Smart Logistics « Grid »(« Logistique Urbaine Mutualisée Durable »)

Urban Logistics and Sustainable Development

EEG2 / TBG3 Transport/Logistics UN/CEFACT meeting

PARIS 22-26 February 2010

2

Agenda

Urban freight transportation issues

Concept of the “smart logistic grid”

Benefits

Challenges

LUMD Project

Conclusion

3

Increase in population

densityIntensification of the

flow of goods in cities (internal,

external)Pressure to become more

cost-compeitive

Cleaner, less congested and

safer environment

Limited Infrastructure expansion

Transportation of goods becoming more difficult and

costly

A need to transform the way goods are delivered within cities, whether for retailers (small and large, business offices, services,…)

Freight « mobility » is becoming an urgent and critical challenge for large cities

4

How to move forward ?

Promote collaboration at all levels- Flow consolidation- Cross-modal transportation - Among customers, suppliers and all levels of government authorities

Leverage technology to better manage transport demand and supply

- « Intelligent » transportation solution (planning, real-time monitoring,…)- Comply with International standards for Electronic Exchanges

Manage « last-mile » freight delivery as an integrated service- Across transportation modes- Customer-centric, not resource centric

5

Agenda

Urban freight transportation issues

Concept of the “smart logistic grid”

Benefits

Challenges

LUMD Project

Conclusion

6

Concept : Optimize local deliveries through smart freight consolidation

Urban Area

Retailers

Shopping Centers

FactoriesBusinesses

End-Customers

Picking points

Urban AreaRetailers

Shopping Centers

Factories

Services

End Customers

PickingPoints

Today Tomorrow

Many Long-Distance Final Deliveries (trucks)(« Supply-Driven Supply Chain »)

Few Short-Distance Final Deliveries (multi-modal)(« Demand-driven Supply Chain »)

Urban FreightConsolidation Center

(UCC)

Warehouses

7

Level of consolidation : multi-product / multi-business / multi-modal

Multi-ProductFreight, non perishable products

Multi-ModalTrain, metro, electric vehicle, boats,…

Multi -Business Retailers,

Offices, Shops,…

RetailShop

Supplier Delivery

Supplier Delivery

Supplier Delivery

Waste

RetailShop

Supplier Delivery

Supplier Delivery

Supplier Delivery

UFCP*

*Urban Freight Consolidation Platform

8

Intelligent Freight SystemTransportation & Logistics Suppliers

Urban transports

Warehouses

Urban initiatives

Airport Hauliers

PortsCargo

terminal

Carriers

Logistics Market-Place

(B2B)

Freight Consolidation Management

Urban Logistics Regulator

Responsibility for organizing / monitoring the “last-mile”

Supply Chain (Smart “Logistic” Grid) at the city level

Real-time visibility on demand and capacity, yield management

Management of integrated services including storage, picking, packing, final transportation & deliveries for

specific market / product segments

An « E-Platform » providing high added value services

Businesses

Individual Retailers

Shopping Centers

Offices

End Customers

Outlets

9

Agenda

Concept

Benefits

Challenges

LUMD Project

Conclusion

10

Key Benefits

Environmental Benefits

PROVIDERS BUSINESSES

PEOPLE

Economical Benefits

Benefits to Retailers

11

Benefits to Retailers

Reduced on-site stockroom requirement- Increased sales- Reduced stock-out situations during peak periods

Delivery timing & flexibility- Multiple deliveries a day with appropriate « green »

vehicles- Greater range of items

Efficient logistics processes- Unpacking, sorting, labelling, invoicing,…- Returns (unsorting, repacking,…)

SALES (70%)

STORAGE (30 %)

SALES(90%)

(10 %)

Floorspace

12

Environmental Benefits

Reduced overall vehicle mileage- Fewer goods vehicle delivery movements all the

way to city centers

Reduced emissions- Fewer vehicle mileage- « Green » vehicles / alternative transportation

modes

Reduced congestion, noise,…

Improved safety

13

Economical Benefits through Consolidation

90% of trips are individual cars, for 25kg shopping basket, on an average

distance of 10km roundtrip

Complete trucks (20T), average

distance of 350 km

Manufacturer 1

Manufacturer 2

Distribution platform

Cost of transport in the upstream retail:5% of the value of the goods

(e.g. 4 € for an average basket of 80 €)

Cost of the “last mile” in retail: up to 30% of the value of the goods (€ 15 ** for an

average shopping basket of 80 euros and 25 Kg)

Outside Shopping Center

Home

Source : www.cyber.uhp-nancy.fr* Source : emarketing.fr : A complete home delivery service costs 20 to 34 euros but is rarely charged more than € 9.15** Home delivery service at Carrefour, Ooshop.

Deliveries in rounds, 3T per salespoint,

average distance of 75km

Downtown Retail Stores

14

Agenda

Concept

Benefits

Challenges

LUMD Project

Q & A

15

A number of interesting initatives have emerged, without however adressing the global issue of urban logistics :

Industrial distribution warehouses Pre consolidation

platforms

Peri urban infrastructures

UDC: Urban Distribution

Center

Picking points

Urban initiatives

Several cities (Monaco, Bordeaux, La Rochelle,

etc.) have a UDC and pre consolidation platforms

Monoprix develops freight through rapid transit rail system (« RER ») and fluvial to supply its

stores

La Petite Reine and Chronocity offer a service of

alternative delivery (bike, manual cart)

Consignity offers more than 10 baggage lockers places in

Paris, functionning as an advanced stocks for

tradesmen

Tradesmen

Urban area

Natoora, e-box and Chronopost offer logistic

spots in urban area

Peri urban area

Supermarkets

Industrials

ULSUrban Logistical

Spots

16

The key challenges ahead :

Start-Up Costs- Freight consolidation facilities- « Green » transportation

Financial viability- Flow consolidation opportunities

Information Technology- Marketplace, monitoring, yield mngt,…- Standards

Retailers participation

Transportation & logistics providers (carriers,…) participation

Public authority support :- Local / regional / national authority level - Regulations & Finance

17

The “LUMD” project addresses these key challenges :

Start-Up Costs- Freight consolidation facilities- Transportation capacities

Financial viability- Flow consolidation opportunities

Information Technology

Retailers participation

Transportation & logistics providers (carriers,…) participation

Public authority support :- Local / regional / national authority level

18

Agenda

Concept

Benefits

Challenges

LUMD Project

Conclusion

19

An innovative PPP (Public Private Partnership) sponsored by Advancity:

Business Technology

Research labs

Service providers

75

94

77

Stakeholders

20

An ambitious goal, but a progressive approach through prototyping and real-life experimentations :

21

Expected benefits for Ile de France

Lower the ratio kgCO2/tons or transported m3 by approximately 50%

Achieve 25% modal shift from road to other means

Improved by 30% filling trucks Reduce by 30% mileage

Freight

First census of urban logistics flows Powered continuously by the urban logistics integrator

Monitoring of urban logistics flows

Monitoring of urban logistics flows

Optimize the ratio kgCO2/surface or storaged m3

Improve storage management by 15%

Logistic spaces

Reduce disturbances including noise Improve proximity services through

transport (+10% over 5 years) Rehabilitate proximity shopping

Services and quality of life

22

Agenda

Concept

Benefits

Challenges

LUMD Project

Conclusion

23

The Smart Logistics” Grid” is more than implementing technologies

Vision of how to transform the last-mile logistics

Collaboration between all key partners of the Supply Chain - Suppliers, Customers- Transportation & Logistics Providers (all modes) - All levels of government authorities

Apply innovative business model- Urban freight consolidation center- Dynamic Pricing- Integrated services - Use International standards for interoperability

Address complexity of implementation