Comparison of Urban Cooperative Delivery and Direct Delivery Strategies

Abstract

Urban cooperative delivery is a truck demand management strategy that can significantly reduce urban congestion and emissions by consolidating deliveries of goods at a facility outside urban areas. Although the economy of scale from load and route consolidations could bring companies improvement of service range and routes, such benefits depend on the additional terminal operation costs. This study evaluated the effectiveness of urban cooperative delivery strategy in terms of the monetary cost by comparing the total logistics cost under several settings defined by a number of key factors of interest (e.g., customer density, demand quantity, facility location, and vehicle type). The use of the continuous approximation method was extended to modeling the urban cooperative delivery problem. The results demonstrated that there was no one-size-fits-all solution to the problem. The study evaluated the circumstances under which the urban cooperative strategies were favorable and unfavorable. The study findings provide theoretical insights to the effectiveness of urban cooperative delivery strategies, in contrast to the case study approach most commonly seen in the literature.