With e-commerce growing in popularity, the number of parcel deliveries increases, which leads to dense traffic situation in cities and urban areas. Furthermore, urban freight transportation is a contributor to global warming, as the transport and logistics sector accounts for 5.5% of total emissions resulting from human activity [
1]. Negative externalities arise, such as traffic congestion, air pollution, noise, reduced safety, occupation of parking space and double parking on cycling infrastructure. These externalities in combination with climate goals that have to be met, motivate local authorities to implement innovative and sustainable city logistics systems.
1.1. Motivation and Goals
To overcome the challenge of reconciling the increasing demand of e-commerce as well as the environmental targets, many logistics service providers have started to act by collaborating and adopting environmentally friendly light vehicles such as cargo bikes. A smaller number and size of vehicles makes it possible to cope with the existing infrastructure in cities [
2]. Cargo bikes are more adjusted to city traffic and are able to use bicycle lanes and avoid traffic congestion, thus allowing for a quicker movement through the city [
3]. Additionally, deliveries with cargo bikes do not only help reduce CO
-emissions, but also result in less noise pollution, and the feeling of safety is improved as there is less traffic [
4]. However, due to their comparatively low driving range and capacity, city hubs close to receivers are needed as enabling infrastructure for the transshipment from conventional vehicles to cargo bikes [
5]. In a so-called two-stage distribution system, the parcels are delivered to a city hub from a regional distribution center and are afterwards distributed to the customers within the city.
In this paper, we analyze the option to implement such a logistic system with a city hub and cargo bikes for Innsbruck, Austria. Innsbruck is a small- to medium-sized city located in the alps next to the Inn river with an area of 104.9 square kilometers [
6]. The population of Innsbruck is approximately 130,000 [
7], of which 20- to 30-year-olds make up the largest share. According to [
8], 80% of the online shoppers in Austria are 16 to 34 years old. Hence, Innsbruck is a city with a relatively high delivery volume for B2C parcel deliveries. However, Innsbruck’s geographic area poses a particular challenge for urban freight, as its topographical location leads to increased traffic congestion due to the overlapping of the various freight traffic flows without alternative routes. Furthermore, in Innsbruck’s pedestrian zones, which encompass an area of 1.34 km
and over 6000 residents, vans are generally only allowed to drive and stop from 06:00 am to 10:30 am for the purpose of carrying out loading activities. New concepts are therefore needed to handle local freight traffic in a more resource-efficient way by using light vehicles and cooperation models.
The goal of this paper is to design a sustainable two-stage distribution system for the city of Innsbruck and evaluate it in terms of costs and resulting CO-emissions. Three research questions are addressed: (1) Where should a city hub be located to reduce the costs of the two-stage distribution system in Innsbruck? (2) What is the best composition of vehicles for the first and the second stage? (3) How much cost and emissions can be saved by designing an effective city logistics system in comparison to the conventional delivery? Furthermore, the model has to comprise limited vehicle capacity, time windows and service time at the customers’ locations, as well as service time needed to load the parcels onto the vehicle at the depot. Moreover, working hours of drivers have to be respected and a mandatory lunch break has to be ensured.
1.2. Related Literature
This paper belongs to the area of transport optimization in city logistics. City logistics describes the efficient and effective distribution and transportation of goods in an urban area, considering different factors such as congestion, traffic, sustainability, emissions and customer convenience [
9]. It addresses the logistics activities carried out in the last stage of the supply chain, the so-called last mile, in the urban environment [
10]. The focus lies in optimizing these transportation activities through consolidation and coordination (see [
11]). Approaches such as implementing a two-stage distribution system with a city hub are common examples of modern city logistics systems (see [
12]).
A city hub acts as a transshipment point for goods (see [
13,
14]) and is used to sort and consolidate the dropped-off goods and store them until they are picked-up by carriers for the final distribution. In this way distribution inside a city or a city center is separated from the transportation outside the city [
15]. Two-stage distribution systems with a city hub are more successful in small- to medium-sized cities comprising one hub zone that is small and close to the outskirts of the city (see [
16]). For example, in Lucca, Italy, which has 87,000 inhabitants, a one-hub system to deliver to the city center has been tested and significant potential savings are reported [
17]. Also, in Porto, Portugal, a city with 214,000 inhabitants, delivery with cargo bikes and one city hub is beneficial, according to [
18]. However, the location of the city hub is of great importance for the success and profitability of the city logistics system, as it must be close to the urban center. By optimizing the location of warehouses or city hubs, and efficiently routing the vehicles through the city, costs and emissions can be reduced. A successfully running one-hub system is in use in Maastricht in the Netherlands, which has a population of 122,000 [
19].
City hubs are often used in combination with cargo bikes for last mile delivery. The advantages of using cargo bikes as a sustainable transportation mode in urban freight distribution are numerous. The small size of the cargo bikes increases the flexibility of the vehicles in the city in general [
20]. Their agility allows them to react to urgent route changes or local traffic congestion, thereby saving time and money. This is accompanied by the ability to stop the cargo bike almost everywhere and to park it on the sidewalk, thus exempting them from searching a parking space [
21]. The reduced service time due to the parking ability closer to the customers, is a main advantage of cargo bikes, decreasing the overall delivery time and cost [
22]. Hence, cargo bikes are the better choice in the right setting, i.e., in congested cities, or those with limited parking spaces. They are the most cost effective for urban areas with a high density of residential units and low delivery volumes per stop. Around half of the commercial trips in cities can be performed by cargo bikes without delaying the delivery by more than 2 to 10 min, compared to vans Ref. [
23]. Furthermore, being less affected by traffic and parking constraints, cargo bikes allow a more precise travel time calculation, increasing the accuracy of delivery time prediction [
24].
Considering a two-stage distribution system with a city hub and cargo bikes can lead to substantial decrease in CO
-emissions. In Ref. [
25], the authors estimated the emissions of a two-stage distribution system to around 62% and 81% of those of the basic distribution system without a hub. In Lucca, Italy, an estimate of average yearly savings of about 50 tCO
when implementing a city hub with light electric vehicles considering a well-to-wheel approach were reported Ref. [
17]. In Ref. [
22], the authors compared the emissions of cargo bikes against conventional vans and reported reduced emissions of up to 66%, when using a truck for the first stage. In Copenhagen, Denmark, the environmental and financial performance of a city hub was monitored, while evaluating the potential environmental benefits Ref. [
26]. The authors report emissions savings of 68% up to 72% when replacing the previously used delivery trucks with fossil-fueled light truck. This is achieved by reducing the number of vehicles in total (by 61%) and at the same time the total distance driven (by 67%).
This paper is also closely related to the field of vehicle routing problems (VRP). The classical VRP aims at finding the optimal routes for a fleet of vehicles serving a set of spatially distributed customers while minimizing total travel costs (see [
13,
27]). Vehicles are assigned to one depot, which is the start and ending point of their tours. All customers must be served by a vehicle while respecting operational constraints. The VRP extension used in city logistics is the two-echelon vehicle routing problem (2E-VRP). This model represents the two-stage distribution system, where the goods are first delivered from the regional distribution center (RDC) to the city hub, and separately distributed from the city hub to the end customers [
28]. The 2E-VRP aims at determining the size of the vehicle fleets and the routes in both echelons that minimize the costs. In Ref. [
29], a problem was considered where the location of the city hub facilities is known but the location of the satellite facilities, as well as the number of vehicles on each level and their routes need to be determined. The purpose of the paper was to develop an efficient algorithm for the 2E-VRP. A detailed analysis of two-echelon systems and the impact of parameters on total cost was studied in [
30]. In this paper different locations of the depot, the satellites, the impact of customer locations and the number of satellites was investigated. The authors concluded that the 2E-VRP performs better compared to classical distribution, i.e., the solution of a vehicle routing problem, when the depot is located externally with respect to the customer area. The 2E-VRP is in general useful in city logistics where the RDC is not close to the delivery area and a city hub is implemented to keep the heavy vehicles outside the inner city (see [
29,
31]). Another extension of the VRP is the VRP with multiple trips [
32]. In Ref. [
33], a multi-trip vehicle routing problem with time windows and release dates was introduced. This variation of the VRP addresses a city logistics system with a hub and last mile delivery where vehicles perform several trips per day because of the limited capacity and fleet size. Further, the availability date of the parcels at the depot is variable and defined with a release date per customer demand. In Ref. [
22], a problem was considered where cargo bikes are allowed to return to the depot to renew their load.
The remainder of the paper is organized as follows: First, the two-stage distribution system is introduced, covering the methodology and problem description, as well as the mathematical model that forms the basis of the subsequent analysis. Thereafter follows the numerical analysis, divided into data description and presentation of results. In
Section 4 the results are discussed and contextualized, followed by a conclusion.