Parcel delivery in urban areas: Opportunities and threats for the mix of traditional and green business models

Abstract

In recent years, the role of freight transportation and parcel delivery in urban areas has increased, supporting the economic and social development of cities. At the same time, the industry is affected by various issues, inefficiencies, and externalities, particularly in the last-mile segment. As such, there is an emerging awareness of a need to improve urban mobility and transportation, making them more sustainable and competitive by mixing traditional and emerging technologies, such as cargo bikes, autonomous vehicles, and drones. In contrast, the complexity of the overall system, characterized by multiple actors with conflicting goals, requires a strategy that harmonizes these actors’ business and operational models. This study contributes in this direction along three axes. First, it defines the main actors involved in urban parcel delivery, and then analyzes their business models and the interactions between them. Second, it investigates the integration of traditional and green logistics (mainly cycle-logistics), from both business and operational perspectives, in order to identify synergies, conflicts, and the operational and economic consequences of adopting green vehicles. Third, it introduces a simulation-optimization decision support system tool capable of assessing mixed-fleet policies for the management of parcel delivery in urban areas. Finally, the decision support system is tested using real data of the city of Turin.