Context and relevance
Suppliers play a crucial role in the (un)sustainability of the last mile transport to campus Heijendaal, as it is their freight that is shipped to the campus customers. Often, they are the ones who organize the transport. Therefore, they can decide whether or not to use a city hub. In case they have their own fleet, they can also decide themselves on which vehicles are used. Furthermore, the SLA’s that they negotiated, especially delivery frequency and speed, have an impact on the (un)sustainability last mile transport. Therefore, understanding what factors influence the (un)sustainability of suppliers’ choices regarding last mile transport to the campus, is a crucial step in improving the sustainability of their choices. This summary gives an overview of one of those factors: the use of a city hub by suppliers. Note that other factors and stakeholders also influence the sustainability of last mile transport; they are covered in other parts of the living lab research.
Why do suppliers decide (not) to use the city hub for their transport to campus Heijendaal? In case they do not use the hub, under what circumstances would they reconsider their choice?
Interviews were held by representatives of the three campus institutions with suppliers. A question list was provided to the campus representatives by the research group KennisDC Logistiek. Seven suppliers were invited for these interviews and 6 of them participated. The interviews were held in June and July 2021.
Three of the six suppliers indicate that they want to invest in making their own fleet zero emission. The reason is that they already have their own distribution network, consisting of distribution centers (hubs) throughout the country and efficient routes to their customers. One of these three is willing to also use a UCC, next to making their own fleet more sustainable. Another supplier plans to keep using a 3PL and the hubs of this 3PL for their distribution. The plans of the remaining two suppliers remain unknown.
Reasons not to use the hub
- Cost increase, especially in case the supplier already has its own efficient distribution structure
- Longer delivery times due to additional stop
- Hub cannot provide additional services to customer
- Risks and responsibility issues
- No track and trace
- IT hub is not geared to IT supplier
- No national hub companies; suppliers need to make separate arrangements for every city, which is a burden
Factors that stimulate hub usage
- Force the use of hubs during tendering
- Use instruments like integrated reporting and true pricing, so that additional financial costs of a hub can be outweighed by additional environmental benefits
- Change pricing system. A price per collo is not attractive in case a supplier has many colli. An additional fee per address is not attractive in case addresses are next to each other.
- Increase usage and thereby volumes of hub by having more (large) customers
- Decrease the number of delivery days
- Standardize business processes and IT infrastructure (nationally)
- Deal with risk and responsibility issues
- ZES zones and regulations
Impacts on goals living lab
Emissions of vehicles to and on campus can decrease drastically when suppliers decide to use the hub. However, emissions on national level will only decrease in case suppliers can use the hub for many / most / all other customers in the hub area. Otherwise, they still have to enter the city for their other customers and have an additional stop at the hub, which could worst case even lead to an increase of emissions on a national level. Furthermore, if they need to go to the campus for service activities, the advantages of using the hub are also decreased.
The number of vehicles to and on campus can decrease drastically when suppliers decide to use the hub. This has a positive influence on livability.
Suppliers perceive costs to increase. Whether and under which circumstances this is true, is the topic of other research. But since perceptions guide behavior, costs form an important obstacle for using the hub. A pricing system that suits supplier needs is very much welcomed.
Service level is potentially impacted by the decreased delivery frequency and suppliers prefer to partly carry out service activities themselves.
Conclusions, policy recommendations and directions for future research
Suppliers are willing to make their distribution more sustainable. Using a hub would increase sustainability and livability (on campus), but a number of factors (costs, not matching business processes, lack of IT infrastructure and risk and responsibility issues) make this option less attractive. Dealing with those issues and forcing the use of a hub, would stimulate hub usage. In the meantime, however, some suppliers aim to make their own fleet more sustainable. To make sure that both zero emission transport and bundling are achieved, we therefore recommend purchasers to force the use of a hub during tendering.