Urban consolidation centers and city toll schemes–Investigating the impact of city tolls on transshipment decisions

Abstract

Around the world, many cities are struggling with the negative effects of urban freight transport, such as congestion and emissions. To mitigate these negative effects, both innovative solutions, such as urban consolidation centers, and regulations, such as city toll schemes and delivery time windows, can be adopted. In this paper, we investigate the impact of city toll regulations on the vehicle routing and transshipment decisions of logistics service providers. We present a mixed-integer linear programming formulation and an adaptive large neighborhood search heuristic that address the interdependent decisions of vehicle routing and the use of urban consolidation centers, taking into account city toll schemes and time window constraints. In this context, we consider heterogeneous fleets, multiple trips per vehicle, and use a multigraph to address the trade-off between fastest and cheapest paths. We validate the adaptive large neighborhood search by comparing it with the mixed-integer linear programming model on test instances with up to 20 customers. To analyze how city toll schemes affect the cost attractiveness of urban consolidation centers and the fleet composition of logistics service providers, we conduct an extensive computational study featuring real-world instances that provide managerial insights for both local administrations and logistics service providers. Our results show that both per-day and per-entrance tolls can be used by local administrations to support the use of urban consolidation centers and that the number of truck entries into urban areas can be reduced. However, our results also indicate that due to the transshipment fee per unit load, the cost attractiveness of using urban consolidation centers is considerably lower for logistics service providers with larger delivery quantities per stop.