28 October 2022

Principles for Preparing City Logistics Plans

This article is part of a three-part article series which aims to provide an over-view on 1) principles for preparing City Logistics Plans (CLP), 2) institutional set-up for developing CLP and 3) measures which cities can undertake for improving efficiency of city logistics. This is the first in the series which shares an information on principles for preparing City Logistics Plans.

On 17^th September 2022, Prime Minister Sh. Narendra Modi launched the National Logistics Policy ^[1] for India with a vision to reduce the cost of logistics and improve India’s logistics performance index ranking. A Comprehensive Logistics Action Plan (CLAP) of eight points has been developed to implement the policy. One of the key steps which the policy proposes to undertake is to provide support for development of city level logistics plans, set-up an institutional framework and measure & monitor actions.

A cost-efficient logistics ecosystem is essential for cities’ economies and quality of life of its citizens. However, currently grapples with multiple negative externalities such as pollution, costs/inefficiencies, accidents and congestions. For e.g.

the last-mile vehicular movement in cities accounts for 50% of total logistics costs in e-commerce sector^[2]
urban freight amounts to 10% of India’s freight related CO2 emissions and is usually the biggest contributor to in-city transport related NOx and PM emissions^[3].

Planning for city logistics is a complex process as urban freight transport is a for-profit activity which is pre-dominantly controlled and operated by the private interests; and public authorities have a low understanding of the commercial dynamics of freight distribution. Public authorities have treated city logistics as a problem area and solutions have been driven by ad-hoc planning such as restricting the movement of Goods vehicle within the city limits, relocation of freight activity generators such as markets, transport nagars etc. outside city limits etc. Meanwhile, logistics service providers, shippers, carriers have continued with their business to provide the goods required by the urban population at the right quantity, place and time. With the proliferation of the gig economy and e-commerce industry in the recent years urban freight mobility and logistics activities have exploded in cities across India.

Hence, going forward, cities need to take steps to plan for freight and logistics infrastructure for efficient and sustainable movement of goods in the city. For holistic development of the city, freight planning should be integrated within the city’s overall development and mobility landscape.

Principles for preparing CLP

According to the guideline developed by European Commission on sustainable urban logistics, a city logistics plan should be developed with the following major principles [4]. These are:

Improve Effectiveness: Emphasise achieving a sustainable mobility system through measures that will improve the effectiveness of the city logistics. The planning area under the city logistics plan should be dependent upon the characteristics of the supply chains in the city, which is from the origin point to the final consumption, rather than limited to the city administrative limits
In line with SUMP: The CLP should be developed in line with the vision of the comprehensive mobility plan / sustainable urban mobility plan, which clearly outlines the feasible short, and medium-term interventions, budget plans, and roles of different stakeholders for better implementation
Scenario assessment: The plan should focus on assessing the current scenario of the logistics ecosystem of the city to understand current challenges, strengths, and influencing factors of city logistics. It should also identify certain measurable targets, and performance indicators to assess the results of the interventions in the future
Define optimum mode: Development of an optimum mode share solution for cargo movement in the urban area considering the options of both passenger, and freight modes, traditional, and non-traditional modes to improve the environmental conditions and economic efficiencies.
Cooperation: Cooperation of Government authorities at different levels such as sectors, urban, regional, and National levels at both the planning and implementation stages is needed for a successful City Logistics Plan considering the wider domain of city logistics.
Stakeholder participation: One of the major principles and success factors of the plan is the participation of all the involved stakeholders such as the public, private, consumers, etc. in the preparation, and implementation stages of the plan. The partnerships as well as the plan should be prepared while keeping in mind the perception of different stakeholders and the value addition towards the activities of various stakeholders.
Define criteria: The plan should develop a detailed framework for identifying key indicators, the data requirement, partnership criteria among stakeholders for data sharing, and the evaluation criteria which will help the implementing authority monitor and evaluate the progress.
Quality assurance: The quality assurance of the City Logistics Plan in terms of the content, feasibility of actions, and roles of different actors are very important and can be undertaken through external panels or self-assessment tools.

Benefits of preparing CLP

Preparation of a CLP will reap multiple benefits for city as it will help city have a clear understanding of the logistics sector and will help in the decision-making process. It will also reduce the negative externalities such as reduction in congestion, reduction in pollution, improve processes such as regulatory strategies and integration of modes. The private sector will benefit as it will bring in efficiency and reduce the cost of logistics. The consumers will benefit with improved accessibility to goods and services.

Bibliography

Anujesh Singh, Devika Kapur and Anshul Sethi. 2018. E-commerce retail logistics in India. KPMG. https://assets.kpmg/content/dam/kpmg/in/pdf/2018/05/e-commerce-retail-logistics.pdf.
Dr. Georgia Aifandopoulou, Elpida Xenou. 2019. Suatainable Urban Logistics Planning. European Platform on Sustainable Urban Mobility Plans. https://www.eltis.org/sites/default/files/sustainable_urban_logistics_planning_0.pdf.
NITI Aayog, RMI, RMI India. 2021. Fast Tracking Freight in India. RMI. https://rmi-india.org/insight/fast-tracking-freight-in-india-a-roadmap-for-clean-and-cost-effective-goods-transport/.
Press Information Bureau. 2022. PM Launches National Logistics Policy. 17 September. https://pib.gov.in/PressReleasePage.aspx?PRID=1860192.

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