each business model and logistic profile, according tothe impact evaluation that was made in Deliverable D3.

Finally, Chapter 6 provides the concluding remarks of the work developed within WP2, identifying whichbusiness models are best targeted for urban logistics, the logistic profiles of the case studies and thedynamic mechanisms that can be applied.


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2 APPLYING BUSINESS MODELS TO URBAN LOGISTICS

2.1 OBJECTIVES

The purpose of applying business model concepts to urban freight logistics is derived from thesimilarities between the business model definition and components, and the urban freight logisticsprocesses.

The objective is to identify which business models are best targeted for urban logistics through theanalysis of the business models of the case studies from Deliverable D3 (available at www.turblog.eu).

To accomplish this objective, the case study business models had to be described according to acommon framework business model canvas from Osterwalder. This methodological framework isbased on 9 building blocks (see chapter 2.2.3), related to a set of parameters that include:

the products and/or services to be provided,

the means by which such products/services will be provided,

the mechanisms by which opportunities could be exploited,

the different actors / agents, roles and relationships,

the financial flows, investments and incentives.

After the description of the business model of each case study, a comparison of the business modelcharacteristics has been performed in order to compare the different business models from the casestudies, finding similarities and differences among them (see chapter 2.4).

The next chapters present the methodological approach that has been used, adopted definition of thebusiness model, the rationale of why applying business models to urban logistics, the theoretical

framework for describing the business model of a case study and characteristics that could beevaluated to compare business models.
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2.2 DEFINITION OF BUSINESS MODELS

2.2.1 WHAT IS A BUSINESS MODEL?

Based on the literature review of business models, there is no universal definition, neither consensuson the definition and components of a business model.

Diversity in the available definitions poses substantive challenges for delimiting the nature and

components of a model and determining what constitutes a good model. It also leads to confusion in

terminology, as business model, strategy, business concept, revenue model, and economic model are

often used interchangeably. Moreover, the business model has been referred to as architecture,design, pattern, plan, method, assumption, and statement. ( Morris, M.; Schindehutte, M., Allen, J.2003)

As no consensus exists for the definition and components of abusiness model, in TURBLOG thedefinition from Osterwalder & Yves Pigneur (2010)was adopted where a business model describes therationale of how an organisationcreates, delivers, and captures value.

2.2.2 WHY APPLY BUSINESS MODEL DEFINITION AND COMPONENTS TO URBANLOGISTICS?

In general, in urban logistics, it is possible to identify 3 common goals of all agents in urban logistics:Efficiency of urban freight transportation;Reduce traffic congestion;Mitigate environmental impacts.

Although urban mobility involves the movement of both people and goods, in most cities, those who

are responsible for urban transport policy and planning have historically paid more attention to themovement of people (developing many explicit ways of facilitation) and less attention to themovement of goods. In spite of this general observation many cities around the world have tackledaspects of urban freight in an attempt to solve particular or local issues or have used urban freightpolicy to contribute to broader transport or urban objectives. As Ogden (1992) statesthe explicitconsideration of urban goods movements has the potential to contribute in a useful and positive way


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to achieving both the goals of urban transport and some of the broader goals of urban policy and

planning.

If we consider that a business model describes the rationale of how an organisation creates, delivers,and captures value, there is a huge similarity with the urban freight delivery process. In the urbanfreight delivery process there is an organisation (private or public or both businesses) creating,delivering and capturing value through a product or a service.To a greater degree, the study of urban freight tasks is enormously complex and heterogeneous,involving an interdisciplinary engagement as a consequence of the difficulty to identify the commonfeatures between the requirements of different users and vehicle operators. Furthermore, urban

freight is strongly interrelated with many other aspects of the urban system: urban passenger system,land use, regional development, socio-economic environment, employment, etc. Thus, it is necessary,when considering urban freight planning, to devote some effort towards understanding its integrationwithin urban mobility planning. As pointed out by Macrio and Caiado (2005),acting on urban logisticsdomains implies intervening in different aspects of urban mobility management, particularly

institutional, regulatory, social, infrastructural and technological, therefore requiring the joint and

coordinated action of the different stakeholders in the urban logistics arena .

The scheme below illustrates the relationships between the agents related to urban freight, togetherwith the layers that correspond to the components of transportation and land use systems.Understanding the relationships between the agents of the logistics activities and the major elementsthat influence the urban logistics is very important to know the functioning of the urban system anddefine the most feasible logistic business.


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Figure 4 Agents from urban logistics and land use system

Source: Rodrigues, 2006

Logistic organisations have no incentive for engaging sustainable solutions, because the costs they areresponsible for are partly supported by the whole society, as externalities. This raises the need forregulation, so that externalities are properly incorporated in the activities that are causing them.Understanding their business model could be the basis for a better targeted strategic decision of theagents and all the different activities involved.

The following chapter presents the business model theoretical framework that was applied to the case

studies to describe the business models.


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2.2.3 BUSINESS MODEL THEORETICAL FRAMEWORK

The theoretical background that represents the departure base for our analysis is the business modelframework developed by Osterwalder (2004). This framework has already been successfully applied andvalidated in several organisations such as IBM, Delloite, Erickson and so on. The logic within thismethodology is to describe the business model through nine building blocks that show how anorganisation creates, delivers, and captures value.Influenced by the Balanced Scorecard approach (Kaplan and Norton 1992) and more generally businessmanagement literature (Markides 1999), Osterwalder suggests adopting a framework which emphasiseson the following four areas that a business model should address:

Figure 5 Core areas of a business model

Infrastructure Management: how the company efficiently performs infrastructural or logisticalissues, with whom and as what type of network enterprise;Product: what business the company is in, the products and the value propositions offered tothe market;Customer Interface: who the companys target customers are, how it delivers their productsand services, and how it builds a strong relationships with them;Financial Aspects: what is the revenue model, the cost structure and the business models sustainability.

Those four areas can be easily transferred to urban logistics, as urban logistics also involves a businesswith a product or a service to be delivered from a producer/supplier (that aims to minimise the costsand increase the profit) to the customer. The four areas described resulted in the 9 building blocks ofthe business model that is presented in the figure below. Each building block is described in detail tocreate a clear understanding of the application of this tool in the case studies.


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Figure 6 Business Model adapted from Osterwalder

According to this framework, on the right side we have the customer and the communication channelsand relationships that are needed for a product/service to reach the customer.

On the left side, we have the organisation/partnerships and the activities and resources needed tomake a product/provide a service.

In the middle we have the most important piece, which is the customers needs/whishes and therefore,

what the producer/supplier have to offer the product/service that are of value to the customer.


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For whom is the organisation creating value?

Starting by the right side, the customer segments are defined by the people or groups of people thatthe organisation1 aims to reach with their product/service. To better satisfy the customers, anorganisation can group them according to similar needs and behaviours. In TURBLOG, the customersegment types are: mass market , segmented and multi side market.

What value does the organisation deliver to the customer?

The value proposition corresponds to the product or service that the organisation has to create for the

customer. This is a rather important element because it has to solve a problem and/or satisfy a need.In TURBLOG, the elements that we considered that can contribute to the value creation are:performance/efficiency, customization, reliability, price, cost reduction and accessibility.

How does the organisation reach the customer?

The channels can be defined as the ways the organisation uses to get in touch with the customer. Thechannels are a valuable communication tool to raise awareness about the product/service, to enablethe customer to buy the product/service, etc. In TURBLOG, three types of channels are considered, the

direct channels (e.g. sales force), the indirect channels (e.g. wholesaler) and the informal channels .

What type of relationship is established between the organisation and the customer?

Besides the channels, the other building block that makes the bridge between the value propositionand the customer is designated bycustomer relationship and describes the type of relationships thatexists. In TURBLOG three types of relationships are considered:personal assistance, self-service/automated services and collaborative .

1 For the description of the framework, whenever we would like to mention the producer/supplier of the urbanlogistic chain, we will mention the organisation.


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What value are the customers paying?

The revenue streams describe how an organisation makes money. In TURBLOG, there are three ways ofgenerating revenues streams, namely:asset sale, service and advertising.

What does the organisation need to create value?

The key resources are the inputs that are needed in a business model to make it work. The keyresources can be physical, financial, human and know how.

What are the key activities that must be taken?

There are key activities /actions that should be performed so that the organisation operatessuccessfully. The difference between key resources and key activities is that the resources are oftenneeded to perform the activities. In urban logistics we consider three types of activities: production,distribution and supporting activities.

Who are the organisation partners?

The organisation is often made up of a cooperative network of suppliers/producers/wholesalers/city

authorities and so on that create alliances according to each partners needs/wishes, to optimize theirbusiness model, reduce the risk or acquire resources. The type of partnerships can be: strategicalliances between non competitors, partnerships between competitors, joint ventures to develop newbusinesses or buyer-supplier relationships.

What are the costs associated to the business model?

The cost structure represents all the costs incurred by the organisation to run the business model,namely with the key partnerships, key resources and key activities. In TURBLOG, the costs can be

classified as fixed costs, variable costs, and sunk costs.The definitions of the elements used to characterise each one of the building blocks used to describethe business model can be consulted in Annex B.


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2.2.4 ROLE OF PUBLIC POLICIES

While the role of private companies (e.g., producer, supplier, transport operators, retailer, etc) is theproduction and the transport of urban freight, the role of the public policy is regulation andfacilitation.

The role of the private sector consists in the private initiatives, such as cooperation amongst agentsand can be part of an urban freight transport policy (cooperation between public and private parties),particularly when public measures are taken to support this. Usually, technology issues and design andimplementation of information systems can be public or private. The implementation of measures canbe supported by making correct behaviour more attractive (financial support and licensing) or bydiscouraging other behaviour (pricing and regulation). The implementation of these public policiesmakes use of those 3 tools a) pricing, b) licensing and regulation and c) financial support.

Being known in the field of (urban) freight transport it is necessary to contemplate not only theexistence of several types of stakeholders but also a considerable number of public policies. InTURBLOG the types of public policies considered are:

Enforcement and promotion, e.g. law and regulations enforcement;

Traffic management (+ vehicle), e.g. vehicle size/type and time window restrictions for vehicleemissions movement standards, subsidies for low emission vehicle, fuel taxes;

Access conditions, e.g. loading and unloading duration, time and access restrictions;

Land use management, e.g. zoning for logistic activities, land use pricing/subsidies;

Public infrastructure, e.g. new infrastructure for freight, truck routes.


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2.3 METHODOLOGICAL APPROACH OF BUSINESS MODELS

To fulfil the objective of identifying the business models better targeted for urban logistics , thecanvas described in chapter 2.2.3 was applied to the case studies of Deliverable D3 (available atwww.turblog.eu), identifying the 9 building blocks of each case study and taking into account thedifferent organisational and institutional settings.

When applying the BM canvas, the first finding is that this business model is profit oriented, however inurban logistics the cities have other concerns that are translated into policies that imposes that thebusiness models take environmental and social impacts into account. The policies targeted to urban

logistics that a city can adopt are;Environmental impacts

o Reduce pollution;

o Reduce the freight vehicles trips (- km);

o Reduce noise;

Social impacts

o Improve the quality of life;

o Reduce accidents;

o Reduce congestion;

o Improve working conditions.

These impacts were considered externalities and so the BM was adapted to include a 10th buildingblock to cover these issues (see the business model adapted to urban logistics in the figure below).
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Figure 7 Urban Logistics Business Model

Source: TIS.PT, 2011

After the definition and application of the canvas to each good practice case study, all business modelswere classified according to the categories presented in the table below. This classification enabledthe identification of the main characteristics and allowed the comparison of the business models of

each case study (see Table 11).


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2.4 COMPARISON OF CASE STUDIES BUSINESS MODELS

2.4.1 GENERAL COMPARISON OF THE CASE STUDIES BUSINESS MODELS

According to the methodology described above, the analysis and comparison between the severalbusinesses models presented in the nine case studies from Deliverable D3 has been completed. Thisanalysis of the business model characteristics was done using the framework developed byOsterwalder, as a starting point and as presented below.

After the definition and application of the Urban Logistics business model canvas to each good practice

case study, all business models were classified according to the categories presented in the tablebelow. This table presents a summary of all business models characteristics with the major outputs ofeach case study allowing the comparison of the results between all business models. The definitions ofeach business model building block classification item is presented in Annex A.


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Table 1 Comparison of Business Models characteristics


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A Chronopos t in Paris, France F Joint delivery systems in Tokyo, JapanB Monoprix Ra il Project, Paris , France G Cargohoppe r in Utrecht, The Netherla ndsC La petite Reine i n Paris, France H The Beer Boa t in Utrecht, The Netherla ndsD Beijing Tobacco logistics centre, China I Abertis Logistics Park in Santiago, ChileE Mumbai Dabbawalas , India J Sale and delivery from producer to customer in Belo Horizonte, Brazil

Considering theKey Partners , from all case studies analysed, the Dabbawalas and all the logisticimprovement measures analysed in the Paris and Utrecht case studies were successful because theywere implemented through strategic alliances between the companies and the Municipality. In order tooptimise their services, Beijing Tobacco Centre, Abertis Logistic Park in Santiago and the Joint DeliveryCentres in Tokyo rely on partnerships between competitors. The Mumbai Dabbawalas and the BeloHorizonte businesses consider sale and delivery of organic products from the producer to the finalconsumer and have typical buyer-supplier relationships.


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Key Activities were divided into Production, Distribution and Supporting Activities. All logisticpractices analysed considerdistributions as a key activity, with the exception of Abertis Logistic Parkwhich only involves warehousing and other supporting activities. Besides the distribution activity, theBelo Horizonte logistic business also considers production. The Monoprix rail project in Paris and BeijingTobacco Centres also comprise more than one activity, adding to the distribution supporting activities,mainly related to warehousing operations.

Key Resources are mostly physical resources but also human and know-how (Dabbawalas in Mumbaihave their own code system; Abertis Logistics Park in Santiago takes advantage of the most up-to-dateconstruction standards).

The Cost Structure is very similar in most of these businesses; they all have fixed costs (salaries,renting and so on.) and variable costs (for example some operating costs such as combustibles).Logistic measures considering last mile solutions (Paris and Utrecht and Tokyo case studies) also havesunk costs related with the internalisation of the externalities, as will be further described.

In regards to the Customer Relationship , there are no logistic practices with self-service or automatedservices. So, the business models studied have a customer relationship divided into personal assistance(Chronopost and La Petite Reine in Paris, Mumbai Dabbawalas, Joint Delivery Centres in Tokyo, BeloHorizonte sale and distribution of organic products) and collaborative (Monoprix in Paris, BeijingTobacco Centre, Cargohopper and Beer Boat in Utrecht, and Abertis Logistic Park in Santiago).

Concerning the Customer Segments , most of the logistic practices presented have their businessesdirected towards the mass market. La Petite Reine in Paris and Belo Horizonte analysed and dividedtheir customers into different segments. As the Cargohopper and the Beer Boat (Utrecht) serve two ormore interdependent Customer Segments, it was considered a multi-faceted market.

The most referenced Value Propositions of these businesses is performance/efficiency. However, inurban logistics solutions cost reductions and accessibility increases are also major targets, especially

concerning logistic Parks such as the Tobacco Centre in Beijing and Abertis Logistic Park in Santiago.Cost reduction was also a value proposition induced from the Chronopost Case Study business model(Paris). For the Mumbai Dabbawala customers, the most added value of this service is customisation,reliability and price of the product.

From the Case Studies presented in Deliverable 3, is not possible to conclude theChannels used in theUtrecht business models. Monoprix rail project (Paris) and Belo Horizonte organic food sale and


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delivery have their own stores. The last practice also sells its products through web force andwholesalers. The company La Petite Reine in Paris uses its own direct channels and indirect partners(partner stores/wholesaler), while Chronopost Concord only refers to its own direct channels. MumbaiDabbawalas is the only service that relies solely on informal communication with the customer.

The mainRevenue Streams are service fees, in some cases supplemented with advertising (ChronopostConcord and La Petite Reine in Paris, Cargohopper in Utrecht). The exceptions are the warehousingservices with asset sales (Beijing Tobacco Centre and Abertis Logistic Park) and the Beer Boat inUtrecht.

All of the business models studied present concerns related to theInternalisation of Externalities ,especially concerning congestion and decrease of truck-km.

2.4.2 MAIN FINDINGS FROM THE COMPARISON

In the Mumbai Dabbawalas case study the partnership between the suppliers and Dabbawalas is a co-operative movement whose communication with the costumer has remained unchanged for decades,and is exclusively informal, meaning, without any structured communication policy. The urban logistic

practice selected in the case study of Belo Horizonte presents a service that provides organic foodproducts through planned routes directly from the producer to the final consumer. However, from theanalysis of the different examples of successful urban logistic measures, it is possible to conclude thatmost 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 oftheir services as core value propositions.

Moreover, some business concepts were only effectively implemented because they were sustained bypublic administration policies, which provided availability of warehouse spaces or accessibilities and, insome cases, financial incentives, resulting in partnerships with the municipality or other governmentadministrations. It is the case of the new Monoprix logistics organisation including a rail segment withinthe transport chain, whose feasibility study was conducted on the initiative of the Direction Rgionalede l'Equipement and the Chronopost and La Petite Reine companies, which developed with theMunicipality of Paris the Urban Logistic Space concept. In order to meet the municipalityenvironmental requirements and restrictions, and also looking forward towards improving the serviceperformance, some companies developed joint ventures to develop these new services. This is also the


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case of the La Petite Reine company, which specifically developed the tricycle needed for its businesswith a local manufacturer, and the Beer Boat that is operating in the City of Utrecht. The need tooptimise resources and to also obtain other supporting services and infrastructures, leads topartnerships among competitors, such as in the case study of Japan, where the key partners areexclusively private. In these cases, the relationship with the costumer (business-business) is calledcollaborative, meaning, they share infrastructures and services expecting to exchange knowledge andproblem solving, which are common to other logistic companies.

In these business model comparisons three key activities in urban logistics were considered: Production(which basically consists in the design and processing of goods subject to a certain service),

Distribution and Supporting Activities such as warehouse renting. With the exception of the AbertisLogistic Park located in Santiago (Chile), all the businesses considered are mainly focused in thedistribution section of the logistics chain.

Key resources are therefore physical resources but also human and know-how (Dabbawalas in Mumbaihave their own code system, Abertis Logistics Park in Santiago takes advantage of the most up-to-dateconstruction standards). Some business models combine more than one activity such as the Beijing casestudy regarding the Tobacco Logistics Centre, which performs a uniform storage, centralised sortingand graded distribution of tobacco for the whole city.

This distribution service can be an undifferentiated service, serving a large group of customers withbroadly similar needs and problems (no costumer segments mass market), by providing differences inthe service considering groups of costumers with similar needs (for example La petite Reine hascontainers designed to carry refrigerated goods), or by serving two or more interdependent CustomerSegments, and in this case the customer segment is defined as a multi-faceted market (for example theBeer Boat in Utrecht serves different Companies according to the day of the week).

Considering the cost structure of the businesses studied, besides fixed and variable costs, in addition,costs related to the internalisation of externalities, such as environmental and social costs are key

issues. Thisespecially in last mile services, due to the strict municipality restrictions concerningenvironmental regulations in cities, such as Utrecht and Paris within the city centre. These investmentsare sunk costs. The revenues are mainly obtained through service fees, but some cases have advertisingas a second revenue, namely the Cargohopper (Utrecht case study) and the companies Chronopost andLa Petite Reine (Paris case study).


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As was already explained, several of the logistics improvement measures had to make investments innon-pollutant vehicles and noise reduction equipment that represent an increase of their transportcosts but dont increase their profit, due to environmental regulations and/or circulation restrictions ofthe city policies. Therefore, another block was added to the business modelnamed Internalisation ofexternalities. These externalities represent not only a cost, but also a value proposition f or thesebusinesses once they win a competitive advantage for being environmental ly friendly: TheCargohopper is a delivery solution that is allowed to enter into the environmental zone at any time inthe City of Utrecht and the Chronopost Concorde and La Petite Reine have the possibility to rent UrbanLogistic Spaces at low prices because they use green vehicles. These environmental investments arealso used as publicity and as a communication channel with customers and represent revenues tosociety in general, once they contribute to the overall environment.


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3 DEFINITION AND ESTABLISHMENT OF LOGISTIC PROFILES

3.1 OBJECTIVES

The objective of this chapter to undertake an assessment of the case studies best approaches andmore adequate participation formats, in order to define and establish the logistic profiles and the bestsolutions for each type.

The logistic profile concept is based on the hypothesis that it is possible to identify, for some well-defined areas inside a city, reasonably homogeneous groups of logistic needs, based on three keypoints: the urban characteristics of the area, the requirements of the logistic agents (i.e., therequirements concerning the type of delivery), and the characteristics of the products beingtransacted. The logistic profile of a given urban area is thus defined by the interaction of these threekey aspects. The definition of the logistic profile can therefore be summarised as ahomogeneous groupwith similar logistical needs (Macrio et al., (2007)).

The starting point of this framework of analysis is the definition of the logistics profile through thedefinition and identification of the 3 vertices of the scheme below.

Figure 8 Definition of logistics profile

Source: Macrio et al (2007)


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3.2 METHODOLOGICAL APPROACH OF LOGISTIC PROFILES

For the definition of logistic profiles it is necessary to identify the characteristics that will define thecity area features, the products characteristics and the deliveries profile in the first phase. For thecharacterisation of the city area it is necessary to identify the features that can represent any possibleconstraints, but also give a picture of the actual state of the art in terms of logistic conditions, such ascommercial density and homogeneity, logistic accessibility, or if there are any restrictions applied. Theproduct characteristics are the ones that can determine the type of vehicle to be used or if there areany restrictions, such as easiness of handling and special conditions; and finally the agents needs ordelivery profiles (for example ,frequency and urgency of deliveries).

Second, for the classification of the logistic profiles, it was necessary to set a scale, in order toquantify (or qualify) each of the features identified. Based on this classification, conditions are met toidentify and characterise the logistic profiles. These logistics profiles intend to be as comprehensive aspossible, so, there are some features considered crucial for the definition of the type of profile, whileothers can be left undefined. These undefined features were called grey areas. It is however veryimportant to compare all profiles, to ensure that they are independent from one another.

The purpose of the definition of logistics profiles is to identify what the features are that best suit the

conditions to the definition of the logistics profile. For each of these features a scale was set, asdescribed in the following sub-chapters.

After the profiles are clearly identified and characterised, the methodology has been applied to thecase studies addressed in D3 (available at www.turblog.eu ). The goal is to define the most appropriatelogistic profile, for each case study, in order to identify what measures optimise the logistics system,given the characteristics of the area, product and agent or deliveries profile. By doing this exercise, it

is possible to take the examples of successful measures in urban logistics, and associate them to theprofiles main features, so that in the end it is possible to identify the dynamic mechanisms for

business concepts, implementation and transferability (see chapter 5).
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3.2.1 CITY AREA FEATURES

The table below presents the classification of the city area features. For the identification of thelogistic profile, four city area features were considered: commercial density, homogeneity, logisticsaccessibility (based on the existence of measures implemented considering logistic needs and on thetraffic congestion), and if there is any kind of restrictions to the deliveries applied (for example timewindows for deliveries).

Table 2 City area features

1.1. Commercial density Low Medium High

70% Commercial face toresidencies/services/industry

1.2. Homogeneity Low Medium High

Several types of services and products Mix of residential areas with officesand commercial stores

Cluster of one type of service orsimilar products

1.3. Logistic acessibility Bad Reasonable Good

1.3.1. Measures consideringlogistic needs

Bad level of access between the shopand the parking (e.g. no loading bays)

Some specific measures consideringlogistic needs (e.g. loading bays nonexclusive)

Transport network suited for thelogistic needs (e.g. exclusiveloading bays)

1.3.2.Level of Congestion High level of traffic congestion

(Commercial speed < 3k m/h)Reasonable (High on peak hours) Low (Fluid traffic - commercial

speed >12km/h)

1.4. Restriction applied Yes No

Off-peak hours, week days, ...

Features Classification

3.2.2 PRODUCT CHARACTERISTICS

The products characteristics have a major influence on how t he deliveries are made, especiallyconsidering the easiness of handling and the conditions on how the product must be delivered (forexample, type of packaging, temperature needs, etc.), so they are closely connected to the deliveriesprofile. The following table presents the classification table for the features considering the productscharacteristics.


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Table 3 Product characteristics

2.1. Easiness of handling Difficult Reasonable Easy

2.1.1. Size Large (wheelbarrow, crane) Medium (> 1 person to carry one unit) Small (>1 unit per person tocarry)

2.1.2. Weight Heavy (wheelbarrow, crane) Medium (> 1 person to carry one unit) Light (>1 unit per person tocarry)

2.1.3. Holding conditions Difficult Reasonable Easy

2.2. Special conditions Special needs Might have special needs No special needs

e.g. valuable products, frozenproducts, etc..

e.g. open packages, if food handledambient 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 ofdeliveries. This will determine the frequency of the deliveries, and, together with the amounts to bedelivered (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 Many3.3.1. 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


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3.3 DEFINITION AND CHARACTERISATION OF THE LOGISTIC PROFILES

The objective of the identification and characterisation of the logistic profiles is to clearly identifysimilarities between characteristics that are common to various locations, product types and deliveriesprofile in order to be able to identify examples of measures that can be transferred and replicatedelsewhere. 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 considereddeterminant 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 thecirculation of goods vehicles. However, there is one profile that differs from the others, due to theparticularities 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 thatfulfils the requirements to fit in the profile, in other words, the definitions objective is intentionallyas broad as possible, so there are some characteristics that were considered as key features to definethe profile, while others can be left open (consideredgrey areas).


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Table 5 Logistic Profiles

Profile A Profile B Profile C Profile D Profile E

Cluster of shops specialized in one specific

type of servi ce/product: ex. a neighborhoodthat is known for furniture stores, craft or artpieces, 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


Cluster of shops specialized in one specifictype of servi ce/product: ex. a neighborhoodthat is known for furniture stores, craft or artpieces, technological pole.

Hotels, restaurants, smallgrocery stores,neighborhood markets

Business center (courier, smalldeliveries, B2C)

Large commercial (retail,shopping centers,distribution warehouses)

Residential areas with localtrade

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 needs2.2.1. 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


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Cluster of shops specialized in one specifictype of servi ce/product: ex. a neighborhoodthat is known for furniture stores, craft or artpieces, technological pole.

Hotels, restaurants, smallgrocery stores,neighborhood markets

Business center (courier, smalldeliveries, B2C)

Large commercial ( retail,shopping centers,distribution warehouses)

Residential areas with localtrade

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 N o de fi ne d routi ne /De fi ne d routi ne De fi ne d routi ne N o de fi ne d routi ne /De fi ne d routi ne De fi ne d routi ne No de fi ne d routi ne

Grey Areas - Features that are not considered relevant for de definiti on of the Logistics Profile

3. Agent Profile/DeliveriesProfile


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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 orservice. The city area with this profile can be for example a neighbourhood with several designfurniture shops, crafts or art pieces.

There can be some cases where the establishments and offices have started to arise organically and thecommercial density has increased in a way that the area no longer has the capacity to guarantee agood 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 Per, Victor Plaza

Commercial densi ty High

Homogeneity High

Logistic acessibi lity Reasonable/Bad

Measures consideringlo istic needs

Some measures considering logisticneeds

Level of Congest ion 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 figuresbelow.


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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 perishableand 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 theproducts, 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

Spe cial conditions Special ne eds

Fragility Fragile

Perishability Perishable

Urgency of deliveries Urgent

Frequency of deliveries High

Amounts to be delivered Several

Planned de liveries Defined routine

Profile BCity Area Features



Source: www.fito.com.br

Organic Product Company in Belo Horizonte,Brazil delivers organic products, mostly greensdirectly from the producer to the final consumer.Some aspects of the products involved in thispractice are the ones that fit into profile B:

High fragility;Extremely perishable (the products lastapproximately 4 to 10 days); Difficulty ofhandling;The products need to be kept at a specifictemperature.
http://www.fito.com.br/http://www.fito.com.br/http://www.fito.com.br/http://www.fito.com.br/


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3.3.3 PROFILE C: BUSINESS CENTRE

A central business district (CBD) is the commercial and often geographic heart of a city, usually typifiedby a concentration of retail, commercial buildings and offices. It can concentrate all sorts of publicbuildings such as administration and social amenities (cinemas, theatres, etc.). It is normally wellconnected by public transport, but, once this area is located in the city centre, it is very densely builtand the road traffic levels are very high, especially during peak hours, causing congestion andtherefore the logistic accessibility may not be facilitated. In many cities this Profile can alsocorrespond to the denominated downtown, or city centre.

In these areas, the products and services are very diverse, so there were considered in this profile thetype of products that are typical in all kind of offices and small businesses, such as courier, smalldeliveries, which represent mostly B2C approaches.

Table 8 Characteristics of Profile C

Commercial density High

Homogeneity Low

Logistic acessibi lity Reasonable/Bad

Restriction applied Yes

Easiness of handling Easy

Special conditions No special needs

Urgency of deliveries Relevant/Urgent

Frequency of deliveries High

Amounts to be delivered Few/Several


Profile CCity Area Features



http://en.wikipedia.org/wiki/Central_business_district

The examples that better illustrate this profileare the CBD of highly populated cities such asNew York or Singapore.
http://en.wikipedia.org/wiki/Central_business_districthttp://en.wikipedia.org/wiki/Central_business_districthttp://en.wikipedia.org/wiki/Central_business_district


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3.3.4 PROFILE D: LARGE COMMERCIAL STORES

The establishments considered in this profile are retailer distribution centres, shopping centres, anddistribution warehouses, meaning, places exclusively dedicated to commercial activities. Thesecommercial parks have excellent road accesses, even though they are far away from the city centre. Inthese cases, it is understood that conditions are met to have good logistics accessibility, once thiscluster was specifically designed for this purpose, and the location was set out considering the logisticneeds. The figure below presents an example of a technological park located in Oeiras, Portugal.

They receive high amounts of goods; the frequencies of deliveries are high and have normally a definedroutine. These establishments have no restrictions applied to the deliveries, and are well equipped interms of logistic accessibility.

Table 9 Characteristics of Profile D

Commercial density High

Homogeneity Low

Logistic acessibility Good

Restriction applied No

Easiness of handling Easy/reasonable/Difficult

Special conditions Might have special needs

Urgency of deliveries Relevant

Frequency of deliveries Medium/High

Amounts to be delivered Many

Planned del iveri es Defined routine

Profile DCity Area Features



Source: http://www.lagoaspark.pt/

One common example in metropolitan areasare technological clusters or logistic parks,which are composed mainly of warehousesand/or offices and various support facilities

such as hotels, conference centres, healthclubs, food courts, etc
http://www.lagoaspark.pt/http://www.lagoaspark.pt/http://www.lagoaspark.pt/


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3.3.5 PROFILE E: RESIDENTIAL AREAS WITH LOCAL TRADE

This logistic profile concerns areas with low commercial densities, meaning, they are predominantlyresidential areas (for example residential buildings with commercial stores on the ground floor). Theseareas have residential buildings placed in old neighbourhoods that were not planned consideringlogistic needs. Therefore, these areas have restrictions towards the deliveries distribution, as they canaffect the level of congestion within these areas, and the logistic accessibility is already difficult dueto the geometry of the streets (lack of loading bays, narrow streets and so on).Also environmentalconcerns are associated with the circulation of freight vehicles in these areas, such as noise and airpollution.

This profile can also represent the neighbourhoods (which are termed here asanchor neighbourhoods ),that function as small townships: they are residential neighbourhoods, but they have a considerableconcentration of trade and services and can function autonomously.

Table 10 Characteristics of Profile E

Source: http://infohabitar.blogspot.com/2007/03/sobre-o-bairro-de-alvalade-de-faria-da.html

Commercial density Low/Medium

Homogeneity Low/Medium

Logistic acessibil ity Reasonable/Bad

Restriction applied Yes

Easiness of handling Easy/reasonable/Difficult

Special conditions Might have special needs

Urgency of deliveries Irrelevant/Relevant/Urgent

Frequency of deliveriesLow/Medium

Amounts to be delivered Few/Several/Many


Profile E

City Area Features



Alvalade , a neighbourhood located inLisbon, Portugal is an example of Profile E -residential area with commercialestablishments on the ground floor.
http://infohabitar.blogspot.com/2007/03/sobre-o-bairro-de-alvalade-de-faria-da.htmlhttp://infohabitar.blogspot.com/2007/03/sobre-o-bairro-de-alvalade-de-faria-da.htmlhttp://infohabitar.blogspot.com/2007/03/sobre-o-bairro-de-alvalade-de-faria-da.htmlhttp://infohabitar.blogspot.com/2007/03/sobre-o-bairro-de-alvalade-de-faria-da.html


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3.3.6 MAIN DIFFERENCES BETWEEN LOGISTIC PROFILES

The table below provides a cross-analysis between the logistic profiles in order to identify what themain characteristics are that distinguish them, considering the defined characteristics for the cityarea, products and type of deliveries. Thus, it is intended to further clarify the distinction of eachprofile, and ensure that each type of logistics profile is independent and represents a completelydifferent reality from the rest. Therefore, this table compares all the profiles two by two in asymmetric matrix, in order to identify the main differences between them. For example, the maindifferences between Profile A and Profile D are city area features, such as commercial homogeneityand logistics accessibility.

Most of the logistic profiles were defined according to the city area features, and so, these are themain characteristics that are relevant to the identification of the logistic profile. The only exception isProfile B, which is distinct due to the products characteristics, namely because it refers to perishable

(and therefore also fragile) products.


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Table 11 Comparison between logistic pro files characteristics

Profile A : cluster of shops specialized inone specific type of service/product: ex.a neighborhood that is known for

furniture stores, craft or art pieces.

Profile B : Hotels,restaurants, small grocerystores, neighborhood

markets

Profile C: Business center(courier, small deliveries,B2C)

Profile D: Large commercial (retail,shopping centers, distributionwarehouses)

Profile E : Residential areas with localtrade

Profile A : cluster of shopsspecialized in one specific typeof service/product: ex. aneighborhood that is known forfurniture stores, craft or artpieces.

Product Characteristics:Fragility, Perishability,Amounts to be delivered

City Area Features:Commercial homogeneity,Amounts to be delivered

City Area Features: Commercialhomogeneity, logistic accessibility

City Area Features: Commercialdensity and homogeneity

Profile B : Hotels, restaurants,small grocery stores,neighborhood markets

Product Characteristics:Fragility, Perishability,special conditionsDeliveries Profile: Amountsto be delivered

Product Characteristics: Fragility,Perishability, special conditionsDeliveries Profile: Amounts to bedelivered

Product Characteristics: Fragility,PerishabilityDeliveries Profile: Frequency ofdeliveries, timeliness of deliveries

Profile C: Business center(courier, small deliveries, B2C)

City Area Features: Logisticaccessibility; Restriction appliedDeliveries Profile: Amounts to bedelivered

City Area Features: CommercialdensityDeliveries Profile: Frequency ofdeliveries

Profile D: Large commercial

(retail, shopping centers,distribution warehouses)

City Area Features: Commercial

density, logistic accessibility;restriction appliedDeliveries Profile: Frequency ofdeliveries, timeliness of deliveries

Profile E : Residential areas withlocal trade


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3.4 COMPARISON OF CASE STUDIES LOGISTIC PROFILES

The definition and characterisation of the logistic profiles help to identify the relevant conditionings forthe organisation of the logistics distribution. Through the identification of the conditions that optimisethe logistics system, it is possible to outline the business models that best suit each logistic profile, whichcan have several forms.

Therefore, logistic characteristics are induced from the case studies in order to determine which logisticprofile fits into each case study analysed. Further in this report, the logistic profiles, together with the

main characteristics of the business models of each logistic measure analysed, will help to identify themeasures with the most transferability potential according to its main logistic profile features. The tablebelow presents the comparison between the logistic features of the following good practice examplestaken from Deliverables 3.1 to 3.9 (available at www.tublog.eu):

City of Paris (France):

o Chronopost Concorde;

o La Petite Reine;

o Monoprix Rail Project;Beijing Tobacco Logistics Centre (China);

Mumbai Case Study (India):

o Mumbai Dabbawalas

Joint delivery systems in Tokyo (Japan);

New York City Off-Hour Delivery Project (USA);

City of Utrecht (The Netherlands);City of Belo Horizonte (Brazil):

o Sale and delivery of organic products directly from the producer to the customer;

Truck Regulation and the Abertis Logistics Park in Santiago-Chile (Chile);

Regulations investigated, such as the environmental zone in Utrecht and the requirements of loadingand unloading places in Belo Horizonte werent considered because they cant be directly associated

with one type of product or service, as well as a homogeneous area and the city. For that purpose theMexico City Case Study alsowasnt considered in this analysis due to the fact that this case study
http://www.tublog.eu/http://www.tublog.eu/http://www.tublog.eu/http://www.tublog.eu/


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concerns a set of regulations such as the Vehicle Verification Programme, that are not directlyassociated with one type of product or service, as well as a homogeneous area and the city.


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Table 12 Logistic profiles identification and comparisonChronopost in Paris,

FranceMonoprix Rail Project,

Paris, FranceLa petite Reine in Paris,

FranceB ei ji ng , Ch in a M um ba i , In di a Toky o, Ja pa n N ew Yor k, US A

Utrecht , TheNetherlands

Belo Horizonte,Brasil

Commercial density High Not determined High High High High High Medium High

Homogeneity Low Not determined Low Low Low Low Low Low LowLogistic acessibility Reasonable Reasonable Reasonable Reasonable Bad Bad Reasonable Reasonable Reasonable

Measures consideringlogistic needs

Some specificmeasures

Some specific measures Some specific measuresSome specific

measuresSome specific





measures

Level of Congestion Reasonable Not determined Not determi ned Bad Bad Bad Bad Reasonable ReasonableRestriction applied Yes Not determined Not determined Yes Yes Yes Yes Yes Yes

Easiness of handling Easy Not determined Easy Easy Easy Easy Easy Reasonable Easy

WeightLight (>1 unit perperson to carry)

Not determinedLight (>1 unit per person

to carry)Light (>1 unit perperson to carry)

Light (>1 unit perperson to carry)

Light (>1 unitper person to

carry)

Small (>1 unit perperson to carry)

Medium (> 1 person tocarry one unit)


SizeSmall (>1 unit perperson to carry)

Not determinedSmall (>1 unit per person

to carry)Small (>1 unit perperson to carry)


Small (>1 unitper person to

carry)


Medium (> 1 person tocarry one unit)


Holding Conditions Easy Not determined Easy Easy Reasonable Easy Easy Reasonable Easy

S pec ia l c on di ti on s N o s pec ia l n eed s N o s pec ia l n eed s M ig ht ha ve sp ec ia l n eed s N o s pec ial need s S pec ia l n eed sNo special

needsNo special needs

Might have specialneeds

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 UrgentFrequency of deliveries High High High High High High High High HighAmounts 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 tr uck No t de te rmined Van/ small tr uck

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

ProductCharacteristics

City AreaFeatures


51/91

Mo

Date post:	02-Jun-2018
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Business Concepts and Models for Urban Logistics

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