City Challenge

Urbanisation may not be a new phenomenon, but it is quickly becoming a global mega-trend. Unrivalled access to the job market, new technologies and everyday amenities is encouraging more people to flock to cities than ever before in history, according to the Organisation for Economic Cooperation and Development (OECD), which also found that increased urban density can encourage collaboration and fast-track progress in every area of life.

“While innovation can happen anywhere, it tends to be concentrated in highly urbanised areas,” the Organisation said in a recent report*. “Cities are [now] the main centres for research and development activities, patent applications and venture capital.”

But, while urbanisation plays an important role in fostering innovation and improving the lifestyles of city residents, it also brings with it a momentous logistical challenge: As more and more people demand space to live and work, housing construction and delivery traffic increase, too. Combining a number of the most pressing industry issues – such as road access, increasing congestion, tightening emission regulations and the rise of e-commerce – urbanisation is thus forcing the transport community to fundamentally rethink the concept of metropolitan logistics.

E-commerce is arguably the most prominent driver of the inner-city logistics revolution. For many a city dweller, grocery, meal and parcel deliveries to the doorstep are now expected as a standard, meaning more people want access to more things at a higher speed than ever before. Responding to the boom, leading freight companies have been forced to create e-commerce-specific strategies that require heavy investments in bespoke depots, hubs and the latest technology.

DHL Express, for example, has announced that its ‘final mile’ strategy for North America will be under scrutiny in 2017. “We will continue to keep our focus on the last mile, leveraging technologies and solutions that provide added convenience for customers,” says Mike Parra, CEO, DHL Express Americas.

Targeting the US as a major e-commerce market, the company has earmarked US$137 million (€123.8 million) until the end of 2020 to add eight e-commerce Distribution Centres (DC) to its portfolio and enhance two existing facilities in Los Angeles and Columbus, Ohio.

“There is barely any other industry that provides such a promising outlook than the e-commerce business. It is expected that one billion people will shop online and across borders by 2020 with the US being the most popular origin for 25 per cent of consumers worldwide,” explains Charles Brewer, CEO DHL e-commerce. “With our investments, we lay the foundation to expand our leading role in cross-border e-commerce logistics, serve our US customers with the best possible infrastructure and solutions, and gain future market shares.”

Following in the global juggernaut’s footsteps, fleets the world over are increasingly investing in light- and medium-duty vehicles with the manoeuvrability required to travel narrow city streets – particularly in European cities, many of which were not designed with heavy vehicle access in mind.

Data from the European Automobile Manufacturers Association (ACEA) reveals double-digit growth in medium commercial vehicles sales for 2016, with new registrations growing 11 per cent on the year before. But the trend is visible outside of Europe, too.

December figures from US data specialist, ACT Research, show that medium-duty (MD) orders over the past two years remained consistent in a way that “is almost unheard of”, with little change expected for the year ahead. “Given that consumer-related MD economic drivers remain largely unchanged, our expectations are for more of the same in terms of MD demand in 2017,” says Kenny Vieth, ACT Research President and Senior Analyst.

Vieth’s findings are mirrored on the other side of the globe in Australia, where the Australian Road Transport Suppliers’ Association (ARTSA) uncovered a similar trend after tracking the country’s commercial vehicle sales data for the last three years. “It has become obvious that the market is shifting towards more versatile equipment for urban use – arguably because the urban freight task is growing faster than the line-haul equivalent,” explains ARTSA CEO, Robert Perkins. “While we can’t predict the future, it seems obvious that new logistical challenges and urbanisation are changing the very fabric of the heavy vehicle market as we know it.”

As such, the design of the rigid body is increasingly being put under the microscope – be it in Australia, the US, or Europe. In France, local OEM Lamberet and Renault Trucks have jointly reconfigured the cab, chassis and refrigerated body of a 19-tonne rigid truck, for example, to showcase just how strongly urbanisation will impact the next commercial vehicle generation.

The ‘Urban lab 2’ prototype takes on the recommendations of aerodynamic specialists while still meeting current regulatory and operating requirements for controlled-temperature transport in Europe.

Accounting for the omnipresent congestion dilemma, Renault even brought geographic software expert BeNomad on board to develop a special navigation software that is connected directly to traffic infrastructure. According to Renault, it will be able to optimise driving through green lights by calculating if it is more efficient to brake or accelerate. It also proposes the route that is the most efficient and uses the least fuel – estimating both the predicted journey time and fuel consumption.

“The software has been configured to take not only fuel consumption into account, but also, and above all, the operational constraints of a distribution vehicle,” Renault says – indicating just how crucial it will be to integrate hard- and software to manage the global urban logistics challenge.

Rigid trucks are not always the solution, though. Small parcel freight operators are often encouraged to use larger vehicles to reduce the number of vehicles on the street, even though smaller vehicles are easier to manoeuvre into the tightest of access point. Part of the answer could lie in the ‘city trailer’, a recent style of articulated trailer that bears the benefits of both options – it can fit more cargo than a rigid vehicle, but boasts much-improved handling thanks to the inclusion of steer axles at the front.

And it seems many a European trailer builder agrees: Germany’s Schmitz Cargobull and Krone, French OEMs Lamberet, Chereau, Trouillet and Fruehauf, as well as Spain’s Lecitrailer have all investigated the ‘city trailer’ trend and brought their own versions to market. Lamberet’s SR2 X-City trailer, for example, can fit 33 pallets – that’s an increase of more than 35 per cent over its largest rigid model’s 24-pallet capacity.

Most city trailer models are refrigerated and feature electric-powered fridge units and quiet-running aluminium floors – both necessary to stay within acceptable noise limits (see breakout box) for city use. Yet, as the laws restricting vehicle size tighten and congestion increases, industry thought-leaders are going one step further and questioning the very concept of road-based freight movement.

Drone technology is arguably the most advanced ‘out of the box’ alternative for last mile deliveries: The first ever pizza delivery by drone took place in New Zealand last November, with pizza chain Domino’s flying the fresh cargo 25km from the store to the client’s doorstep. In the US, some 77 deliveries were carried out by drones in December, albeit only for lightweight freight and over short distances.

In a move to tie the drone delivery experiment back into the conventional road transport model, Mercedes-Benz recently integrated a drone docking/recharging facility into its new ‘Vision Van’ concept vehicle. Effectively using the van as a mobile distribution point, the drones can carry out the ‘very last mile’ from the centrally parked vehicle – in a location that could be chosen based on live traffic data.

“The Vision Van merges numerous innovative technologies and serves as the central, intelligent element in a fully connected delivery chain,” explains Volker Mornhinweg, Head of Mercedes-Benz Vans. “The introduction of the van as a mobile hub widens the operational radius of the robots significantly, while also rendering superfluous the cost-intensive construction and operation of decentralised warehouses. At the same time, we make the delivery process much more convenient for the end customer.

“With the Vision Van we are integrating the intelligence of a state-of-the-art logistics depot into a van. We estimate that this vehicle would enable an increase in productivity of up to 50 per cent in last-mile delivery services.”
While it’s still early days for drones in commercial transport, Mercedes-Benz has shown that their integration into trailers or truck bodies may be one future solution to cater to the urbanisation trend – effectively making them mobile warehouses.

But urbanisation won’t wait for the two to come together, with the OECD’s Metropolitan Century report putting the onus back on infrastructure planners to build cities that are better suited to the compounding urban freight task. In some regions, that means the innovation pressure is on town planners now, not the transport industry: “While in most of Europe and Northern America the largest part of urbanisation has already taken place and is embodied in city forms and infrastructure, developing and emerging countries currently have an unprecedented opportunity to shape their urban futures.”

*Sources: Organisation for Economic Co-operation and Development (OECD), The Metropolitan Century: Understanding Urbanisation and its Consequences, Paris 2015; Stichting Piek-Keur,  Methods of Measurement for Peak Noise During Loading and Unloading, Amsterdam 2015.

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