A Managerial Analysis of Urban Parcel Delivery: A Lean Business Approach

Luce Brotcorne,Qu Wei,Guido Perboli,Mariangela Rosano

doi:10.3390/su11123439

Abstract

The improper integration of traditional transportation modes with low emissions vehicles can generate a price war that reduces the service quality, undermining the efficiency and the profitability of parcel delivery operators. This paper aims to provide managerial insights to design a win-win strategy for the co-existence of traditional and green business models. In doing so, we adopt a multi-disciplinary approach that integrates a qualitative analysis through a Lean Business methodology, named GUEST, with a quantitative analysis based on simulation-optimisation techniques. This kind of holistic vision has received little attention in the literature. The first analysis investigates the parcel delivery industry with an emphasis on the main business models involved, their costs and revenues structures, while the quantitative part aims to simulate the system and extract sustainable policies. In particular, results highlight that in deploying mixed-fleet policies, the decision-makers have to focus both on the environmental sustainability that benefits from the adoption of low-emission vehicles, and on the operational feasibility and economic sustainability of the two services. In this direction, the paper suggests some managerial insights concerning the split of the customer demand between traditional and green operators, according to the classes of parcels and geographical areas of the city.

Highlights

Urban freight transportation and parcel delivery have been subjected to significant paradigm shifts over recent decades, caused by the urbanisation and development of megacities
To cope with the different issues of such a complex system, City Logistics and new domains, such as the Physical Internet, provide initiatives to optimise the flow of traffic and jointly address the economic, operative, social, and environmental sustainability of transportation and logistics, mitigating the inefficiencies and externalities that characterize the last-mile segment of the supply chain [7]
We show how the mix of qualitative and quantitative models can be conjugate the results of the business models and economic analyses proposed in this paper, with quantitative approaches based on Monte Carlo-based simulation-optimisation

Summary

Introduction

Urban freight transportation and parcel delivery have been subjected to significant paradigm shifts over recent decades, caused by the urbanisation and development of megacities. As [8,9] point out some City Logistics initiatives failed due to the lack of support and commitment from the different actors (with diverse expertise) in the urban areas. This gap is the result of the absence of a managerial view in the deployment of policies for sustainable freight transportation and logistics. Usually implementation and proposal are too focused on the technological aspects as platforms, or optimization tools, missing a global vision and the lack between the business and operational models. The authors in [10] developed a last-mile typology and an instrument to simulate the total last-mile costs

Objectives

Methods

Results

Conclusion