1. Urban Consolidation Centers: State-of-the-art, best practices and operational challenges
A.Gialos1, A. Ntzoufas1, V. Zeimpekis1,2
1. OPTILOG Advisory Services
{agialos; antzoufas;
2. Department of Financial & Management Engineering, University of the Aegean
Funded by the Horizon Framework Programme of the European Union

2. Agenda Urban Consolidation Centers: Definition & main characteristics
UCCs business models and operational processes
Indicative best practices from Europe
Conclusions and challenges

3. Agenda Urban Consolidation Centers: Definition & main characteristics
UCCs business models and operational processes
Indicative best practices from Europe
Conclusions and challenges

4. 40% of the urban traffic nuisance is caused due to urban freight transport operations
Source: Gonzalez-Feliu, 2011
Source: Dablanc and Rodrigue, 2009

5. Urban Consolidation Center(UCC): Definition
An Urban Consolidation Center is defined as a logistics facility (cross-docking facility) situated in relatively close proximity to the geographic area that it serves (e.g. a city center, an entire town or a specific site such as a shopping center), which consolidates deliveries that are carried out within that area. A UCC can provide a range of other value-added services such as reverse logistics, labelling, etc .
Shippers/ Manufacturers/ Retailers
Urban Consolidation Center
Customers / retail shops
Consolidated orders to retail shops
Supplier 1
Supplier 2
Supplier 1
Supplier 2
Supplier 3
Supplier 3

6. When the establishment of a UCC provides an added value ? (1/2)
Urban centers that exhibit high levels of traffic nuisance
For accommodating the needs of shopping centers or areas with a significant number of retail stores that require small amounts of deliveries in high frequency though
Areas that are problematic in delivery operations due to lack of parking slots / loading-unloading ramps
Historic centers of cities with no vehicle access or with specific restrictions
In which cases ?
What are the reasons ?
Source: Browne et al., 2005

7. When the establishment of a UCC provides an added value ? (2/2)
Economic benefits
Environmental benefits
Social benefits
Minimization of transportation cost
Minimization of empty runs (loading factor)
Optimization of vehicle routing
Optimal customer service
Reduction of GHG emissions and noise
Reduction of traffic nuisance and accident fatalities
New jobs in the logistics sector
In which cases ?
What are the reasons ?
Source: Browne et al., 2005; Patie and Browne, 2010; Tavasszy et al., 2014

8. Three main types of UCCs
UCC for specific purpose
(Construction UCC/Stockholm)
UCC serving an urban center
(Cityporto/Padova, CityDepot/Brussels)
UCC serving a specific point
(Heathrow Airport UCC/London)
For specific purpose (e.g. construction facility)
Predefined period of operation
Close to the location of the operation site
Serving customers in a specific site
Reducing congestion and offering an environmentally friendly distribution system
Short distances from the center ( km)
Serving the needs of a specific point (e.g., mall).
The distribution of goods is carried out by electric vehicles or hand trolleys.
Location: Short distance from the point of service

9. The main characteristics of a UCC
Goods distributed
Dry, Refrigerated, Frozen goods
Loading unit
Item, Carton, Pallet, Barrel, Bulk
Services provided
Consolidation , Distribution , Cross docking, Storage,
Other (Reverse logistics, labeling, order picking, etc.)
Ownership and UCC operator
Public authorities (e.g. municipality), Chamber of Commerce, Private company (e.g. 3PL or carrier), Joint venture, Public Private Partnership (PPP)
Type of delivery vehicles
Cargo bikes, Motorcycles, Tricycles, Vehicles <3.5 ton (Van),
Vehicles 3,5 tn - 7,5 tn (LCV), Vehicles> 7,5 tn (HDV)
Fuel
(for vehicles)
Petrol, Diesel, LPG, CNG, Hybrid, Electric
Distance from the UCC to the point of service
Short (<1km), Medium (1km - 6 km), Long (> 6 km)
Typical size of a UCC
Small (<350 sq.m), Medium (350 sq.m sq.m), Large (> 1500 sq.m)

10. The UCCs were launched in Europe in 1970 and provided numerous services which defined their size
Micro-Consolidation center, UK
160
Ecologis, Italy
400
Broadmead  UCC, UK
465
Txita, Spain
500
The  Green  Link, France
750
La  Rochelle UCC, France
800
Lucca UCC, Italy
810
CityDepot, Belgium
1000
Cityporto, Italy
Monaco UCC, Monaco
1300
Leiden UCC, Netherlands
1500
Malaga UCC, Spain
3000
Stockholm UCC, Sweden
3500
Heathrow Airport UCC, London, UK
5500
Source: Allen et al., 2012

11. Cooperation among all stakeholders is essential for the effective operation of a UCC
UCC’s Operator
(Distribution)
(Distribution)
Shipper
Consignee
Carriers
Carriers
(Reverse logistics)
(Reverse logistics)
Production companies
3PL Companies
Suppliers of raw materials
Retailers
Courier companies
Transport companies (Contracted vehicles)
Transportation provided by senders or by UCC (private vehicles)
Public authorities
Private company
Joint Venture
PPP
Deliveries with UCC’s private vehicles
Transport companies (Contracted vehicles)
Retail stores
Mini markets
Restaurants
Residences
Hotels
Local authorities and Public institutions: Regions, municipalities, chambers, universities, professional associations

12. Agenda Urban Consolidation Center: Definition & main characteristics
UCCs business model and operational process
Indicative practices from Europe
Conclusions and challenges

13. Consolidating goods in a UCC and distributing in retail stores - Cross-docking
AS-IS
URBAN AREA
RURAL AREA
L.F. > 90% (10 pallets)
Rigid Vehicle 1
Distance Travelled
(return trip): 112 km
Retail Store A
L.F. > 90% (10 pallets)
Rigid Vehicle 2
Distance Travelled
(return trip): 112 km
Retail Store B
L.F. > 90% (10 pallets)
Rigid Vehicle 3
Distance Travelled
(return trip): 112 km
Retail Store C
Total Distance Traveled (return trip): 336 km
Three rigid own-truck vehicles moving freight from the distribution center to the retail stores
RURAL AREA
TO-BE
L.F. > 90% (10 pallets)
Rigid Vehicle 1
Distance Travelled :
12 km
Retail Store A
Metamorfosi
L.F. > 90% (10 pallets)
Rigid Vehicle 2
Distance Travelled :
12 km
UCC
Retail Store B
L.F. > 90% (10 pallets)
Rigid Vehicle 3
Distance Travelled :
12 km
L.F. > 90% (30 pallets)
Articulated Vehicle
Distance Travelled
(return trip): 90 km
Retail Store C
Total Distance Traveled: 36km
Total Distance Traveled(with return trip): 90Km
One articulated own-truck vehicle moving freight from the distribution center to the UCC
Three rigid contracted vehicles moving freight from the UCC to the retail stores

14. The Cross-Docking process in a UCC
Outbound
Inbound
Arrival of UCC’s truck
Arrival of shipper’s truck
Receiving
Unloading
Checking
Sorting
Checking
Loading
Dispatching
Delivery
Short term Storage

15. Agenda Urban Consolidation Center: Definition & main characteristics
UCCs business model and operational process
Indicative practices from Europe
Conclusions and challenges

16. Operational UCCs in Europe (indicative)
Sweden 2 UK 3
Netherlands 2
Germany 5
France 7
Italy 10
Spain 1
Source: Jesus Gonzalez-Feliu, 2011

17. Binnenstadservice / Nijmegen / Netherlands (1/2)
Binnenstadservice Nederland
Country
Netherlands
City
Nijmegen
Category of UCC
Serving urban area
Size of UCC
1000 m2
Management
Private company
Services
Consolidation, Distribution, Cross-docking , Value added services
Type of goods
Dry cargo
Loading unit
Carton
Vehicles used for distribution
Bicycles, E-cargo tricycles,
Electric Vans, CNG Vans & LCV
Further Info
Operation since 2008,
It serves residents,
98 customers
Funding
Public subsidy
Location
1,8 km away from the center of the city
Description of the UCC
It provides freight consolidation services, warehousing and distribution.
Goods are delivered to the distribution center - the last mile (to retailers) is performed with environmentally friendly vehicles (Contracted).
Retailers do not pay for the delivery of goods, but for the additional services (e.g. packaging, collection of packaging materials, etc.).
The initial funding of the UCC was public in order to encourage the retailers to participate.
 The Binnenstadservice operates in terms of franchising, in 15 Dutch cities.
The vehicles used for the operation are contracted.

18. Binnenstadservice / Nijmegen / Netherlands (2/2)
Benefits
Key factors of success
Reduction of the stock on high-cost shop premises.
Reduction of the time required to receive or send goods.
Reduction of delivery times in the last mile (10% cost reduction).
The shops pay a small amount for the time- consuming services (collection of packaging materials, returns, recycling).
Reduction of congestion.
Fewer trucks on city streets.
Reduction of air pollutants by 40%.
Participation and support by retailers.
Initial public subsidized.
Retailers payed a fee for value added services (UCC sustainability).
The UCC leads to cost savings for retailers, shippers and transport companies.

19. Stadsleveransen / Gothenburg / Sweden (1/2)
Country
Sweden
Town
Gothenburg
Category of UCC
Serving urban area
Management
Private company
Services
Consolidation, Distribution, Cross-docking , Value added services
Type of goods
Dry cargo
Loading unit
Carton
Vehicles used for distribution
2 E-cargo tricycles,
2 electric vans
Further Info
Operation since 2011
Over 400 customers
Receiving 300 cartons / day
Funding
Public subsidy
Location
1 km away from the center of the city
Description of the UCC
Sustainable urban distribution system by using advanced technology vehicles and innovative solutions.
Launched in 2012, with a potential of 8 retailers.
It was organized in a parking area and the manager was the local retail trade association.
For the distribution of goods, electric vans are used.
Within one year, the UCC exceeded the 200 customers, and a transport company took over the deliveries, using new electric vehicles as well as e-cargo bicycles.
To increase its revenues, the UCC is offering advertising space on the operating vehicles.

20. Stadsleveransen / Gothenburg / Sweden (2/2)
Benefits
Key factors of success
Use of environmentally friendly vehicles (cleaner vehicles).
Reduction of GHG emissions.
Reduction of noise pollution and traffic congestion.
The broad participation of stakeholders in the project, allowing effective and rapid response to changes in the operation of the city's urban distribution.
Cooperation and communication among the parties involved, significantly contributed to the successful operation of the UCC.
The use of electric vehicles for the distribution of goods.
The widespread acceptance of the UCC.
The funding of the UCC.

21. Luccaport / Lucca / Italy
The UCC’s equipment
The UCC has 1000 m2 of roofed warehouse as well as a 900 m2 open area.
For the handling of goods within the UCC, manually pallet trucks are used.
The loading units that the UCC mainly uses are roll cages, cartons, parcels and pallets.
For delivering the goods in the city center, the UCC has six electric vehicles, while for the deliveries made outside the city (line-haul) a diesel truck is available.

22. Interporto / Padova / Italy
Operation model of the UCC
Timetable of operation
Transport companies deliver the goods to their customers to the UCC.
In the UCC, goods are separated according to their final destination.
Then the goods are consolidated and loaded in the delivery vehicles.
The environmentally friendly vehicles of the UCC cover the last mile and deliver the goods to the end customers, having maximized the load factor and simultaneously reduce the total number of routes performed per day.
The aim of the UCC is to have many delivery points to nearby destinations, so the distribution becomes more efficient and effective.
Working hours: 7:00 a.m. to 7:00 p.m.
Delivery hours (two routes daily):
1st route: departure at 07: 00pm.
2nd route: departure at 02: 00pm.
The daily deliveries are distributed to stores without following any time windows.
The time windows are followed only in terms of express courier deliveries.

23. Agenda Urban Consolidation Center: Definition & main characteristics
UCCs business model and operational process
Indicative practices from Europe
Conclusions and challenges

24. UCCs- Key success factors
The main factors that contribute to the successful development and operation of a UCC are as follows:
The support (and sometimes participation) of the local authorities (e.g. Municipality, Chambers) is very important. Public authorities should be sensitive and have a certain culture concerning sustainability in freight transport, thus supporting the idea of a UCC.
Development and implementation of legislation (or regulations) in favor of the UCCs’ operation is crucial for the UCCs’ prosperity (e.g. free movement of UCC’s vehicles within the historic center, free use of bus lanes, special parking bays for delivery vehicles, serving public bodies only through UCCs, etc.)
Public funding (at least during the initial phase of the project) and concession of facility space of UCC’s premises
Neutral role of the company that operates the UCC
Wide acceptance of the UCC and participation of all stakeholders (shippers, transport carriers, consignees, chambers of commerce)
Small serving area with multiple delivery points (the UCC requires significant number of deliveries per vehicle)
Measures and agreements between UCC and transport companies to avoid unfair competition (mainly for transport or distribution of goods outside the areas served by the UCC)

25. Conclusion and main challenges (1/2)
The use of a UCC for performing urban distribution is a widespread practice in Europe
The main benefits of using a UCC include:
The reduction of operating costs (less routes, increased load factor, less mileage)
The increase of the level of customer service (in terms of relevant KPIs and time windows, reduction in transport costs)
More environmentally friendly urban distribution (reducing carbon footprint, traffic nuisance and noise)
Value added services (reverse logistics, recycling, etc.)
The main factors for a UCC to be viable include:
To offer high quality services at low cost
Manage large volumes (consolidation)
To ensure confidence among the customers of a UCC (in terms of synergies, personal data and information of customers)
To have the support of the public authorities (local authorities, sustainable models of public-private cooperation, etc.)

26. Conclusion and main challenges (2/2)
Obstacles for success
- Problematic location
- Lack of cooperation
- Type of goods / Vehicle Type
- Lack of funding
Success factors
- Use of environmentally friendly vehicles 
- Use of information systems / telematics
- Value Added Services
- Active and supportive role of public authorities

27. Thank you very much for your attention !