Freight Distribution in Urban Areas: The role of supply chain alliances in addressing the challenge of traffic congestion for city logistics

The distribution of freight is a major contributor to the levels of traffic congestion in cities, yet it is much neglected in the research and planning activities of government, where the focus is disproportionately on passenger vehicle movements. Despite the recent recognition of the contribution of freight transportation to the performance of urban areas under the rubric of city logistics, we see a void in the study of how the stakeholders in the supply chain associated with the distribution of goods (whose destination is an urban location) might cooperate through participation in distribution networks, to reduce the costs associated with traffic congestion. Given that transport costs are typically over 45% of all distribution costs, with congestion contributing a substantial amount of cost in the urban setting, the importance of establishing ways in which supply chain partnerships might aid in reducing the levels of freight vehicle movements in urban areas has much merit. This paper sets out a framework to investigate how agents in the supply chain might interact more effectively to reduce their costs of urban freight distribution. We propose an interactive agency choice method as a way of formalising a framework for studying the preferences of participants in the supply chain to support specific policy initiatives. Such a framework is a powerful way of investigating the behavioural response of each agent to many policies including congestion pricing as a way of improving the efficient flow of traffic in cities.