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Disrupting Logistics in Smart Cities and Regions through an Advanced Logistics Platform.

Periodic Reporting for period 1 - LOOP (Disrupting Logistics in Smart Cities and Regions through an Advanced Logistics Platform.)

Reporting period: 2016-09-01 to 2017-02-28

EU cities are becoming increasingly crowded. Currently, 73% of European Union (EU) citizens live in cities and that number is expected to rise to 82% by 20501. The high population density within urban environments brings about specific problems and issues that need to be addressed by local municipal authorities. Moreover, planning activities are very restricted to the development countries mainly, and the urban planning till now neglects urban logistics , resulting in an increasing gap of urban systems adaptation and cost and service level.
Cities are faced with high levels of air and noise pollution, traffic congestion, and road accidents. Furthermore, as urban population numbers rise, so does the demand for the delivery of goods within city limits. At the same time, a new consumer trend is being observed in the developed world with eCommerce rapidly expanding in Europe and abroad, and predicted to continue to grow in the years to come. In 2015, B2C eCommerce turnover in the EU corresponded to 407.4 bn€ and it was estimated that, in the same year, 4.2 billion parcels were sent as a result of eCommerce in Europe.
On the opposite hand, EU legislation is moving towards severe reductions in vehicle numbers inside cities. In 2011, the European Commission reported that about one quarter of all CO2 transport emissions was directly attributed to urban transport and 69% of all road accidents happened in cities. Additionally, congestion contributes to inefficient urban logistics operations and increased costs, which has a negative impact on urban economy. On the other hand, the international community is increasingly aware of the need to drastically reduce world greenhouse gas (GHG) emissions in an attempt to control climate change alterations. In this context, the EU has agreed to reduce its GHG emissions, by 2050, by 80-95% compared to 1990 levels, and this implies a reduction of 60% from the transport sector. Considerable attention has been given to urban freight transport as it contributes disproportionally to GHG emissions, being responsible for 6% of all emissions related to transport. Thus small changes in urban logistics can lead to drastic contributions towards the development of more sustainable transport models and economy development (more than 80% of GDP is generated in cities). To that end, the European Commission set out the ambitious goal of achieving CO2-free urban logistics by 2030, increasing the efficiency and lowering the impact of urban logistics, diminishing urban congestion, and employing cleaner vehicles. Consequently, urban logistics are not only subjected to unprecedented stress, but are also in need of smart solutions to provide current or better levels of service without increasing traffic congestion and pollution in our cities; the way we approach urban transport needs to be revisited and the goal is to find more efficient and sustainable models for transport.
The future of urban logistics needs a multi-operator, multi-stakeholder platform, which can maximize the quality of service without compromising urban mobility or the quality of life of citizens. We think that platform will be LOOP. LOOP federates Logistic Service Providers (LSP), therefore disrupting the market through a new business model (as Uber has done for the taxi market). LOOP optimizes fleet usage and routing, through the aggregation of orders/consignments and vehicle fleets, regardless of the supplier, LSP or end-costumer, maximizing fleet and infrastructure capability. Additionally, with LOOP urban logistics regulators can intervene directly in the operational rules of the system. LOOP delivers a service through a digital platform that integrates and manages order information and physical infrastructures. Through LOOP, urban logistics can be planned dynamically, in a multi-operator environment, where flows are optimized by aggregations, resulting in a reduction of the number of vehicles and street saturation, ensuring adequate levels of service and taking into account real-time changes.
We began by doing a Technological Feasibility Study, assessing the feasibility of implementing LOOP in different sized cities and studied the adaptation of our solutions to specific policy constraints and harmonize urban logistics operator integration. We have also selected 5 candidates to pilot cities for a Phase 2 SME Instrument project.
We also did a detailed market assessment to define the ideal type of cities and regions that can implement LOOP and cluster them in market segments, and have interviewed several municipalities and LSP in different EU countries.
Based on our market assessment we developed 2 business models that have been fine-tuned according to our interviews and defined market segments.
We conducted a risk assessment including likelihood, impact and contingency plans for a Phase 2 project and also a IP Assessment, including a Patent Landscape study and Freedom to Operate.
Finnaly, we have developed a Work Plan for a Phase 2 project, including Gantt chart, work packages, deliverables, milestones and staff effort estimations.
LOOP is a game changer innovation in urban logistics, as it opens market space for local or smaller LSPs to provide services to a specific city and this can be an enabler for last-mile electric vehicle solutions when the regulators demand it, as large LSPs can leave the final delivery to local LSPs that have adapted to local constraints. With LOOP, last mile logistics becomes brand-agnostic, combining efficiency with local resources and legislation.
In addition, LOOP will integrate the optimized urban logistic service with a complimentary tolled free movement in restricted areas, that responds to special logistic requirements, like non-frequent deliveries, or time to manage change of actor behaviour for instance. The amount of free movement vehicles will be under management in order to comply with city council requirements for livability of the city, and the total amount of toll collected will contribute to finance the whole system.
One of the most important impacts of LOOP is on the environment. The expected results of LOOP are the reduction of logistic vehicles circulating through the city, better adapted vehicles (different from city to city) in size and GHG, noise and safety. Also, because routes are designed to use cycling and also pedestrian deliveries, both mobilizing professional and even some voluntary work and participation if promoted by the local politics.