Cargo Bikes as a potential solution forsustainable urban logistics: a case study inTirana
Faculty of Civil and Industrial EngineeringDepartment of Civil, Constructional and Environmental Engineering Master Degree in Transport Systems Engineering
CandidateGleardo Terziu - 1777838
SupervisorProf. Andrea Campagna
A.A. 2018-2019
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Contents Page
CONTENTS ............................................................................................................. I
FIGURE CONTENTS .......................................................................................... III
TABLE CONTENTS ............................................................................................ IV
1 INTRODUCTION ............................................................................... 1 1.1 Problem description ...................................................................................... 1
1.2 Research question .......................................................................................... 3 1.3 Statements and hypothesis ........................................................................... 3 1.4 Purpose of the thesis ..................................................................................... 4
1.5 Methodology .................................................................................................. 4
2 LITERATURE REVIEW ...................................................................... 6 2.1 Last Mile Logistics ......................................................................................... 6 2.2 Importance of delivery .................................................................................. 7 2.3 Usage of cargo bikes ...................................................................................... 9
3 METHODOLOGY ............................................................................. 13 3.1 Survey methodology ................................................................................... 13 3.1.1 Investigation of distribution flow ....................................................... 13 3.1.2 Survey technique .................................................................................. 14 3.1.3 Methodology of data analysis and elaboration ................................ 17 3.1.4 Survey methodology and software implementation ....................... 18 3.2 Ex-ante evaluation of the scenarios ........................................................... 21 3.2.1 Overview ................................................................................................ 21 3.2.2 Logistics Sustainability Index calculation ......................................... 22 3.2.3 Phase 1: Selection of the impact area ................................................. 23 3.2.4 Phase 2: Selection of criteria ................................................................ 23 3.2.5 Phase 3: Selection and computation of indicators............................ 24 3.2.6 Phase 4: Weighting process ................................................................ 25 3.2.7 Phase 5: Values normalization ............................................................ 28
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3.2.8 Phase 6: Logistics Sustainable Index .................................................. 29
4 IMPLEMENTATION TO THE CASE STUDY .............................. 30 4.1 Study area “Blloku” district of Tirana ...................................................... 30 4.2 Independent retail sector ............................................................................ 38 4.2.1 Establishments area .............................................................................. 40 4.2.2 Employees and vehicles ....................................................................... 41 4.2.3 Supply chains and deliveries .............................................................. 42 4.2.4 Transport & delivery operations ........................................................ 44 4.3 Brand retail sector ........................................................................................ 45 4.4 Freight Deliveries & Quantity .................................................................... 46
4.5 Supply chains selected for the project implementation ......................... 47
5 New supply chain design ................................................................ 49 5.1 Supply chain characteristics ....................................................................... 49 5.1.1 Depot layout .......................................................................................... 49 5.1.2 Vehicle selection .................................................................................... 54 5.2 Route generations ........................................................................................ 56 5.3 Cost-Benefit Analysis .................................................................................. 61 5.3.1 Project financial costs ........................................................................... 62 5.3.2 Project financial benefits ...................................................................... 68
5.3.3 Break Even Point analysis ................................................................... 69
6 BEFORE’ AND ‘AFTER’ SCENARIOS COMPARISON ............. 70 6.1 ‘Before’ and ‘After’ scenarios assessment ................................................ 70 6.2 Logistic Sustainable Index calculation ...................................................... 71
6.3 LSI Results .................................................................................................... 81
7 FINAL CONCLUSIONS .................................................................. 84 7.1 Conclusions .................................................................................................. 84
7.2 Further researches........................................................................................ 87
8 REFERENCES .................................................................................... 88
III
Figure contents Page
1 Methodology division ................................................................................................. 5 2 Copenhagen Illum Department Store ....................................................................... 9 3 A typical carrier of 1910 (Bergrijer Brother, Amsterdam) ................................... 10 4 Long-John, Denmark 1920 ........................................................................................ 10 5 Usage of cargo bikes in Europe (Lenz & Riehle, 2013) ........................................ 12 6 Logical process of the questionnaire ....................................................................... 18 7 Detail of the “Supplies” process of the questionnaire .......................................... 20 8 LSI evaluation process .............................................................................................. 22 9 Tirana Road Map (Urban planning project JCIA Studio Team) ........................ 31 10 Cargo-Bikes used for city cleaning service in Tirana (EcoVolis) ....................... 32 11 New dedicated lane for bikes in Tirana (Tirana Municipality) .......................... 33 12 New urban buses 100% electrical (Tirana Municipality) .................................... 33 13 Depot location ............................................................................................................ 50 14 Depot layout ............................................................................................................... 51 15 VELOVE, electric cargo bike (case used by DHL) ............................................... 55 16 Example of electric Cargo Bike operations ............................................................ 58 17 Example of courier walking operations.................................................................. 59 18 Example of electric Cargo Bike route per tour ...................................................... 59 19 Example of courier walking route per tour ........................................................... 60 20 Cost benefit analysis .................................................................................................. 61 21 Linear depreciation of e-Cargo Bikes ...................................................................... 64 22 Break Even Point graph ........................................................................................... 69 22 ‘Before’ Scenario representation .............................................................................. 70 23 ‘After’ Scenario representation ............................................................................... 71 24 Impact areas performance ........................................................................................ 81
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Table contents Page
1 Number of criteria and indicators per impact area ............................................... 24 2 LSI Indicators categories ........................................................................................... 25 3 Random Consistency Index (RI) ............................................................................. 28 4 Traffic counts in the study area (Tirana Open Data) ........................................... 34 5 Traffic flow during last three years ......................................................................... 35 6 Time-Window Traffic Limited Zone (Municipality of Tirana) ........................... 36 7 Population of Retail chains and brand sector ........................................................ 37 8 Population of Independent Retail Sector ................................................................ 37 9 Establishment characteristics of the study case ..................................................... 39 10 Average size of the Establishments & Depo in ‘Blloku’ district .......................... 40 11 Employee number per category ............................................................................... 41 12 Supply chains identified in the study area ............................................................. 44 13 Number of deliveries per year for brand retail sector .......................................... 46 14 Summary of actual scenario ...................................................................................... 47 15 Urban supply chains suitable for the UCC ............................................................. 48 16 Freight volume demand ............................................................................................ 50 17 Handler working time-table ..................................................................................... 53 18 Cost indicators of the proposed project .................................................................. 62 19 Depot installation costs ............................................................................................. 65 20 Re-charging costs ........................................................................................................ 67 21 Aggregated annual cost of the project .................................................................... 67 22 Project financial benefits ............................................................................................ 68 23 Before and After scenarios summary ...................................................................... 71 24 Logistics sustainability index indicators ................................................................. 72 25 Values of the LSI indicators in ‘Before’ scenario ................................................... 75 26 Values of the LSI indicators in ‘After’ scenario...................................................... 76 27 Air emission indicators .............................................................................................. 78 28 Annoyed level of the population for noise pollution ............................................ 79 29 Performance of the impact areas in the ‘Before’ scenario ..................................... 80 30 Performance of the impact areas in the ‘After’ scenario ....................................... 81
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1. INTRODUCTION
Urban freight distribution is considered the least efficient and the most difficult,
expensive and polluting part of the supply chain. The urban freight distribution is
often hampered due to limited traffic zones, narrow streets and lack of parking slots.
Among the economic costs the externalities caused by commercial vehicle are very
dangerous. Tirana is one of the most polluted cities in Europe and the main cause is the
road traffic externalities.
New sustainable solutions must be developed to reduce the negative effects of this
activities to the environment, life quality and economy. A successful new mode that is
tested lastly in Europe, is the urban freight distribution using electric cargo bikes.
Based on the pilot projects conducted in different cities in Europe an estimation of 51%
of all goods, delivered in the cities can be switched from traditional fueled vehicles to
e-cargo bikes.
1.1 Problem description
The increase of the urbanization and the technological evolution (e-commerce) is
increasing the challenges of urban freight distribution. People want every day more
goods to be delivered and picked up in their places. The open market competition makes
clients raise their requests to speed and time windowed. On the other hand, the logistical companies aren’t updating as fast as the increase
demand and its new requests. Traditional ‘fueled track’ remain the dominant transport
mode.
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The actual demand with its updated requests and the lack of real updates on the urban
distribution by the logistic companies is leading to a ‘Lose – Lose’ scenario for both the
companies and the population.
Usage of the traditional supply chain has negative effects on urban-life quality
⋅ noise pollution
⋅ air pollution (CO2, NOX)
⋅ traffic congestion
⋅ illegal and dangerous parking
In the other hand we have the effects urbanization and the urban policies that the
municipalities are developing to improve the life quality such as:
⋅ narrow urban streets
⋅ traffic congestion
⋅ lack of parking
⋅ limited/restricted traffic zones
These effects are making last mile logistics the most expensive and fatigues part of all
supply chain.
Logistic companies are trying to take measures in their supply chain in order to:
⋅ adapt new urban policies
⋅ reduce cost
⋅ fulfill the demand
Mostly the way out is founded in the renewal of the fleet with electrical tracks but
again their size is a lack that doesn’t:
⋅ enter limited/restricted traffic zones
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⋅ find parking
⋅ adapt with narrow streets
In some avantgarde cities, we have some examples of the usage of ‘Cargo-Bikes’ for
last mile logistics. The lack of studies is an important reason that prevents the wider
usage of these vehicles.
1.2 Research question
To investigate and structure the studied situation a research question followed by a set
of hypotheses has been developed. The focus of the thesis is:
⋅ Productivity
⋅ Level of service
⋅ Environmental impact
The research question is formulated as follows:
Is Cargo-Bike a potential solution to make urban freight more sustainable?
1.3 Statements and hypothesis
Statement 1: Cargo bikes can take shorter routes and avoid traffic congestion and have
the potential to increase the LOS in terms of on-time deliveries.
Hypothesis 1: Cargo bikes increase productivity and LOS
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Statement 2: Cargo bikes do not emit CO2 and they reduce traffic congestion so
decrease the CO2 emission of other vehicles
Hypothesis 2: Cargo bikes reduce CO2 emission
Statement 3: Cargo bikes are cheaper to be purchased and to be maintained. Their
charging costs are much lower than vans fuel and they perform shorter routes.
Hypothesis 3: Cargo bikes reduce delivery costs
1.4 Purpose of the thesis
The goal of this thesis is to analyze whether a new model of urban distribution that
includes Electrical Cargo Bikes is efficient in freight urban distribution. This research
will be based on similar experiences and projects in different European cities. The
study will be focused on freight distribution in one of the densest populated zones of
the Tirana, Blloku district. The efficiency is evaluated in terms of productivity, LOS,
environmental impact and economical costs. In additional, this research will highlight
the factors that influence in the understanding the challenges and benefits related to
the implementation of this new distribution model in the urban areas. The results of
this thesis will determine whether proposing this new model is efficient or not.
1.5 Methodology
The methodology of this work is divided in three main parts. The first step of was the
reveal of the current situation in the study area. The data collection is based on a deep
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investigation of the study area, by developing a survey tool for understanding freight
behaviors and impacts in Functional Urban Areas. The methodology of this survey is
based on similar methodologies used for sustainable urban logistics planning and
freight transport project but is adapted to cover exactly the needs of this thesis.
The second part is the formulation of the new supply chain that will be served with
electrical cargo bikes. This part will include the selection of the depot location, vehicle
selection, logistic operations, simulation of the network and the calculation of the
number of vehicles needed. Also, in this part a business model analysis is included to
evaluate whether the project implementation is worthy or not.
The last part of the thesis includes an ex-ante evaluation. ‘Before’ and ‘After’ scenarios
will be compared based on Logistics Sustainable Index.
Figure 1. Methodology division
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2. LITERATURE REVIEW
In this chapter is aimed to identify the key literature on this field. There are many
similar cases over the world that concern in the implementation of e-cargo bike in
urban freight deliveries. The experience on the priviest cases states the importance of
the implementation of these vehicles in urban logistics. There are no studies that has
evaluate this mode in the Albanian market.
2.1 Last Mile Logistics
Last mile logistic distribution system is the final step of the supply chain which needs
carefully investigation in order to efficiently and economically deliver goods to
customers. The Last Mile in the supply chain is considered as the last part of the
supply chain for the direct-to-consumer market. In supply chain logistic operations.
Last Mile refers to the last part of physical goods delivery process which involves a set
of activities that are necessary for the delivery process from the last transit point to the
final drop point of the delivery chain. The Last Mile is critical because it is responsible
for the final delivery of products to customers and is typically a source of high amount
of costs of delivery chains. (Aized & Srai, 2014)
City logistics is the term used to denote the specific logistic concepts and practices
involved in deliveries in congested urban areas, the ‘‘last mile’’ transport, with specific
problems such as delays caused by congestion, lack of parking spaces, close interaction
with other road users, etc. (Munuzuri, Larraneta, Onieva, & Cortés, 2005)
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The process for totally optimizing the logistics and transport activities by private
companies in areas while considering the traffic environment, the traffic congestion
and energy consumption within the framework of a market economy. Moreover, city
logistics is based on general knowledge about issues including distribution costs, and
social and environmental costs. The goal of city logistics is to reduce both and make the
whole system more effective. (Taniguchi, Thomson, Yamadi & Van Duin 2001)
The last mile is considered the more expensive, least efficient and most polluting part
of the entire supply chain (Gevaers, 2011) Factors that affect these high proportions are
due to inefficiencies, such as traffic (e.g. traffic jams, heavy congestion), and time spent
on handling of goods at multiple locations. The last mile often hinders city logistics
and supply chains in high-populated areas. For example, due to regulated traffic speed
and intensity (e.g. rush hour, low emission zones, etc.), limited parking and unloading
space (Aized & Srai, 2014).
The actual supply chain has negative effects on urban-life quality as noise pollution, air
pollution (CO2, NOX), traffic congestion and illegal and dangerous parking in the other
hand we have the effects urbanization and the urban policies that the municipalities
are developing to improve the life quality such as narrow urban streets, traffic
congestion, lack of parking and limited or restricted traffic zones. These effects are
making last mile logistics the most expensive and fatigues part of all supply chain.
2.2 Importance of delivery
Delivery can be considered the most delicate phase of the supply chain. The client’s
evaluation is highly based on the delivery service. During time a lot of measures to
improve this phase are been taken but the clients has become more and more difficult to
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be satisfied and the companies are obligated to satisfy them as service is the key
competitor for the companies trading the same product. Varying delivery options and
its perceived quality are highly sensitive criteria for the clients. Based on their request
we can identify four types of clients:
⋅ Clients who seek for the cheapest delivery method
⋅ Clients who seek for Same-Day-Delivery
⋅ Clients who seek for Time-Window-Delivery
⋅ Clients who seek for Instant-Delivery
Even if the increasement on Same-Day-Delivery, Time-Window-Delivery or Instant-
Delivery studies has notice the client’s choice based on cheapest delivery keeps the
majority with 50%.
Delivery success is based in three main factors: cost, efficiency and transparency.
⋅ Cost: Last mile logistics cost are considered to be up to 30% of the total
delivery cost and some time they may be exceeded.
⋅ Efficiency: To be efficient is important to satisfy the clients need for fast
and economic delivery. The increase the efficiency a good management of
the supply chain is needed and the key phase in las mile logistics.
⋅ Transparency: The clients wants to track their product so for this reason
the companies generate tracking code in order to check delivery status.
Nowadays the tracking code is not enough, and the clients want to follow their order in
real-time. The clients want information for the driver’s location and time window with
at least four hours in order to wait in their zone.
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2.3 Usage of cargo bikes
The first usage of cargo bikes is known as 1877 in England. James Starely was the first
that build a three-carrier design for transportation of people or goods. The first
documented usage was for the purpose of urban postal delivery. In 1920 in Denmark
cargo bikes were the main transport mode used for Copenhagen Post and Telegraph
Service messengers, with two wheeled bicycles and three wheeled tricycles (Klepfer,
2012). This mode was also used by several companies in the country, such as the Illum
Department Store and the Byposten messenger company, to manage business logistics
(Colville-Andersen, 2012).
Figure 2: Copenhagen Illum Department Store
Cargo bikes were comprised of both commercially manufactured models and self-
adapted vehicles (Decker, 2012). The most popular model in Holland and Scandinavia
was the “Bakfeitsen” (box bike) which was a modified design of a cargo trike (Klepfer,
2012).
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Figure 3: A typical carrier of 1910 (Bergrijer Brother, Amsterdam)
The Long-John which first appeared in Denmark in the late 1920s was considered the
most practical cargo bike for speedy deliveries with heavy/bulky goods. It is equipped
with a steering mechanism comprised of a tie-rod passing under the platform (Decker,
2012).
Figure 4: Long-John, Denmark 1920
The “bakery bikes” or “butcher bikes”, famous in the UK in the 1930s, were another
form of cargo bike with front-fixed boxes or baskets used for the delivery of goods
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such as bread, meat, vegetables, fruit, and dairy products. In the United States the first
cargo cycles were manufactured in 1898 by a company called “Workman Cycles” and
were used by the post office for warehouse work as well as by the Good Humor Ice
Cream Company for vending purposes. From 1939 to 1967, “Cycle Trucks” became the
most popular in the U.S. whereby 10,000 units were sold during World War II (Klepfer,
2012).
Starting from the mid-twentieth century there was a market decline in the use of
bicycles for urban deliveries of goods, due to factors as: greater availability of cars and
vans, comparatively lower operating costs per unit carried of cars and vans, and the
growing suburbanization of urban areas (Leonardi, Browne, & Allen, 2012). Different
with the present, the focus was on speed, environmental issues were less of a problem
at that time (Maes & Vanelslander, 2012).
Cargo Bike, as known today, can be a two or three or four-wheeled vehicle that is
operated entirely by human power or with an electric assist (e-Cargo Bike) (Kamga &
Conway, 2013). It is a zero-emission alternative to light freight vehicles, which are
commonly powered by diesel engines (Saenz, Figliozzi, & Faulin, 2016). E-cargo bikes
can carry loads of varying weight and volume. In additional cargo bikes with electrical
motor increase load capacity, speed and range. Electric cargo bikes can carry loads up
to 250 kg, which increase their potential to manage a list of tasks. The load and volume
characteristics depend on the type of cargo bike and distribution area characteristics.
These characteristics of e-cargo bikes show that they can afford the increasing demand
for point-to-point express deliveries in the urban areas (Lenz & Riehle, 2013).
The results of previous studies were found that the implementation of cargo bikes as a
new freight transportation mode is a viable option for urban freight transport (Schliwa,
2015). However, we are facing with a lack of researches for the usage of cargo bikes in
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the city freight distribution (Decker, 2012; Gruber, Kihm, & Lenz, 2014; Lenz & Riehle,
2013). The study Lenz & Riehle on 2013 analyzed the experiences of 38 service
providers in Europe that had implemented bikes for urban freight deliveries. Their
research identified Western and Central Europe as the core areas of cycle freight. Most
studies are limited to the European context as cargo bikes are more convenient to the
narrow streets of old towns than to boulevards (Saenz et, 2016).
Figure 5: Usage of cargo bikes in Europe (Lenz & Riehle, 2013)
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3. METHODOLOGY
3.1 Survey methodology
The data collection of this thesis is based on a deep investigation of the study area, by
developing a survey tool for understanding freight behaviors and impacts in
Functional Urban Areas. The survey is made with the implementation of a complex
questionnaire with the help of technological software. The methodology of this survey
is based on similar methodologies used for sustainable urban logistics planning and
freight transport project but is adapted to cover exactly the needs of this thesis.
3.1.1 Investigation of distribution flow
The investigation of the distribution flow starts with the understanding the supply
chain approach. SCs are defined depending on the ‘Operating formal procedure for
the service and management of goods. the procedure changes not only on the basis of
the type of the freight but also on the structure of their distribution method. It is
different for retail chain and brands sector and independent retail sector.
A deep survey is needed to reveal the distribution flow. This survey includes several
steps. The first steps start with a census of the activities on the study area that
represent the sources of demand for urban freight in that specific area of the city. Based
on the complexity of the retail sector a special and different treatment is needed to
understand better. Two different survey methods are needed for retail chain and
brands sector and independent retail sector.
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The method consists on the following steps:
⋅ Sampling
⋅ Web-based establishment and commodity flow survey
⋅ Database collection
⋅ Analysis and statistical inference process.
Since the retail chain and brands sector control their distribution, the methodology
needs to define a list of firms that own their outlets in the study area and to record data
about their supply chain structure.
The first step to reveal the supply chain in a specific urban area consist in a census of
the ‘Freight Demand Generators’ that are located on the study area. This survey can be
limited to retail activities or can be extended to every activity on the area that order,
receive or ship freights. The big retail groups have own control on the distribution of
the goods on their establishments on the other hand the small independent retailers
often don’t control deliveries, they let every responsibility on the hand of the
wholesalers or suppliers that are using their own account or third-party carriers. Often,
they even do not pay for the transport directly and the only contact that they have with
the carrier is the sign of the freight documents. The supplying process and the
‘operating formal procedure for the service and management of goods’ used by retail
groups are different from those used in the independent retail sector.
3.1.2 Survey technique
Survey of independent Retail Sector The method to identify and characterize the supply chains of the independent retail
sector involves an establishment and commodity flow survey conducted on a
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statistically significant sample size of shopkeepers located the assigned urban area. The
survey includes different questions about the supplying process of each type of good
traded by them.
Based on this methodology, every supplying process represents an ‘observation unit’
and every participant represents a ‘reporting unit’.
For each type of good supplied, the following topics have to be collected:
1. type of suppliers (manufacturers, wholesalers, etc.)
2. type of agreement for delivery/collection from supplier
3. who organizes delivery/collection of goods
4. who resolves delivery/collection problems
5. type of delivery/collection operator (own account, logistics company, carrier, express
courier, etc.)
6. vehicle types/sizes
7. no. of deliveries/collections
8. size/type of delivery/collection
9. type of delivery packaging used
10. quantity of goods delivered/collected
11. frequency of delivery/collection of goods
12. time of day
13. variation by day of week
14. variation during year
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15. who sets delivery/collection time
16. time taken to carry out deliveries
17. whether staff from establishment need to be present
18. whether signature is required
19. whether goods have to be checked by receiver
In addition, participants have to be asked also to provide a series of information about
their establishments located in the specific urban area. Specifically:
20. type of establishment
21. size of establishment
22. employees at establishment
23. size of warehousing space at establishment
24. other warehousing space out of establishment
25. no. of deliveries/collections (considering all types of goods as a whole)
26. delivery/collection frequency (considering all types of goods as a whole)
27. size/type of delivery/collection (considering all types of goods as a whole)
28. time of day
29. variation by day of week
30. variation during year
31. whether vehicles based at establishment
32. vehicle types/sizes
33. deliveries/home deliveries made by vehicles at the establishment
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Data collected on topics from 20 to 33 improve the knowledge of the urban economic
composition. In this additional survey, observation units and reporting units coincide.
The survey does not address the activities performed on the retailer side during the
delivery of goods.
Survey of retail chains and brand sector
Taking into consideration that chains and brand sector control their own distribution
channel and processes the methodology of the survey is involving directly their head
offices. They are asked to provide data related to the deliveries to their establishments
located in the study area.
It consists of a survey used to gather data about:
1. Distribution organizational structure
2. Type of delivery operator (own account, logistics company, carrier, express courier, etc.)
3. Goods flows to establishments in the urban area
4. Trip details and patterns of goods vehicles in the urban area
5. Loading/unloading activities of goods vehicles in the urban area
6. Movement of goods between vehicles and establishments in the urban area.
3.1.3 Methodology of data analysis and elaboration
The data collected allow to have conclusions about the population in terms of statistical
inference process. The main scope of the survey for the independent retail sector is to
reveal the characteristics of the supply chain of each type of goods delivered in the
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assigned urban area. In this survey shopkeepers are ‘reporting units’ and the data to be
collected (deliveries, type of suppliers, etc.) are “observation units”. This is set by
taking into consideration that a significant sample of shopkeeper can be determined
given the number of the shops on the area. On the other hand, the universe of the
suppling channels for each type of freight is unknown. As a result, this method can’t
provide a statistically significant quantitative result for the supply chains, only a
qualitative characterization is possible to be provided.
3.1.4 Survey methodology and software implementation
The methodology of this survey is based on a similar methodology used for
sustainable urban logistics planning and freight transport project but is adapted to
cover exactly the needs of this thesis. The first step of this survey starts with a census of
the retail activities located in a specific urban area. The second step is consisting with a
questionnaire for the characteristics of the establishment type of goods traded by them
and the supply chain of each type of good. The questionnaire is divided into four main
categories:
Figure 6. Logical process of the questionnaire
ESTABLISHMENT DATA(warehousing, employees, vehicles)
SUPPLIES
HOME DELIVERY TO FINAL CUSTOMERS
PROBLEMS & SUGGESTIONS
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• ‘ESTABLISHMENT DATA’ includes all the characteristics of the local
establishment and of the other establishments the shop-owners may have in the
surroundings on in other area, number of employees and of the vehicles used for
deliveries.
• ‘SUPPLIES’ concern the most complex section of the questionnaire, since goods
can be supplied in different modalities to the same shop, and the same supplying
process may happen in different phases.
• ‘HOME DELIVERY TO FINAL CUSTOMERS’ regards deliveries to final
customers (at home) from the shops in the area.
• ‘PROBLEMS & SUGGESTIONS’ includes open questions and is oriented to
acquire free answers.
The most important part of the survey is the part of Supplies since it collects data for
different supply chains and allows to understand the difference between supply chains
of different goods. In the table below is illustrated in details the structure of the
questionnaire (see Figure 7)
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Figure 7. Detail of the “Supplies” process of the questionnaire
The first step of the survey, the identifications of the establishments on the study area
was conducted with the usage of Google Map software and Street View option. On the
parts of the zone that street views are not available a site inspection was conducted.
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The complexity of the data that this survey cover needs the implementation of the
software-s to collect and elaborate data. Google Forms software that is part of Google's
online apps suite of tools, was used to conduct the survey. This software has the ability
to save data directly to a spreadsheet and later on to analyze them. The questionnaire
was created on the online format in Albanian language.
The questionnaires were delivered in two way:
• by email to the establishments that are adapted with the usage of the
technology
• by face-to-face interviews with the help of IPAD-s Tablets to record obtained
data in real-time.
In the face-to-face interviews the questionnaire was made with the help of two site
assistants, civil engineer students from Polytechnic University of Tirana, that were
trained to conduct this survey.
3.2 Ex-ante evaluation of the scenarios
3.2.1 Overview
This section explains the Logistics Sustainability Index (LSI), a Multi Criteria Decision
Analysis that is used to combine normalized values of indicators into a unique index.
This index can assess the city logistics measures impacts over an impact area and
combine different indexes to assess the overall convenience of a measure.
Multi-Criteria Decision Analysis (MCDA) tool provide directions considering all
relative aspects and areas being affected by the implemented measure in city logistics.
The evaluations that follow the concept of multi-stakeholder multi-criteria
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assessment methodologies bring to the estimation of the Logistics Sustainability Index,
that is the values from the respective basic indicators will be combined into
composite indicators and will make possible to calculate LSI.
Logistics Sustainability Index is very useful to compare the current scenario with a
potential after scenario. In the following paragraphs the method to calculate the LSI
is explained in detail.
3.2.2 Logistics Sustainability Index calculation
Logistics Sustainability Index has set of parameters, available for selection by each
stakeholder category, including impact areas, criteria and indicators. According to the
selected parameters, the evaluation process can produce multi-criteria results, also
separately processed results. The evaluation process is composed of six steps reported
in the figure 8.
Figure 8. LSI evaluation process
Step 1: Selection of the impact area
Step 2: Selection of criteria
Step 3: Selection and computation of indicators
Step 4: Weighting process
Step 5: Values normalization
Step 6: Logistics Sustainability Index
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3.2.3 Phase 1: Selection of the impact area
Over the seven impact areas at least one of them based on primary and secondary
objectives and perform the assessment of the measures. Impact areas are:
⋅ Economy and energy
⋅ Environment
⋅ Transport and mobility
⋅ Society
⋅ Policy and measure maturity
⋅ Social acceptance
⋅ User uptake
3.2.4 Phase 2: Selection of criteria
For every impact area, there are several criteria. The criteria for the different impact
area are the following:
⋅ Economy and energy:
energy, development, benefits, costs, economic and financial risk
⋅ Environment:
air quality, GHG emissions, noise pollution
⋅ Transport and mobility:
level of service, safety and security, transport system, UFT
vehicles, IT infrastructure and technology
⋅ Society:
greening, convenience, living standards, socio-political
dimensions, natural disaster and civil disturbances
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⋅ Policy and measure maturity:
awareness, managerial, background
⋅ Social acceptance:
social approval, regulations acceptance
⋅ User uptake:
flexibility, knowledge and experience transfer, consensus,
success
Impact areas Criteria Indicators
Economy and energy 5 36
Environment 3 10
Transport and mobility 5 29
Society 3 20
Policy and measure
maturity
3 24
Social acceptance 2 9
User uptake 5 9
Total 26 137
Table 1. Number of criteria and indicators per impact area
3.2.5 Phase 3: Selection and computation of indicators
In order to evaluate the performance of a measure, a series of indicators that are
relevant with the lifecycle stages of the measure can be selected. The indicators can be
divided in three main categories:
25
Indicator Impact areas Criteria
Impact Assessment Indicators (IAM)
Environment
Air quality
Greenhouse Gas
Emission
Noise
Level of Service
Transport &Mobility
Safety & Security
Transport System
UFT Vehicles
Social Cost Benefit Indicators (SCBI) Economy and Energy
Energy
Development
Benefits
Costs
Transferability and Adaptability
Indicators (TAM)
Policy & Measure
maturity
Background
Social approval
Social acceptance
Flexibility
Adaptability
Consensus
User uptake Transferability
Success
Table 2. LSI Indicators categories
3.2.6 Phase 4: Weighting process
Weighting process is the step where two or more elements are compared. The main
standard principle of weighting is: Higher the weight, higher the importance of the
element is. According to the literature five methods are mostly used based on
simplicity and effectiveness:
26
⋅ Analytical Hierarchy Process (AHP) method
⋅ Pairwise Comparison method
⋅ Delphi method
⋅ Ratio method
⋅ Rank Order Centroid method
In this project Analytical Hierarchy Process (AHP) method is used as it is considered
the most-widely used method for multi-criteria analysis in the transportation and
urban logistics field. The main strengths of this method are:
⋅ usable in a very wide spectrum of fields
⋅ easy to be understood
⋅ flexibility and easiness of use
⋅ interdependence of the different criteria
⋅ usable for both monetary and non-monetary scales
The user is called to state the importance (or preference) of element 1 compared to
element 2 by rating it according to a scale from 1 to 9, where:
⋅ 1 = same
⋅ 3 = moderately
⋅ 5 = very
⋅ 7 = much more
⋅ 9 = exceptionally more
27
All the intermediate integer ratings are possible. When element 1 is less important than 2,
then the respective reciprocal value is attributed (e.g. 1/5).
The A matrix (n x n), called “comparison” or “reciprocal matrix”, is filled in by the user,
where n is the number of the compared elements. The cells under the unitary diagonal
cells are filled in with the user’s rating input values, while the others below are equal to
the reciprocal value of the input value.
An example is the following matrix A (3x3)
A =
1 a12 a13
a21 1 a23
a31 a32 1
Where for instance :
The required weight Wi of the element in row i, is calculated using the following
equation 1.
Equation 1.
The consistency of the weight is estimated through the consistency index (CI) using
equation 2. and the consistency ratio (CR) using equation 3.
Equation 2. Equation 3.
28
The Random Consistency Index (RI) depends on the number of elements n to be
compared, as reported in the Table 3, below.
n 1 2 3 4 5 6 7 8 9 10
RI 0 0 0.58 0.9 1.12 1.24 1.32 1.41 1.45 1.49
Table 3. Random Consistency Index (RI)
Normally, a CR of up to 10% is considered a good consistency. But also, higher values
(e.g. up to 30%) may be acceptable.
The first step is to weight impact areas with each other and then the criteria are weighted
within the respective impact area. All the weights of the elements belonging to the
same component (Impact Area or Criterion), after the aggregation should sum up to
one.
3.2.7 Phase 5: Values normalization The use of indicators of different nature, context and value in a common assessment
methodology, requires the establishment of a commensurate scale, that can make
indicator values dimensionless. This can be achieved by means of the normalization of
values of each criteria and indicator into the set of dimensionless real numbers.
Data normalization consists of the rescaling of the values of the data into a single
specified range, such as from 0 to 1 or from 0 to 100.
There are several normalization methods available in literature:
⋅ normalization by comparison with the best alternative
⋅ classic normalization
⋅ max and min normalization
⋅ vector normalization
⋅ statistical z score
29
In this project, the normalization by comparison with the best alternative is used. This method
consists in: all the indicators values are divided (inside the same criterion) by the maximum
value.
3.2.8 Phase 6: Logistics Sustainable Index
The last step of the LSI procedure consists in data interpretation and calculation. In this
step the complexity of e decision making process is in the difficulty of considering all
the areas and the aspects that are affected by the measure (i.e. economy and energy,
transport and mobility, social acceptance) and the multiple stakeholders that
participate in the process.
When there is a problem with multiple alternatives and only one choice criterion, the
decision maker is required to determine the best alternative by comparing every
alternative based on the value of the criterion. There are many techniques able to solve
this kind of problems, as:
⋅ Bayesian decision making
⋅ Entropy technique
⋅ Expected value method
⋅ Goals achievement method
⋅ Utility function-based methods
⋅ Multi attribute utility theory (MAUT)
⋅ Simple Multi Attribute Rated Technique (SMART)
⋅ Analytical hierarchy process (AHP)
⋅ Weighted Sum model (WSM)
⋅ Weighted Product model (WPM)
⋅ Outranking methods (ELECTRE, PROMETHEE I and II, REGIME
analysis)
30
Weighted Sum Model (WSM) is the method used in this project. WSM is the earliest
and most common used method. The main characteristic of this model is the additive
utility assumption. This method can be used in problems with different alternatives and
one indicator, with the condition that the units of each indicator are same for all
alternatives.
The utility Vi for every alternative is calculate by the equation 4.
Vi = ∑ 𝑊𝑊𝑛𝑛𝑗𝑗=1 Rj rij
Equation 4.
rij is the normalized value of indicator j for alternative i.
Weighted Sum Model is used to aggregate normalized values of indicators into a unique
index that is able to assess the city logistics measures impacts over a given impact area
and eventually to combine all these indexes into a unique LSI. This procedure is done by
assessing the overall convenience of measure implementation.
4. IMPLEMENTATION TO THE CASE STUDY
4.1 Study area “Blloku” district of Tirana
The method is applied in a central zone of the city center of Tirana, Blloku (see Figure
9). Ish-Blloku (the former Block) known as Blloku is the most famous and attractive
area in Tirana. It became very attractive after the fall of communism in Albania
31
because during communism it used to be the area where only the communist elites
lived. This zone is very famous and attractive for tourists and local mostly for two
purposes shopping and clubs. Also, it is the most important business zone of Tirana.
Figure 9. Tirana Road Map (Project for Tirana urban planning JCIA Studio Team)
Air pollution is one of the biggest problems of Tirana municipality. According to the
data monitored and recorded by Mobile Air Quality Monitoring Station of Tirana
Municipality, the main problem is with PM10 and NO2 indicators that are caused
mainly by road traffic and vehicle emission. These two indicators are over the annual
rate standards of the European Union. The PM10 indicator the average measured
annual rate is 59.38 µg/m³ from 40 µg/m³ that is the annual rate of the European
32
Union which means an overpass of the European standards with 48.45%. The highest
monitored value during the day is 125.59 µg/m³. (measures of 2018, Tirana.opendata)
According the monitoring center the values of the pollution are higher during the
week-day while in the week-end these values are significantly lower, having a lower
number of vehicles traveling. Having this high air pollution, the municipality tend to
the reduction of the traffic flows and stimulates the use of alternative transport modes.
The municipality has started to build 10 km of dedicated lanes for bicycles furthermore
is promoting and financing every eco-friendly project as Bike-Sharing, Electrical
Vehicles or Cargo Bikes.
Figure 10. Cargo-Bikes used for Urban cleaning service in Tirana (EcoVolis Project)
33
Figure 11. New dedicated lane for bikes in Tirana (Tirana Municipality)
Figure 12. New urban buses 100% electrical (Tirana Municipality)
According to the traffic counts of Tirana municipality published on opendata.tirana.al,
our study area has a high traffic flow which in 2018 was 18,700 vehicles per year. The
traffic flow is increased with 6% from 2016 to 2017 and with 3% from 2017 to 2018.
Based on this increasing ratio during last three years we can assume that the traffic
flow of 2019 will increase again with 3% and will be 19200 vehicles/day.
34
Since we don’t have an exact number of commercial vehicles serving the zone is
assumed to be 10% of total traffic flow, based on literature who quotes the number of
commercial vehicles between 4% – 10%. The reason that the maximum 10% was
assumed is because the urban policy of the municipality that don’t allow the
commercial vehicles with payload capacity over 3.5 tons to enter in the study area from
06:00 until 20:00 which cause the supply chain to be served only with van up to 3.5 tons
payload capacity.
Period Vehicles/Day Commercial Vehicles/Day
Trimestral traffic counts
I. Trimester 2018 18250 1825
II. Trimester 2018 18850 1885
III. Trimester 2018 18500 1850
IV. Trimester 2018 19100 1910
Period Vehicles/Day Commercial Vehicles/Day
Annual traffic counts
2016 17100 1710
2017 18150 1815
2018 18700 1870
2019 19200 1920
Table 4. Traffic counts in the study area (Tirana Open Data)
35
Figure 5. Traffic flow during last three years
The zone characteristics as a central and attractive zone of Tirana with a high demand
generation of people and goods, with air pollution and with a big number of residents
it is exposed to the urban policies of the municipality. Different development plans
propose to have a limited traffic zone even fully pedestrian zone in this district.
According a study conducted by the Ministry of Education, Sports and Youth of
Albania every student in Tirana loses 5 minutes of the first lesson hour because of the
traffic. Having a number of almost 100,000 students they lose 8,333 hours of lesson per
week and almost 300,000 lesson hours per year.
The municipality has approved a Time-Window Limited Traffic Zone for commercial
vehicles. This urban policy is affecting also our study area, as it is located inside the
median ring of the city. In the district no commercial vehicle can enter from 06:00 to
09:00 and from 16:00 to 20:00. Moreover, commercial vehicles having over 18 tons
payload capacity con not enter this zone starting from 06:00 until 20:00.
17100
1815018700 19200
16000
17000
18000
19000
20000
2016 2017 2018 2019
TRAFFIC FLOW
36
Time Window Restricted vehicles Restricted zone
06:00 - 09:00 All commercial vehicles Grand ring of the city
16:00 - 20:00
06:00 - 20:00
All commercial vehicles
having over 3.5 tons payload
capacity
Median ring of the city, in its interior
network, including streets Sulejman
Delvina, Abdyl Frashëri, Ismail Qemali,
Elbasanit and Blvd. Bajram Curri
06:00 - 20:00
All commercial vehicles
having over 18 tons payload
capacity
Inside grand ring of the city including the
main entry links of the city
Table 6. Time-Window Traffic Limited Zone (Municipality of Tirana)
The purpose of this that introduce the potential of the usage of e-Cargo Bikes is to find
a solution in case that the municipality will approve the proposed plans and introduce
a fully Pedestrian Zone or Commercial Vehicle Traffic Limited Zone.
The first step of the introduced method starts with a census of the retail activities
located in this area of the city. As a part of the work for this thesis a census was made
on February and March of 2019. In this zone a total of 842 of establishment were
identified, 88 (10.1 %) establishments of which were the Population of Retail chains
and brand sector (see Table 7) and 754 (89.9%) were Population of Independent Retail
Sector (see Table 8).
37
ID Categories Elements
1 Ho.Re.Ca Hotel, Restaurant & Café 10
2 Textile & Leather 15
3 Jewelry & Watches 3
4 Home Furnishing & Décor 18
5 Cosmetic & Personal care 18
6 Accessories & Gadgets 2
7 Groceries 7
8 Other 25
Population of retail chains outlets 88
Table 7. Population of Retail chains and brand sector
During the survey 8 different categories and 26 sub-categories were used to identify
the retail establishments.
ID Categories Elements Sub-Categories Elements
1 Ho.Re.Ca Hotel, Restaurant &
Café 347
Fast-Food 28
Restaurant 42
Café 208
Hotel 69
2 Textile & Leather 212
Textile clothing 121
Footwear 85
Leather products 6
3 Jewelry & Watches 43
Gold & Diamond 4
Jewelry & Accessories 13
Watches 13
Optica 13
4 Home Furnishing & Décor 25 Home furniture’s 13
Tiles & Sanitation 6
38
Color shop 1
Natural Flower 8
5 Cosmetic & Personal care 43
Barber Shop 13
Farmacy 9
Cosmetics 10
Herbalist 11
6 Accessories & Gadgets 36
Phone shop 13
Gift shop 5
Tobacco shop 18
7 Groceries 18 Mini Market 14
Market 4
8 Other 29 Offices 16
Bank & Monetary 13
Population of Independent stores 754
Table 8. Population of Independent Retail Sector
4.2 Independent retail sector
The survey was made in the study area with the help of two assistant that helped with
the site survey. A total of 44 surveys were made in different establishment types which
helped to understand the retail population, establishment characteristics, supply
chains for different type of goods and the problems and suggestions of shop owners in
the study area.
Table 9 reported below include the general characteristics of the establishments located
in the study area (establishment area, number of employees, warehousing).
39
Categories Samples Id Sub-Categories Samples
Employees Area Warehousing
average average
(m2)
average
(m2)
% of
establishment
Ho.Re.Ca Hotel,
Restaurant & Café
347 1 Fast-Food 28 6.0 34.9 3.5 0.11
2 Restaurant 42 15.3 90.8 6 0.09
3 Café 208 11.0 185.1 4 0.06
4 Hotel 69 4.9 273.9 40 0.08
Textile & Leather 212 5 Textile clothing 121 4.8 39.6 4.5 0.15
6 Footwear 85 2.9 31.5 2.5 0.10
7 Leather products 6 4.0 40.0 8 0.20
jewelry &
Watches
43 8 Gold & Diamond 4 6.0 35.0 4 0.11
9 jewelry &
Accessories 13 8.0 25.0 2 0.08
10 Watches 13 3.0 25.0 2 0.08
11 Optica 13 3.0 20.0 2 0.10
Home Furnishing
& Décor
25 12 Home furniture’s 13 4.0 150.0 15 0.10
13 Tiles & Sanitation 6 4.0 150.0 15 0.10
14 Color shop 1 2.0 35.0 16 0.46
15 Natural Flower 8 3.0 16.0 1 0.06
Cosmetic
& Personal care
43 16 Barber Shop 13 2.0 20.0 2 0.10
17 Farmacy 9 4.0 25.0 10 0.40
18 Cosmetics 10 4.0 25.0 10 0.40
19 Herbalist 11 4.0 25.0 10 0.40
Accessories
& Gadgets
36 20 Phone shop 13 2.0 20.0 2 0.10
21 Gift shop 5 2.0 20.0 5 0.25
22 Tobacco shop 18 2.0 16.0 5 0.31
Groceries 18 23 Mini Market 14 3.5 27.5 5.5 0.20
24 Market 4 13.0 140.0 10.5 0.08
Other 28 25 Offices
26 Bank
Table 9. Establishment characteristics of the study case
40
4.2.1 Establishments area
In the study area a total of 726 independent stores were evaluated based on their
dimensions. The average size of an establishment in Blloku area is 103.8 sqm. It is
estimated that the total area of establishments in the study area is more than 78,000
sqm. In the table 6 reported below are reported the average area of the identified
categories of the establishments.
Categories Establishment
avg. size (sqm)
Depo avg.
size (sqm)
Depo
% avg.
Ho.Re.Ca Hotel, Restaurant & Café 179.2 9.4 0.08
Textile & Leather 36.3 4.5 0.15
Jewelry & Watches 24.4 2.2 0.09
Home Furnishing & Décor 120.5 12.4 0.18
Cosmetic & Personal care 23.5 7.6 0.33
Accessories & Gadgets 18.0 3.9 0.22
Groceries 52.5 6.6 0.14
Table 10. Average size of the Establishments & Depo in ‘Blloku’ district
Ho.Re.Ca is the category with the biggest average size of establishments with 179 sqm
average size. The nature of the service offered by these businesses is that to have a
bigger size comparing with the other establishments. The second biggest average size
of establishments is in Home Furnishing & Décor category as it needs more place to
expose their products. While the smallest average size of establishment is shown by
Accessories & Gadgets category as the goods traded by them are smaller in size and
need less place to be exposed.
41
Home Furnishing & Décor is the category with the biggest average size of the depo
with 12.4 sqm as the goods traded by them have bigger size comparing with the others.
However, they don’t have the biggest depo/establishment ratio with 18%. The biggest
depo/establishment ratio is at the Cosmetic & Personal care with 33%.
The small average space of depo in the establishments of the zone can be noted as a big
problem, highlighted also by the shop owners. The expensive renting/purchasing
prices of the properties in the zone and the need to maximize the area usage are the
main reason of the low depositing space. The fact that the establishments don’t have
extra depo bring in a higher number of deliveries per property.
4.2.2 Employees and vehicles
The estimated number of employees in the study area was 4920, with an average of 4.8
employees per establishment. In the table 11, reported below are the average number
of employees for each category.
Categories Employee number Avg. number
Ho.Re.Ca Hotel, Restaurant & Café 3448 9.9
Textile & Leather 848 4.0
Jewelry & Watches 214 5.0
Home Furnishing & Décor 90 3.6
Cosmetic & Personal care 146 3.4
Accessories & Gadgets 72 2.0
Groceries 101 5.6
Table 11. Employee number per category
42
Ho.Re.Ca is the category with the biggest number of employees with more than 3400
employees with an average number of 9.9 employees for establishment. The second
category with the biggest average number of employees is Jewelry & Watches with 5.0
employees per establishment, as in their structures the value of the goods is greater
they have big number of staffs.
Most of the establishments in the zone own vehicles used for both personal and
commercial purposes by the shop owner or the manager of the structure. But due to
time restriction they park them outside study area. The main type of the vehicles is
mini-van, used by the establishments to collect goods or in some cases even to deliver
orders. Almost 55% of the establishments included in Ho.Re.Ca category own vehicles.
The category that owns also vans is Home Furnishing & Décor and Groceries as the
goods traded by them are greater in size and weight.
4.2.3 Supply chains and deliveries
In the study area over 40 different supply chains were identified. The number of
deliveries was estimated for all of them. In some cases, the number was estimated
because of small number of observations. The total number deliveries on the study
area is estimated to be almost 218,000 deliveries per year. Considering that there are
only 283 working days per year we can assume that we have more than 800 deliveries
per day that are made in a time-window from 09:00 to 16:00, by taking out the time to
reach/leave the zone from/to the New-Ring of Tirana (assumed 15 minutes/direction)
and the lunch time (assumed 60 minutes) the effective working time of the commercial
vehicles in the zone 5 hours and 30 minutes.
43
Id Urban supply chain Stratum Deliveries
/Year
1 Soft beverage Ho.Re.Ca 16068
2 Fresh beverage Ho.Re.Ca 8983
3 Coffee Ho.Re.Ca 6266
4 Finished bakery products Ho.Re.Ca 43498
5 Fresh food Ho.Re.Ca 8762
6 General food products Ho.Re.Ca 10712
7 Non-Food Products Ho.Re.Ca 8869
8 Frozen Products Ho.Re.Ca 5850
9 Beer Ho.Re.Ca 19952
10 Alcohols Ho.Re.Ca 9048
11 Laundry Ho.Re.Ca 14716
12 Fish Ho.Re.Ca 9620
13 Meat Ho.Re.Ca 6123
14 Dried products Ho.Re.Ca 7826
15 Textile clothes Textile & Leather 6722
16 Foot wear Textile & Leather 6756
17 Leather clothes Textile & Leather 120
18 Accessories Textile & Leather 3120
19 Gold product Jewelry & Watches 136
20 Precious stones Jewelry & Watches 16
21 Watches Jewelry & Watches 120
22 jewelry Accessories Jewelry & Watches 104
23 Glasses & Sun glasses Jewelry & Watches 676
24 Furnitures Home Furnishing & Décor 78
25 Home accessories Home Furnishing & Décor 78
26 Kitchen accessories Home Furnishing & Décor 78
27 Lighting accessories Home Furnishing & Décor 78
28 Home textile Home Furnishing & Décor 78
29 pigments & color Home Furnishing & Décor 24
44
30 Tiles & Sanitation Home Furnishing & Décor 24
31 Natural flowers Home Furnishing & Décor 1440
32 Semi-finished products Home Furnishing & Décor 156
33 Cosmetics and personal care products Cosmetic & Personal care 1400
34 Hair and beauty salon equipment Cosmetic & Personal care 133
35 Medicines, drugs, pharmaceutical and health
products
Cosmetic & Personal care 592
36 Herbal products Cosmetic & Personal care 832
37 Cell phone & Accessories Accessories & Gadgets 35
38 Gift Accessories & Gadgets 60
39 Tabaco products & accessories Accessories & Gadgets 936
40 Food products Groceries 11752
41 Fresh food Groceries 5096
42 Meat products Groceries 1820
43 Other Other
Table 12. Supply chains identified in the study area
Considering that some goods as fresh food for Ho.Re.Ca, being a delicate product is
collected daily by the shopkeepers and as in most cases is not counted as a
collection/delivery due to its daily volume. We have also other cases that the number
of collection/deliveries is not counted due to daily collection by the shopkeepers, as in
the case of phone shops the accessories and the phones can be collected directly by the
shopkeeper. Based on this it can be said that we have an underestimation of the
deliveries on the zone.
4.2.4 Transport & delivery operations
Mainly the establishments located in the study area don’t receive goods before normal
activity time. Only 7% of the supply chain that concern to finished-bakery products,
45
fresh food and natural flowers are served before 06:00 in the morning. The distributing
time are windowed by the rules of the municipality.
The goods transportation to the study area is carried out by vans and mini-vans with
payload capacity up to 3.5 tons, as specified in the traffic restriction rules by the
municipality. Mostly the vehicles that perform the distributions are owned by the
manufacture/wholesalers that trade the goods. The results were insufficient to obtain
statistically significant results for the number of deliveries operated by third parties.
Mostly, a receiving document sign is required, and the goods must be always checked
by the receiver.
The goods delivery operations in 75% of the cases takes up to 10 minutes, not including
parking time and loading/unloading good and time to reach the shop from parking
place. In other cases, this operation time ca reaches up to 20 minutes and there are very
rarely cases that this time is more than 20 minutes.
4.3 Brand retail sector
There were identified 88 brand establishments inside the study area (see table 3). The
distribution process of this establishments is controlled by their main offices. Usually
this establishments are trading high quality and luxury products. The establishments
that trade leather, textile or high-quality jewelry usually are doing the transportation of
their goods by third parties.
Due to low number of observations on this sector no statically significant results were
obtained for their number of delivery and quantities. The demand produced by them
was assumed based on the demand of the independent retail sector, based on their %.
The total assumed number is over 16,000 deliveries per year.
46
Id Categories Deliveries
/Year
1 Ho.Re.Ca Hotel, Restaurant & Café 5080
2 Textile & Leather 962
3 Jewelry & Watches 244
4 Home Furnishing & Décor 1839
5 Cosmetic & Personal care 657
6 Accessories & Gadgets 104
7 Groceries 7260
Table 13. Number of deliveries per year for brand retail sector
4.4 Freight Deliveries & Quantity
The restrictions of the payload capacity per vehicle (<3,5 tons) and the fact that the
establishments in the study area have significantly small warehousing space increase
the number of the number of vehicles needed to satisfy the demand and the number of
deliveries.
The total number of deliveries for both independent and brand sectors was estimated
to be 234,000 deliveries per year.
The total quantity of goods transported in the identified supply chains is assumed to
be over 30,000 tons per year. This demand maybe underestimated compared with the
real one due to absences of establishments that are not counted by our survey, having
the establishments that are not visible from the main streets, or are located on the
upper floors of the existing buildings in the zone.
47
In table 14 are reported the summary of the current situation in “Blloku” district in
Tirana.
Features All the supply chains
Annual deliveries 234,000
Annual quantities
(tons) 30,000
Daily deliveries 827
Daily quantities (ton) 106
Number of vehicles 1,920
Table 14. Summary of actual scenario
4.5 Supply chains selected for the project implementation
The survey reported above as also previously indicated, was conducted with the aim to
evaluate the potential of e-Cargo Bikes for last mile delivery in Blloku district in
Tirana. This thesis also analyzes the business model of this for this proposal. The first
step of this starts with a ‘market segmentation’ that includes a light analysis of the
supply chains that can be suitable for the implementation of e-Cargo Bikes.
The data of the supply chains in the study area are obtained by the survey and by
analyzing them we are able to define the segment of the market for an Urban
Consolidation Center using electric cargo bikes for last mile deliveries, in the
assumption that traditional diesel vans are not allowed to access the study area. The
supply chains that can have a benefit have been selected using the following empirical
approach:
⋅ Exclude the urban supply chains of products that needs special treatments
(e.g. fresh products, frozen products, valuable products)
48
⋅ Exclude the urban supply chains of products that have big item sizes (e.g.
home furniture’s)
⋅ Exclude the urban supply chains of products that have great weight
quantity and low delivery number.
⋅ Include the urban supply chains of products that have high number of
deliveries and low weight
As a result, eleven urban supply chains have been selected among forty-three urban
supply chains, as the most suitable urban supply chains for the implementation of the
e-Cargo Bikes.
Id Urban supply chain Stratum Deliveries/Year
1 Coffee Ho.Re.Ca 6266
2 Non-Food Products Ho.Re.Ca 8869
3 Alcohol Ho.Re.Ca 9048
4 Dried products Ho.Re.Ca 7826
5 Accessories Textile & Leather 3120
6 Watches Jewelry & Watches 120
7 Jewelry Accessories Jewelry & Watches 104
8 Glasses & Sun glasses Jewelry & Watches 676
9 Cell phone & Accessories Accessories & Gadgets 35
10 Gift Accessories & Gadgets 60
11 Tabaco products & accessories Accessories & Gadgets 936
Table 15. Urban supply chains suitable for the UCC
The supply chains selected for the project implementation have a total of 37,000
deliveries/year corresponding with 16% of the total deliveries of the zone. In the
survey was estimated that the selected supply chains have an annual freight quantity
of 1,575 tons/year.
49
5. NEW SUPPLY CHAIN DESIGN
This part presents the assumptions and inputs for the formulation of the simulation
model in the proposed project. Principally, the e-cargo bike will be replacing the vans
and will have the same functions as them. The e-cargo bikes will be distributing the
goods of the selected supply chains, while the remaining part will be distributed as
normal by the diesel vans. The weight of the goods has an impact on the utilization
and capacity of the vehicles, which affect the number of the delivery tours covered per
day. When the bike will fulfill all the deliveries of the tour, the bike courier will return
to the depot, unload the empty container and load a filled to start a new delivery tour.
5.1 Supply chain characteristics
This part includes the inputs and the characteristics of the prosed model of the new
supply chain. Majority of the data of this part are taken from the survey of the current
situation in the study area.
5.1.1 Depot layout
Given that the commercial vehicles (>3.5 tons) cannot enter the Grand Ring of Tirana
(06:00 – 09:00 and 16:00 – 20:00), the depot of this project should be located as near as
possible to the study area and should be accessible by commercial vehicles during the
time window restriction. The best option is ‘Tregu Industrial’ (industrial market),
located in Kavaja street, accessible by the interchange of the Grand Ring. This zone has
available warehousing areas and it is managed by the municipality. The depot is in
distance 1,47 km from distribution area and we can take advantages from the new
‘reserved lanes for bikes’ constructed recently by the municipality.
50
Figure 13: Depot location
Based on the volume of the goods and warehouse operations, a warehouse layout was
designed keeping on mind three main principles of an efficient warehouse: flow,
accessibility and space.
The average daily volume of the goods distributed by cargo bikes is assumed
to be 18.5 m3 (based on the survey data)
Id Urban supply chain Stratum Daily
Quantity (kg)
Daily
Volume (m3)
1 Coffee Ho.Re.Ca 745.6 1.1
2 Non-Food Products Ho.Re.Ca 51.9 1.2
3 Alcohol Ho.Re.Ca 4176.7 3.1
4 Dried products Ho.Re.Ca 349.8 0.5
5 Accessories Textile & Leather 144.9 3.9
6 Watches Jewelry & Watches 25.8 3.2
7 Jewelry Accessories Jewelry & Watches 12.7 1.6
8 Glasses & Sun glasses Jewelry & Watches 4.9 0.6
9 Cell phone & Accessories Accessories & Gadgets 6.4 0.8
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10 Gift Accessories & Gadgets 12.4 1.5
11 Tabaco products & accessories Accessories & Gadgets 33.6 0.9
TOTAL 5565 kg 18.5 m3
Table 16: Freight volume demand
The depot will have a total area of 180 sqm (12m x 15m). Warehouse racking
system has a total of 42 linear meters of three shelf levels with dimensions 80
x 100 (W x H), with a racking storage capacity of 100 m3.
Figure 14: Depot layout
52
In the depot there are two unloading slots for the vehicles that supply the
goods. The area of the unloading slots will be used also as a parking area for
the vehicles during the night. A module to unload and load the containers
with 10 available slots. In this module the couriers will unload the empty
containers and load the re-loaded ones to start the new tour without losing
time. To inform the courier for the slot number of his container, an electronic
info board is installed next to the container slots.
For the warehouse operation, the following equipment’s are available:
⋅ Ladders
⋅ Mobile ladders
⋅ Utility truck
⋅ Hand truck
⋅ Hydraulic truck
In the depot there are located divided areas for office and a resting lounge.
The office is equipped with the necessary equipment to manage and organize the
work. The lounge area is equipped with the necessary equipment’s for the break time.
In the depot a security system and anti-fire system are installed and monitored by a
private company with a periodic payment.
The depot is managed and controlled by a warehouse manager who is responsible for:
• Control receiving, replacing and distributing operations by coordinating
operational, and personnel policies and procedures.
• Complies with warehousing, material handling, and shipping requirements by
studying existing and new legislation.
• Safeguards depot operations by establishing and monitoring security procedures
and.protocols.
53
• Controls inventory levels by conducting physical counts and compare them with
the data stored in the system.
• Maintains physical condition of depot by inspecting equipment and order the
repair or new purchase.
• Prepare an annual budget, schedule expenditures, analyze variances to archive
financial objectives.
• Recruit, select, and training employees.
Freight loading/unloading process is operated by two handlers that are responsible
for:
• Loading and unloading inventory from delivery vehicles and storage areas.
• Control and check all incoming goods.
• Store goods in assigned locations.
• Manage inventory by identifying, cataloging, and recording the location of
inventory in the depot.
• Record the number of units handled and moved every day.
• Analyze order sheets of each container and pull the appropriate products.
It is assumed that the goods are established on the warehouse early in the morning and
the first containers should be loaded and ready to go before 08:00. During the time that
the bikes starts the distributing tours the handlers should load the other container
within the time the carrier return to reload.
Time Time to operate Operation 6:30 Start 9:00 2:30 Loading/Unloading 9:30 0:30 Inventory control
12:00 2:30 Loading/Unloading
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13:00 1:00 Lunch time 15:00 2:00 Loading/Unloading 15:30 0:30 Inventory control 15:30 0:00 Finish
Table 17: Handler working time-table
5.1.2 Vehicle selection
The cargo bikes available on market have different technical characteristics, on their
size, payload capacity, volume capacity. Considering that the main disadvantage of
implementation of cargo bikes for urban freight distribution are the payload capacity
and the riding power. Capacity is important when assigning customers to routes and
when calculating how many delivery tours are necessary. Evidently, the capacity of the
e-cargo bikes cannot be exceeded during the route. For this project was chosen to use
electric assisted vehicles with the maximum payload capacity.
As a result of a deep research the e-Cargo Bike with the most suitable e-Cargo Bikes for
this project were the electrical cargo bikes produced by VELOVE, in Sweden.
To get more detailed information about the technical data of the, a communication
with Mr. Johan Erlandsson the CEO & Co-founder of VELOVE was established.
Mr. Erlandsson is an expert in the field of sustainability, he is a Lecturer &
Sustainability Researcher at Chalmers University of Technology and the founder of Eco
Profile Sustainability Consultancy & Forum. He holds a M.Sc. in Industrial
Engineering and Management from Linköping University, Sweden, and a Lic.Eng. in
Energy & Environment from Chalmers University of Technology, Sweden.
55
Figure 15: VELOVE, electric cargo bike (case used by DHL)
The VELOVE cargo bikes can carry up to 300 kg payload, without having performance
problems. In the back side of the bikes is incorporated a module that allows to remove
and change the container. The max loading area is 200*86 cm (L x W) and doesn’t have
any height restriction by the bikes body.
The battery of the bike is 1,2 kWh, which gives 50 km of range and takes 6h to
recharge. The batteries can do 800 charge cycles until they are at 80 % capacity. Up to
request, in the front part of the vehicle it can be installed a plastic cover, to protect the
driver from the rain. The bikes are very easy to ride, and the drivers don’t need a
driving license to use these vehicles. It fits in between posts while the large loading
space is comparable to that of a small delivery van.
The price of one Cargo Bike including electric assist and one 0.6 kWh battery is 8,190
euro. An extra 0.6 kWh battery costs 550 euro. A spare wheel costs 175 euro. The
module to carry the city container costs 300 euro.
The prices of one city containers is 2,200 euro and the price of the shelf system is 300
euro. Considering that the containers prices are expensive, and we need 2 containers
for one bike the option of purchasing them in another place was evaluated.
56
After a research, the best option to purchase container was evaluated to be a company
‘X’ that produce containers of different sizes, located in Istanbul, Turkey. Based on the
communication with them, their price was much lower. The price of one city container
with the dimensions 170 * 86 * 120 cm ((L * W * H) having a volume capacity of 1.5 m3,
suitable for the bike modules and with the shelf included costs 1500 Turkish Lira, that
correspond to 242 euro.
In each cargo bikes a hand truck will be attached for the walking delivery tours of the
courier.
5.2 Route generations
This part of the thesis represent a description of the model built for the proposed
scenario. The objective of this model is to minimize total driving distance, maximize
vehicle utilization and satisfy the demand of the supply chain. To present a reliable
study the distances used in the simulation are very close to the real-life driving
distances. The real distances of the streets were found and calculated using Google
Map.
Assumptions are set to develop the routes for cargo bikes:
⋅ Traffic congestion does not affect travel time
⋅ Homogeneous cargo bikes are used (equal capacity and technical
characteristics)
⋅ Volume and weight are limited
⋅ E-Cargo bikes are operating all times during working hours (no
maintenance & breakdowns)
⋅ E-Cargo bikes are always available at the depot when needed
⋅ The distribution of goods starts from 08:00
⋅ Daily working hours of the couriers is 8 hours
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⋅ Lunch time is 1 hour (12:30 – 13:30)
Technical data:
⋅ The average speed for cargo bikes is considered to be 15 kmph
(based on previous studies in other countries such as London and Paris, and a
report by TØI (Browne, Allen, & Leonardi, 2011; Dablanc, 2011; Midttun,
Ødegaard, Flatheim, & Stridh, 2012).
⋅ The average walking speed for couriers is considered to be 7 mps (half of
the normal walking speed 1.4 mps, as they carry hand trucks)
⋅ The average time to perform a delivery operation is considered to be 7.5
min (based on the data obtained by the survey)
⋅ Time to load/unload the containers to the bike’s module is considered to
be 5 min per operation.
⋅ Time to unload the orders from the bike to the hand truck is considered 2
min per order
⋅ Lost time to park and start up is considered 2.5 min per operation
⋅ Annual working days are considered 283 day
Reserved parking slots:
In the zone there are going to be 27 reserved parking slots for unloading operations
and parking the bike. The parking slots are equally distributed in the zone 350 m from
each other. The dimensions of the bike doesn’t prevent the other vehicles to use the
unloading parking slot. The bike can be parked and locked in a safe way in the parking
slot. And the courier can deliver the goods using a hand truck that is available at the e-
Cargo Bike.
The average distance of the parking slots with the depot is calculated to be 2.5 km.
58
Delivery points and orders:
There are 131 delivery points per day in the study area, to simplify the simulations it is
assumed that all the delivery points are equally distributed in the zone. The average
distance between retailers is calculated to be 75 m.
From each parking area can be reached in walking distance 5 delivery points, with a
total of 600 m walking distance.
The total weight of the orders is 5565 kg and the average weight per order is 42.5 kg. It
is assumed that all the orders have the same weight and as the e-Cargo Bikes has a
payload capacity of 300 kg they can carry 7 orders per route.
Delivery operations:
The courier after loading the container in the bike’s module, will move to the first
parking area and distribute the orders to the delivery points with the help of the hand
truck. After serving the delivery points that are reachable from the first park, he will
move to the second parking area and deliver the remaining orders. After he deliver all
the orders available on the bikes he will return to switch the empty container in the
depot.
Figure 16: Example of electric Cargo Bike operations
59
Figure 17: Example of courier walking operations
The route simulation was performed. One delivery tour take 135 minutes to be fulfilled
with an average driving distance of 5.35 km and 0.9 km walking distance.
Figure 18: Example of electric Cargo Bike route per tour
60
Figure 19: Example of courier walking route per tour
A bike can deliver up to 23 orders per day, having 3 full tours with 7 delivery points
per tour and a tour with 2 delivery points.
There are needed 6 cargo bikes to fulfill this supply chain. Each day three of the bikes
will perform 4 tours and the other bikes will perform only 3 tours. The total traveled
distance by all the e-Cargo Bikes is 106.3 km per day and 30,083 km per year.
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5.3 Cost-Benefit Analysis
The cost-benefit analysis is business process to analyze the decisions. The benefits
produced by the action are summed and then the cost associated with the project are
subtracted. The first step is to compile a comprehensive list of all the costs and benefits
associated with the project
Costs includes direct and indirect costs.
• Fix costs: these costs are related to structural costs as warehouse rent,
vehicles, headquarter bills. They are independent from the produced
service.
• Variable costs: they are related to the volume of the goods handling as
transportation and logistics costs. They increase proportionally with the
volume of the goods.
Benefits includes all direct and indirect revenues and intangible benefits, such as
increased production from improved employee safety and morale. It must be applied a
common unit of monetary measurement to all items on the list, taking care not to
underestimate costs or overestimate benefits.
Figure 20: Cost benefit analysis
62
The final step of this analysis is to compare the total aggregate costs and benefits
quantitatively to determine if the project is suitable to be implemented. If the benefits
are greater than the costs, it means that the project can be implemented, if not the
project should be reviewed and make the adjustments to reduce the costs and increase
the benefits.
5.3.1 Project financial costs The project costs analysis include all the cumulative costs to set and operate the
proposed project. The cost-benefit model is developed for a period of 10 years (equal to
the assumed effective lifetime of the e-Cargo Bikes), for the equipment’s that has a
smaller lifetime their cost is calculated based on their real lifetime. Interest rate is
calculated 6 %. The model is developed using the monetary values of each of the
following costs:
Id Indicators Explanation 1 Installation & fixed taxes Cumulative amount of money to register a new company
and business operation fixed taxes 2 Rental cost Depot rental cost 3 Vehicles cost Vehicle purchasing costs 4 Container Cost Container purchasing costs 5 Wages Cumulative amount of money for the wages 6 Depot installation costs Cumulative amount of money for the purchase and
installation of the depot equipment’s 7 Communication units Amount of money to purchase the communication units 8 Re-Charging cost The energy used to recharge the vehicles 9 Utility costs Cumulative amount of money to pay the utility bills,
insurance, security and anti-fire system for the depot
Table 18: Cost indicators of the proposed project
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Installation & fixes taxes The installation cost of a business includes the cost to register at national register center
and in the municipality and the fixed taxes to the municipality are calculated to be 1000
euro/year.
Rental cost
⋅ Depot size: 180 m2
⋅ Price/m2: 5.2 euro/m2/month
⋅ Depot cost is: 11232 euro/year
Vehicles cost ⋅ VELOVE Cargo Bike (electric assisted): 8190 euro
⋅ Extra battery: 550 euro
⋅ Spare wheel 175 euro
⋅ Module platform for city container: 300 euro
Total: 9215 euro
Purchasing cost for 6 e-Cargo Bike: 55290 Euro
Calculated based on interest rate of 6% for 10 years the total cost: 64134 Euro
Salvage value (re-selling) after 10 years: 6000 euro
Amount of depreciation per year = 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃ℎ𝑎𝑎𝑎𝑎𝑎𝑎𝑛𝑛𝑎𝑎 𝑃𝑃𝑐𝑐𝑎𝑎𝑐𝑐 −𝑆𝑆𝑎𝑎𝑆𝑆𝑆𝑆𝑎𝑎𝑎𝑎𝑆𝑆 𝑆𝑆𝑎𝑎𝑆𝑆𝑃𝑃𝑆𝑆𝐿𝐿𝑎𝑎𝐿𝐿𝑆𝑆
Amount of depreciation per year is 5813 euro/year
64
Figure 21: Linear depreciation of e-Cargo Bikes
Container purchasing cost
⋅ 2 m3 city container: 242 euro
12 city container costs: 2904 euro
Calculated based on interest rate of 6% for 10 years the total cost: 3368 euro
Salvage value (re-selling) after 10 years: 0 euro
Amount of depreciation per year is 337 euro/year
Wages
Warehouse manager
Net salary : 520 euro (65,000 ALL)
Gross salary: 646 euro (80,742 ALL)
Gross salary = Net salary + Social insurance contributions + Health insurance
contributions + Income tax
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Gross salary = 65 000+ 10.7% * 26 640 + 12.53% * (65 000 – 26 640) + 1.91% * 26 640 +
2.24% * (65 000 – 26 640) + 17.15% * (65 000 – 26 640) = 80 742 ALL (646 EURO)
Handler & Couriers
Net salary : 400 euro (50,000 ALL)
Gross salary: 486,5 euro (60,816 ALL)
Gross salary = Net salary + Social insurance contributions + Health insurance
contributions + Income tax
Gross salary = 50 000+ 10.7% * 26 640 + 12.53% * (50 000 – 26 640) + 1.91% * 26 640 +
2.24% * (50 000 – 26 640) + 17.15% * (50 000 – 26 640) = 60 816 ALL (486,5 EURO)
TOTAL
1 x warehouse manager: 7,751.2 euro/year
2 x handler: 11,676.0 euro/year
6 x couriers 35,028.0 euro/year
TOTAL 54,455,2 euro/year
Depot installation costs
Element pcs price/pcs (€) Total (€)
Ladders 2 70 140
Mobile ladders 4 150 600
Utility truck 4 110 440
Hand truck 10 80 800
Hydraulic truck 2 300 600
Pallet racking (2x3x0,8) 21 400 8400
Container slots 10 400 4000
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Monitors 2 350 700
Office equipment’s 1 1050 1050
Lounge equipment’s 1 1130 1130
Technics installation 1 1000 1000
Total 18860 €
Table 19: Depot installation costs
It is assumed that all the equipment’s salvage value after 10 year is 30 % of the
purchased value.
Calculated based on interest rate of 6% for 10 years the total cost: 21877 Euro
Salvage value (re-selling) after 10 years: 5210 euro
Amount per year is 1667 euro/year
Communication units
For the communication between the employees and the vehicle positions smartphone
with GPS service are used.
Price per device: 200 euro
9 x smartphone = 1800 euro
Calculated based on interest rate of 6% for 5 years the total cost: 2090 Euro
Salvage value (re-selling) after 5 years: 0 euro
Amount per year is 420 euro/year
67
Re-charging Cost
Electrical energy per vehicle recharging Kw/km/Vehicle: 0.020 kwh/km Price/Kw: 12 cents Average tour length: 5.35 km Total traveled km by all vehicles/year: 30,083 km Total annual energy consumed: 601.66 kW
Total charging cost: 72.2 euro/year
Table 20: Re-charging costs
Vehicle maintenance Costs
Battery change 2 x 550 euro (after 40,000 km)/bike = 990 euro/year
Spare wheel change 175 euro (after 4,000 km) /bike = 1575 euro/year
Normal maintenance 400 euro (after 6,000 km) /bike = 2400 euro/year
TOTAL = 4965 euro/year
Utility Costs
Security system 110 euro/month Fire system 40 euro/month Internet 20 euro/month Sim cards (9 pcs x 12 euro) 108 euro/month Water bills 30 euro/month Energy 70 euro/month
Total utility cost is 4536 euro/year
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Aggregated annual cost of the project
Id Indicators Annual costs (€)
1 Installation & fixed taxes 1000 2 Rental cost 11232 3 Vehicles cost 5813 4 Container Cost 337 5 Wages 54455 6 Depot installation costs 1667 7 Communication units 420 8 Re-Charging cost 73 9 Maintenance cost 4965
10 Utility costs 4536
TOTAL 84,497
Table 21: Aggregated annual cost of the project
The total cost of the new supply chain is calculated to be 84,497 euro/year. This cost
model is formulated assuming that there will be taken a business loan with interest of
6% and is going to be paid in ten years.
5.3.2 Project financial benefits
In this part are calculated the financial benefits of the project. The benefits are
calculated based on the price of the service and the quantity that this supply chain is
going to serve. The price of the service is assumed to be same with the other express
courier services that are operating in Tirana. The price including the 20% VAT (TVSH)
is going to be 9 cent/kg. The tax on profit according to the Albania law is 15%.
Indicator Value Unit
Price /Kg 9 Cent
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Price (ex. VAT)/Kg 7.5 Cent
Quantity/Year 1,575 Tons
Income +118,110 Euro
Costs -84,497 Euro
Profit 33,613 Euro
Tax on profit -5041.9 Euro
Benefit/Year +28,571 Euro
Table 22: Project financial benefits
The total annual benefit is calculated to be 28,571 Euro. As the benefits are greater than
costs the project is suitable to be implemented.
5.3.3 Break Even Point analysis
The break-even point analysis was done for this business model. The analysis was
conducted in annual terms. To calculate the breakeven point, the fixed and variable
costs were divided. Considering the type of vehicles used in this project the variable
costs are very low.
The break-even point was calculated with the following formula:
BEP = FC / (p-vc)
Where:
BEP – Break-even point
FC – Fixed costs
p – Price/Unit
vc – Variable costs/Unit
Fixed Cost 79459 €
Variable Cost/Unit 3.2 €/Ton
Price/Unit 75 €/Ton
BEP 1106 Ton (70%)
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The annual break-even point is reached after 70% of the demand, in other terms is 1106
tons over 1575 tons of goods. Following is reported the break-even point graph:
Figure 22: Break Even Point graph
6. BEFORE’ AND ‘AFTER’ SCENARIOS COMPARISON
6.1 ‘Before’ and ‘After’ scenarios assessment
The first step of this chapter is to show the current situation (Before) and the expected
situation (After) after the project implementation.
In the current situation, is assumed that all the supply chains are served by diesel vans
with maximum payload capacity >3.5 tons. There are 1920 diesel commercial vehicles.
There are identified 43 supply chains that serve the zone.
0
20000
40000
60000
80000
100000
120000
0 200 400 600 800 1000 1200 1400 1575
Break Even Point
Total Cost (€) Sales (€)
71
Figure 22. ‘Before’ Scenario representation
There were selected eleven supply chains that are suitable to implement this project.
The selected supply chains have a total of 37,000 deliveries/year corresponding with
16% of the total deliveries of the zone. In the survey was estimated that the selected
supply chains have an annual freight quantity of 1,575 tons/year.
Figure 23. ‘After’ Scenario representation
In the table 23. reported below a summary of two scenarios is given
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Features
Scenario Before Scenario After
All the supply
chains
Supply chains
served by e-CB
Remaining supply
chains
Annual deliveries 234,000 37,000 197,000
Annual quantities (ton) 30,000 1,575 8,386
Daily deliveries 827 131 696
Daily quantities (ton) 106 5.6 29.6
Number of vehicles 1,920 diesel
vehicles
6 e-Cargo
Bikes
1,616 diesel
vehicles
Table 23: Before and After scenarios summary
6.2 Logistic Sustainable Index calculation
To evaluate the impact of the project a set of indicators are selected from the Annex A
of LSI to compare the ‘Before’ and ‘After’ scenarios. The selected indicators are
reported in table 24.
Impact Area
Criterion Indicator Unit
Economy and Energy
Development Local/regional development Likert scale
Benefits Income generated Euro Strength and diversification of diversification of local economy Likert scale
Costs
Installation & fixed taxes Euro Rental cost Euro Vehicles cost Euro Container Cost Euro Wages Euro Depot installation costs Euro Communication units Euro Re-Charging cost Euro Utility costs Euro
Environment Air quality CO emission gr/year NOX emission gr/year
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NMVOC emission gr/year NH3 emission gr/year PM emission gr/year N2O gr/year
GHG emission CO2 emission gr/year Noise Noise level dB (A)
Transport and Mobility
Level of service Customer satisfaction Likert scale Supply chain visibility Likert scale
Transport system Violations Percentage
(%) IT, infrastructure and technology
Network barriers Likert scale Infrastructure usage Likert scale
Society
Greening Green reputation Likert scale Green concern Likert scale
Convenience Perceived visual and audio nuisance Likert scale Diffusion of information Likert scale
Living standards
Perceived alternative mobility Likert scale Quality of life Likert scale Changes in consumer behavior society Likert scale Lack of awareness of UFT impacts Likert scale Bad habits of UFT users Likert scale
Policy and measure maturity
Awareness Awareness level Likert scale
Managerial risks
Information flow problems Likert scale Time planning misjudgment Likert scale Poor or lack of know-how Likert scale Lack of cooperation Likert scale Lack of knowledge about stakeholders' requirements Likert scale
Background Replication Likert scale
Social acceptance
Social approval
Public acceptance Likert scale Social consciousness Likert scale Final user awareness Likert scale Final user acceptance Likert scale Decision making acceptance Likert scale
Regulations’ acceptance
Compliance with regulations Likert scale Enforcement Likert scale Eco-driving practice before the journey Likert scale Eco-driving practice during the journey Likert scale
Motivation for eco-driving practice Likert scale
User uptake Flexibility Penetration Likert scale Stakeholder approval Stakeholder acceptance Likert scale Transferability Replication Likert scale
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Table 24: Logistics sustainability index indicators
The values for the cost and the benefits are taken from the Cost/Benefit analysis
reported in the previews chapter.
The air emissions indicators:
⋅ CO emission
⋅ NOX emission
⋅ NMVOC emission
⋅ NH3 emission
⋅ PM emission
⋅ N2O emission
Are calculated by using the COPERT Methodology ‘EMEP/EEA air pollutant emission
inventory guidebook 2013’, using the algorithm of the first method (Tier 1)
Ei = ∑j ( ∑m (FCj,m x EFi,j,m ))
Ei = emission of pollutant i [g],
FCj,m = fuel consumption of vehicle category j using fuel m [kg],
EFi,j,m = fuel consumption-specific emission factor of pollutant i for vehicle
category j and fuel m [g/kg].
In this project the mean value of the emission factors is used. The maximum and
minimum values correspond to :
⋅ the maximum values correspond to uncontrolled vehicle technology
⋅ the minimum values correspond to a European average in 2005 (before the introduction
of Euro 4).
The greenhouse gas (GHG) emission is calculated based on the formula:
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CO2 emission g/MJ of fuel = 3,67 x cC / Ha
Where:
cC = fuel carbon content (mass basis)
Ha = lower heating value of the fuel
The noise level is calculated using a model formulated by the French
‘Centre.Scientifique.et.Technique.du.Batiment’ with a predictive formula of equivalent
emission level based on the average acoustic level (L50):
Leq = 0.65 L50 + 28.8 [dB(A)]
L50 is calculated considering only the equivalent vehicular flows (Qeq)
and is given by:
L50 = 11.9 Log Q + 31.4 [dB(A)]
The other indicators are evaluated using the ‘Likert Scale’ based in a reasonable analysis
using the stakeholder feedback through questionnaire survey was done. For each of the
selected indicators was given a value thinking of what their impact could have been in
before and after scenarios.
The indicators are computed for ‘Before’ and ‘After’ scenarios, in the tables 27 and 28
reported below are given the values for both scenarios:
Criterion Indicator Value Unit
Development Local/regional development 2 Likert scale
Benefits Income generated 0.00 Euro Strength and diversification of diversification of local economy 1 Likert scale
Costs
Installation & fixed taxes 0.00 Euro Rental cost 0.00 Euro Vehicles cost 0.00 Euro Container Cost 0.00 Euro Wages 0.00 Euro Depot installation costs 0.00 Euro Communication units 0.00 Euro Re-Charging cost 0.00 Euro
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Maintenance costs 0.00 Euro Utility costs 0.00 Euro
Air quality
CO emission 402,086.40 gr/year Nox emission 810,149.76 gr/year NMVOC emission 83,677.44 gr/year NH3 emission 2,064.77 gr/year PM emission 82,590.72 gr/year N2O 3,042.82 gr/year
GHG emission CO2 emission 143,447,040.00 gr/year Noise Noise level 67.62093 dB (A)
Level of service Customer satisfaction 2 Likert scale Supply chain visibility 3 Likert scale
Transport system Violations 80 Percentage (%)
IT, infrastructure and technology
Network barriers 1 Likert scale Infrastructure usage 1 Likert scale
Greening Green reputation 1 Likert scale Green concern 1 Likert scale
Convenience Perceived visual and audio nuisance 4 Likert scale
Diffusion of information 2 Likert scale
Living standards
Perceived alternative mobility 1 Likert scale Quality of life 1 Likert scale Changes in consumer behavior society 2 Likert scale
Lack of awareness of UFT impacts 1 Likert scale
Bad habits of UFT users 1 Likert scale Awareness Awareness level 2 Likert scale
Managerial risks
Information flow problems 1 Likert scale Time planning misjudgment 1 Likert scale Poor or lack of know-how 5 Likert scale Lack of cooperation 3 Likert scale Lack of knowledge about stakeholders' requirements 3 Likert scale
Background Replication 1 Likert scale
Social approval
Public acceptance 2 Likert scale Social consciousness 2 Likert scale Final user awareness 1 Likert scale Final user acceptance 2 Likert scale Decision making acceptance 2 Likert scale
Regulations’ acceptance
Compliance with regulations 2 Likert scale Enforcement 2 Likert scale
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Eco-driving practice before the journey 1 Likert scale
Eco-driving practice during the journey 1 Likert scale
Motivation for eco-driving practice 1 Likert scale
Flexibility Penetration 2 Likert scale Stakeholder approval Stakeholder acceptance 2 Likert scale Transferability Replication 1 Likert scale
Table 25: Values of the LSI indicators in ‘Before’ scenario
Criterion Indicator Value Unit
Development Local/regional development 4 Likert scale
Benefits Income generated 28,571.00 Euro Strength and diversification of diversification of local economy 3 Likert scale
Costs
Installation & fixed taxes 1,000.00 Euro Rental cost 11,232.00 Euro Vehicles cost 5,813.00 Euro Container Cost 337.00 Euro Wages 54,455.00 Euro Depot installation costs 1,667.00 Euro Communication units 420.00 Euro Re-Charging cost 73.00 Euro Maintenance cost 4965.00 Euro Utility costs 4,536.00 Euro
Air quality
CO emission 338,422.72 gr/year Nox emission 681,876.05 gr/year NMVOC emission 70,428.51 gr/year NH3 emission 1,737.85 gr/year PM emission 69,513.86 gr/year N2O 2,561.04 gr/year
GHG emission CO2 emission 120,734,592.00 gr/year Noise Noise level 67.04189 dB (A)
Level of service Customer satisfaction 4 Likert scale Supply chain visibility 4 Likert scale
Transport system Violations 10 Percentage (%)
Network barriers 4 Likert scale
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IT, infrastructure and technology Infrastructure usage 4 Likert scale
Greening Green reputation 5 Likert scale Green concern 5 Likert scale
Convenience Perceived visual and audio nuisance 1 Likert scale
Diffusion of information 4 Likert scale
Living standards
Perceived alternative mobility 5 Likert scale Quality of life 5 Likert scale Changes in consumer behavior society 5 Likert scale
Lack of awareness of UFT impacts 5 Likert scale
Bad habits of UFT users 5 Likert scale Awareness Awareness level 5 Likert scale
Managerial risks
Information flow problems 1 Likert scale Time planning misjudgment 1 Likert scale Poor or lack of know-how 1 Likert scale Lack of cooperation 1 Likert scale Lack of knowledge about stakeholders' requirements 1 Likert scale
Background Replication 5 Likert scale
Social approval
Public acceptance 5 Likert scale Social consciousness 5 Likert scale Final user awareness 5 Likert scale Final user acceptance 5 Likert scale Decision making acceptance 5 Likert scale
Regulations’ acceptance
Compliance with regulations 5 Likert scale Enforcement 5 Likert scale Eco-driving practice before the journey 5 Likert scale
Eco-driving practice during the journey 5 Likert scale
Motivation for eco-driving practice 5 Likert scale
Flexibility Penetration 4 Likert scale Stakeholder approval Stakeholder acceptance 4 Likert scale Transferability Replication 3 Likert scale
Table 26: Values of the LSI indicators in ‘After’ scenario
Considering that the values of the indicators are expressed in different units: (Euro,
g/year, dB(A) ), all of them must be monetized in Euro. This step was done by using
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the ‘Harmonized European Approaches for Transport Costing and Project Assessment’
guideline. The external costs of the pollution are calculated by the annual production
of the pollutant agent (ton/year) and the external cost of that agent (euro/ton).
Considering that the external cost for Albania, aren’t available, for this actual study
case the Italian standards are used.
Emission Cost Unit
CO 0.004 Euro/g
NMVOC 0.0016 Euro/g
NOx 0.0032 Euro/g
PM 0.39 Euro/g
N2O 0.003 Euro/g
NH3 0.0221 Euro/g
CO2 0.0001 Euro/g
Table 27: Air emission indicators
The same guideline determines, also the methodology to calculate the monetary cost
for the noise pollution. The population is divided in: highly annoyed people annoyed
people a few/not annoyed people Using the following equations:
Where:
⋅ (%HA) - % of highly annoyed people
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⋅ (%A) - % of annoyed people
⋅ (%LA) - % of a few/not annoyed people
Group % Cost
Highly annoyed people 20.3 85 Euro/person
Annoyed people 41.3 85 Euro/person
Few/not annoyed people 38.4 37 Euro/person
Table 28: Annoyed level of the population for noise pollution
The next step is the value normalization. The values of the negative indicators is signed
with a negative sign (minus) and the values of the positive indicators are signed with a
positive sign (plus).
The final step of this ex-ante evaluation is the performance calculation of each impact
area using the following formula:
LSIi = ∑ 𝐼𝐼𝑀𝑀𝑚𝑚=1 Rm * Wm
Where:
LSIi = Logistic Sustainability Index assessing the performance of impact area i
Im = Normalized value of indicator m with minus or plus sign
Wm = weight of indicator m
The total Logistics Sustainable Index is calculated as the weighted sum of the LSIi with
the following formula:
LSI = ∑Ri LSIi * wi
Where:
wi = are the weights of the impact areas.
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6.3 LSI Results
The performance for each impact area is calculated for both ‘Before’ and ‘After’
scenarios. The results are given in tables 29 and 30 reported below:
Impact area Impact area performance
Economy and Energy 0.056 Environment -0.327 Transport and Mobility 0.095 Society 0.089 Policy and Measure maturity -0.085 Social acceptance 0.134 User uptake 0.029
LSI -0.009
Table 29: Performance of the impact areas in the ‘Before’ scenario
Impact area Impact area performance
Economy and Energy 0.20 Environment -0.28 Transport and Mobility 0.25 Society 0.30 Policy and Measure maturity 0.05 Social acceptance 0.39 User uptake 0.06
LSI 0.97
Table 30: Performance of the impact areas in the ‘After’ scenario
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The following radar graph represent the comparison of the performance of each
indicator between both scenarios.
Figure 24: Impact areas performance
Considering that the costs are signed as negative values and the benefits as positive
values, we have that by the increase of the Logistic Sustainability Index the overall
performance of the selected measure improves.
Economy and Energy: The performance of this impact area is improved as the
implementation of the selected measure bring operating financial benefits. This type of
sustainable and eco-friendly measures has a good effect on the local economy and
development.
0.20
-0.28
0.25
0.30
0.05
0.39
0.060.052
-0.3270.095
0.089
-0.085
0.134
0.029
-0.40
-0.30
-0.20
-0.10
0.00
0.10
0.20
0.30
0.40Economy and Energy
Environment
Transport andmobillity
SocietyPolicy and measure
maturity
Social acceptance
User uptake
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Environment: We can see a light improvement on the environment impact area as
the implementation of this measure is decreasing significantly the number of fueled
commercial vehicles. The air, GHG, and noise pollutions are lightly reduced and, in
both scenarios,, they are in negative values.
Transport and Mobility: In this impact area we have a significant improvement.
The new served supply chain will have a greater transparency with the clients. The
new used vehicles are going to reduce significantly the violations, the infrastructure
usage is greater, and they don’t have network barriers due to their dimensions and
characteristics.
Society: The performance is significantly improved as the evaluation is based mainly
in life quality, this type of eco-friendly projects have a positive impact to the
environment and they have greater values in the ‘after’ scenario evaluation.
Policy and measure maturity: This impact area consider the level of the
stakeholder involvement and level of implementations of standards or procedures on
information flow between stakeholders affect by the measure implementation.
Social acceptance: This impact area have similar considerations with the society
impact are, they consider the life quality and as the implemented measure has an eco-
friendly approach the evaluation of after scenario is greater.
User uptake: In this impact area is considered the stakeholder acceptance of the
implemented measure and the possibility of re-use or replicate this measure in other
contexts.
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7. FINAL CONLUSION
In this chapter are reported the final conclusions of the master thesis and the
suggestions for further researches are proposed. The survey, analysis, findings and
simulations has revealed that the implementation of e-cargo bikes, is a potential
solution for a sustainable urban freight distribution.
7.1 Conclusion
The demand for goods is daily increased and brings with it a daily increase of the
externalities. The urban freight distribution is not a problem only for Tirana or certain
cities, but a world widely challenge. The urban context itself with the narrow streets,
lack of parking and traffic jams, limit the urban freight distribution. In the other hand
the externalities of the road traffic to the life-quality and environment force the local
and central governments to implement policies that limits the operators to distribute
urban freight within the city. Having an increase of the demand and a decrease of the
ability to perform the operation for the demand fulfillment, we can say that the
scenario of urban freight distribution is going forward a collapse.
Tirana is one of most polluted cities in western Balkan. The air pollution, noise and
traffic jams are great negative factors that affect the life-quality and the environment. A
big influence in the road traffic externalities is due to the commercial vehicles that are
supplying the city necessities for goods. The municipality of Tirana is doing many
investments and policies to reduce the pollution. The main focus is in the investments
for new bus lines and lanes, bike promotion and bike reserved lanes and public
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parking. In the field of urban freight distribution there is not a proper policy to
evaluate and solve the problem. The only action of the municipality is the time-
windowed traffic limitation for commercial vehicles. A sustainable solution is needed.
The main purpose of the thesis was to evaluate if the implementation of a new supply
chain served with alternative vehicles, is suitable and effective in Tirana. The objective
was to create a supply chain that reduce the costs, the traffic externalities and satisfy
the demand.
Considering this problem and lack in Tirana, a research was made to find a sustainable
solution that is feasible and suitable based on the city characteristics. Among different
alternatives, the usage of electric Cargo Bikes was chosen as an avantgarde and eco-
friendly solution. Based on market researches and knowledges the zone to conduct the
study case was selected to be on the busiest districts of Tirana, Blloku district.
The lack of studies, data and information brought the need of the survey to reveal the
current situation of urban freight delivery in the study area. The data that were aimed
to obtain form the survey were: the freight demand in terms of yearly quantity and
volume, the actual supply chain characteristics, establishment characteristics and the
problems that the stakeholders are facing.
The field survey was conducted in Blloku district, with the assistance of two colleagues
and the necessary data to simulate the new supply chain were gained. There were
identified a total population of 842 establishments. Their characteristics as area,
warehousing capacity, number of employments and number of vehicles were obtained.
The current supply chains their characteristics as vehicle type, parking availability and
delivery operating time were identified.
Another important goal of the field survey was the identification of the freight demand
in terms of yearly quantity and volume. Based on the data gained by the survey the
demand quantity of each type of good was estimated.
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In the survey there was an open question for the shopkeepers to express their problems
and expectations. The main problems that the stakeholders in the study area are the
lack of reserved parking for loading/unloading operations, traffic congestion, illegal
parking, audio and visual pollution, lack of available warehouses. The also express the
need and the importance to take some sustainable solution to eco-friendly alternatives.
After the reveal of all the supply chains that were operating in the zone, there were
selected the ones that could be suitable for the new project. The selection was done in
an empirical approach that exclude the ones that have limitations to be applied in the
proposed project.
In order to simulate the new proposed supply chain and to check if it was a realistic
and efficient solution all the characteristics of the supply chain were designed
according to the real-world parameters. The depot location and characteristics, vehicles
selection, logistic operations including staff duties were designed and simulated. To
check if the new proposed model was economically efficient and suitable a
Cost/Benefit analysis and a Break Even Point analysis were conducted.
In the proposed supply chain there is projected to have 27 new reserved parking slots
for the loading/unloading operations. These new reserved parking lanes will be used
also by the other supply chains that are served with fueled commercial vehicles. This
will reduce many externalities that are caused by traffic congestion and illegal parking.
The thesis consisted in comparing the current situation with proposed project. To
evaluate the impact of the project an ex-ante evaluation of the scenarios was
conducted. The impact in different impact areas and with different indicators was
evaluated and compared, to see the results of the proposed project. The analysis of the
results revealed that the proposed supply chain is feasible, efficient and will reduce the
traffic congestion, illegal parking, air pollution, GHG emission and noise pollution.
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As conclusion ,this study has revealed that the implementation of electric cargo bikes
for urban freight distribution is an efficient a sustainable solution. Based on analysis
and the simulations conducted in the thesis it can be said that the proposed solution
confirm the hypothesis that cargo bikes reduce road traffic externalities, reduce costs
and has a sufficiently good level of service.
Finally, to answer the research question, we can say that the implementation of a
supply chain served by electric cargo bikes in Tirana, has the potential to be a
sustainable urban freight distribution model. This model is able to provide economic,
environmental and social benefits.
7.2 Further researches
The results of this thesis has provided interesting results for the performance of electric
cargo bikes in urban freight distribution in Tirana. However, considering that in some
cases the data and information taken from the survey and other sources can deviate
from reality is important to have further researches to evaluate the effects in different
city context. Another aspect can be the researches to see the effects, that different
policies or measures alters the potential modal change from fueled commercial vehicles
toward electric cargo bikes or other eco-friendly vehicles.
It would be very interesting if the proposed project is implemented as a pilot project in
Tirana and to obtain real performance data. The encounter of the proposed project with
the real-events as traffic congestion, weather conditions, routes and human limitations
can lead to more realistic conclusions.
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BIBLIOGRAPHY
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