Freight Traffic Control 2050: transforming the energy demands of last-mile urban freight through collaborative logistics

CONTEXT OF THE RESEARCH: Freight transport accounts for 16% of all motorised road vehicle activity in British towns and cities and is therefore a major consumer of fossil fuels and contributor to CO2 and air pollution. In London, road freight transport accounts for 23%, 36% and 39% of total road-based CO2, NOx and PM10 emissions respectively. Van traffic is forecast to grow strongly as a result of:
1) Growing demand for new ways of buying goods and fulfilling deliveries including online shopping.
2) Expanding urban populations through greater levels of urbanisation and migration patterns.
3) Urban de-industrialisation and the rise of the service-based economy.
4) Increasing demand for outsourced servicing functions such as the provision of utilities and construction.
5) Logistics sprawl, with warehouses relocated to the edge of the urban area result in longer journeys.

Unlike many other sectors, the freight industry has few barriers to new entrants and is a highly competitive marketplace characterised by low-profit margins and a proliferation of operators. Due to the fierce competition that exists, these carriers traditionally operate in isolation of each other with poor vehicle utilisation rates and delivery rounds that overlap, leading to increased traffic congestion, pollution and demands for energy.
Aims and Objectives: Our research vision is to understand the extent to which closer operational collaboration between parcel carriers offers the potential to reduce urban traffic and energy demand whilst still maintaining customer service levels, and to what extent such relationships can develop naturally within a commercial setting or whether a 3rd party 'Freight Traffic Controller' (FTC) would be instrumental to ensure the equitable distribution of demand across an urban area. Our key research objectives are to:
1. Investigate the collective transport and energy impacts of current parcel carrier activities;
2. Create a database to gather and interrogate collection and delivery schedules supplied by different carriers;
3. Use the data with a series of optimisation algorithms to investigate the potential transport and energy benefits if carriers were to share deliveries and collections more equitably between them and develop tools to help visualise those benefits;
4. Evaluate what business models would be needed to enable carriers to collaborate in this way;
5. Investigate the role a 3rd party 'Freight Traffic Controller' could play in stimulating collaboration between carriers to reduce energy demand and vehicle impacts across a city;
6. Identify the key legal and privacy issues associated with the receipt, processing and visualisation of such collaborative schedules.
POTENTIAL APPLICATIONS AND BENEFITS: Our research outcomes will be trialled by TNT and Gnewt Cargo as part of the project and will provide them and other carriers with evidence of the tangible benefits from adopting collaborative collection and delivery schedule management for better utilising their vehicles in urban centres. Should the business models prove successful, they will be transferable to other important sectors of urban freight transport (e.g. construction, waste, food and service-based logistics). We will also provide policy insight to Transport for London and other urban planning authorities into the merits of the FTC concept for controlling freight vehicles entering their urban centres and aiding their directive of introducing CO2 free city logistics by 2030. System designers looking to commercially develop the FTC concept will benefit from our approaches for integrating, modelling and visualising vast data sets for collaborative decision support, and how to navigate the commercial and privacy issues associated with handling multi-client data. The Operational Research community will benefit from the optimisation and gaming models as they will give a new insight into how such tools can be effectively used with very large data sets.

Who will benefit from the project?

Those who will immediately benefit from the work are the courier and parcel service providers who are segregated into: i) National Post (where licensed operators include TNT Post, UK Mail, and Secured Mail) ii) Courier Service Providers (catering for the same-day delivery market) iii) Express Delivery (carriers who provide premium time-sensitive services such as next-day guaranteed delivery e.g. DHL Express, Fedex Express) iv) Parcel Delivery (carriers providing a non-premium delivery service, primarily for the B2C e.g. Hermes, Yodel, DPD) v) Lifestyle Couriers a who are self-employed owner-drivers who work on a freelance basis mainly for parcel carriers. Other major beneficiaries will be Local Authority freight planners and traffic control centre managers attempting to manage the flow of freight vehicles through their urban centres; traffic management system designers and logistics optimisation software developers; academics and the general public.

How will they benefit from the project?

Couriers - TNT and Gnewt Cargo will both trial the collaborative schedule optimiser being developed across their collective customer base which includes DX and Hermes. Key economic benefits are anticipated to arise from i) the ability to better apportion work to vehicles working in specific condensed zones (potentially only covering a few streets) to reduce drive and parking bay search times ii) the improved fill rate of vehicles associated with allocating work to zones iii) identifying and consolidating clients who have the ability to receive items out-of-hours to take advantage of less congested periods. Based on previous work optimising van servicing rounds for a major UK charity, the investigators estimate that the transport savings achievable from collaborative scheduling could range between 5 and 20%.

Local Authorities - will benefit from the first 'Freight Traffic Control' (FTC) demonstrator which will enable them to evaluate the benefits of adopting a 3rd party managed freight scheduling service for their urban centres. Cities (specifically London), will benefit from any consequent reductions in congestion which was estimated to cost the capital approximately £5.4bn in 2013 with a 10% reduction likely to be worth £500m to the economy.
System designers and software developers - looking to commercially develop the FTC concept and collaborative schedule optimiser will benefit from our approaches for integrating, modelling and visualising vast data sets for collaborative decision support, and how to navigate the commercial and privacy issues associated with handling multi-client data.

Academics - Will be able to gain from the advance knowledge of how to develop and use powerful metaheuristic algorithms to solve the routing and scheduling problem on a mega scale, involving significant and complex datasets from multiple clients. They will also gain insight into what gaming strategies and trust models are most appropriate to realise collaborative business operations between competing companies and an appreciation of the key legal and privacy issues associated with the receipt, processing and visualisation of such information.

The general public - will also benefit from the project through the reduction in road freight activity that collaborative scheduling will realise in urban areas (reducing overall traffic levels, fossil-fuel consumption, greenhouse gas emissions, noise, visual intrusion whilst improving local air quality and road safety). The novel visualisations created will also aid their understanding on how their purchasing behaviours lead to unsustainable delivery activity.