An Evaluation of Urban Consolidation Centers Through Logistics Systems Analysis in Circumstances Where Companies have Equal Market Shares

Abstract

Urban goods distribution is crucial for the economic vitality of cities but at the same time it causes several problems with regard to traffic congestion and environment. This paper proposes a strategic solution combining cooperation between freight carriers through the use of a consolidation terminal to reduce operational costs, and consequently the negative impacts on the city. The current system without consolidation center is compared in terms of operational costs with a future system where a consolidation center is implemented. Continuous analysis is used to formulate a basic model to estimate costs and benefits. Finally, general results are discussed and a case study in L’Hospitalet de Llobregat (Metropolitan Area of Barcelona) is analyzed. Results are promising with a 12-14% of operational cost savings in a general case. From the case study we conclude that the commitment of the 40% of demand allows covering the costs of terminal implantation.