Critical factors for viable business models for urban consolidation centres

Abstract

Although urban consolidation centres (UCC) worldwide have improved urban freight distribution and reduced externalities, other UCC initiatives have not materialised due to problems such as for example, business model limitations. All the same, researchers have rarely described business model components relevant to city logistics. In response, the purpose of this article is to analyse critical factors for viable business models of city logistics initiatives involving UCCs. Following an extensive literature review and multiple-case study of five initiatives with UCCs, we identified seven critical factors of viable city logistics business models: the ability to scale up and down the UCC solution; an ability to continuously develop and adapt to a dynamic environment; the important entrepreneurial role of the initiator as well; the acknowledgment of society; ability to innovate new services; logistics and supply chain management competence; and the ability to take full advantage of advanced IT. All seven factors describe continuously redeveloped business models seeking to seize new and unexpected opportunities, yet also indicate that city logistics systems require local authorities and municipalities to act as initiators, enablers, and customers. The models also underscore differences between purely commercial and purely municipal city logistics initiatives.