Emerging countries, cities and logistics

City logistics in emerging countries (like South America, India, China, etc.) is more challenging and of higher complexity than doing city distribution in Western regions (like Europe or North America).

This is not my statement but expressed by dr. Edgar Blanco from the MIT Center for Transportation and Logistics. Obviously, as a good academic, he also motivates this statement. In a nutshell, there are a number of reasons, all interacting with each other. The key reason is that the important logistical dimensions are completely different than what we are used to. Specifically, stores are much smaller (think of the size of a garage or smaller), there are really, really a lot of these stores. Added to this, the cities themselves are huge, at least in density (i.e. inhabitants per square meter) with the well-known problems related to congestion, emissions, etc. On top of this, due to a lack of trust in the chain, giving credit is not done, leading to a purely cash-driven supply chain.

Interesting, no? So how different is this to city distribution in the Netherlands or Belgium? I participate as professor Freight Transport and Logistics in the Dinalog funded project 4C4D (Cross Chain Control Centers for City Distribution). In this project, we look into coordination and consolidation in order to improve logistics flows into cities. Here, issues like retail ordering, sustainability (green zones), congestion, time windows, etc. are driving logistics’ efficiency. The focus of this research project is on Logistics Service Providers and retailers, leading to innovative distribution concepts based on sound business models, while meeting objectives and restrictions set by municipalities.

I wonder whether all these nice new innovative distribution concepts would survive in the city of Bogota. It seems that we in Europe and the US are used to a large amount of structure, data availability, and well-followed rules and legislation. Once, we take this out of the picture, the challenge is, next to new concepts, to find ways to set up a structure and the right information. So I would conclude, that city logistics in emerging countries is really harder but leads to richer business models than we are traditionally used to.

Tom Van Woensel, Professor at Eindhoven University of Technology, Faculty of Industrial Engineering and Innovation Sciences and Board Member of the European Supply Chain Forum.