Figure 4: Disconnect between end receiver and carrier, Verlinde et al., [50]
There have been several examples of interventions to adopt a new approach to the inbound logistics of large and small institutions. Smaller independent retailer schemes have tended to fail due to the lack of core focus from small shopkeepers and the difficulties inherent in coordinating large groups of disparate SMEs. Focus has tended to be on large institutions such as councils, universities, and hospitals. Such examples include the ongoing Southampton NHS and Council consolidation schemes run by Meachers Logistics with subsidy/funding [65], inbound consolidation at Newcastle University 2011-2016 [66,67], the London Borough Consolidation Centre scheme [68] and the Municipal co-distribution scheme in Sweden [69,70].
In all cases, there have been teething problems with this approach. Early hopes that the suppliers would pass on the last mile savings, which have been estimated as circa €7 per cubic metre [71], did not realise. This may be because most suppliers have no visibility of the cost structure inside their external or internal logistics providers operations. All such schemes have thus been funded primarily by subsidy and then by the receiving organisation. As Verlinde et al. [59] state: “that appears to be a problem as the bare fact that the number of freight vehicles entering the city is reduced does not yield a financial profit. At the most, it leads to a more pleasant [...] climate for [...] customers and fewer interruptions by carriers delivering something. That is why concepts oriented towards the receiver would also have to be advantageous to them in other ways to receive bottom-up support”.
Whilst potentially some congestion, intrusion, $ CO_{2}e $, and emission reductions can be shown from such UCCs [66], and the mandatory nature of purchasing contracts is very strong, the receiver organisation has to foot the bill for the UCC. For Newcastle University, the projected cost of £100,000 plus per annum, combined with the departure of the Vice-Chancellor that championed this cause, meant the scheme was not considered attractive by the University and it was dropped. It appears the LBCC scheme may have gone the same way, but after the contraction of the TfL freight team, the project has been less well documented.
A key success here has been the Swedish Municipal co-distribution model. This has been based on the "The Good City" [72] project developed by Trafikverket and illustrated below in Figure 5. A conceptual framework was developed, to overcome traffic congestion and accessibility problems in the Central Business District (CBD) of the larger cities. This explicitly separates logistics prices from goods tendered to local authorities, essentially 'ex-works' pricing and the logistics operation to collect, consolidate and deliver last mile goods is handled by contracts tendered by municipalities. The business model for co-distribution of goods evolved and in 2011 became conceptually integrated with the official Swedish SFTI (Single Face to Industry) standard for e-commerce, commissioned by government agencies and coordinated by the Swedish Association of Local Authorities and Regions. [58]
Page 10