Urban Transhipment

International Review of Urban Transhipment

Studies and Initiatives
Report prepared for the Retail and Distribution Panel of the
UK Government's Foresight Programme (1998)

Professor Alan McKinnon

Logistics Research Centre
Heriot-Watt University
EDINBURGH.
Interest in urban transhipment has not been confined to the UK. Over the
past quarter century many other developed countries have also investigated
the possibility of establishing transhipment systems and several have put
the idea into practice. This section reviews the results of the foreign studies
and the experience of those towns and cities that have implemented
transhipment systems.
Early Studies and Developments
In the early 1970s when the concept of urban transhipment first came to
prominence in the UK, two major developments occurred in the US and
France which highlighted a major difference between the American and
European approaches to urban freight rationalisation.
North America
Between 1972 and 1974 a major urban freight study was undertaken in
Columbus, Ohio with funding from the US Department of Transport. This
detailed analysis of freight movements revealed that there was considerable
potential for consolidating loads1 (Table 2.1). Unlike in the UK, where the
transhipment studies assumed a limit on vehicle carrying capacity of 3
tonnes, the Columbus study envisaged the use of articulated vehicles, 28 ft
long with a carrying capacity of 7.5 tons. There was no proposal to tighten
restrictions on the size or weight of vehicles within the urban area. The use
of relatively large vehicles would have permitted a much higher degree of
consolidation than within the proposed British transhipment systems and
actually yielded cost savings. Even once allowance was made for the cost
of a new consolidation terminal, it offered a net financial benefit. The
environmental benefits were relatively modest, however. A later study in
Chicago examined the feasibility of consolidating loads up to a lower limit
and predicted that this too would be commercially viable. In neither city,
however, were special consolidation terminals built nor any municipal
transhipment schemes implemented.

Table 2.1: Potential benefits of consolidating all consignments of less than

5000lbs at an urban consolidation terminal: Columbus study
Performance index
No. of vehicles
Distance travelled
Transit time
Unloading time
Loading time
Queuing time
Annual cost

% reduction
90
91
91
53
37
100
76

Similar assessments of the potential for urban freight consolidation in

several Canadian cities in the mid-1970s, including Vancouver and
Saskatoon, produced much less promising results. In a review of his work,
Wood, Suen and Ebrahim2 concluded that the value of consolidated
terminals was found to be inconclusive and that there was little
justification for a significant outlay of public funds to build and operate a
terminal.
France
In 1971 a carrying capacity limit of 3.5 tonnes was imposed on delivery
vehicles entering central Paris. Exemption was granted to vehicles carrying
bulky products such as newsprint and construction materials, but this still
left a large proportion of freight, mainly retail supplies, directly affected by
the restriction. It was anticipated that this would greatly increase the
demand for break-bulk transhipment services on the perimeter of the
restricted area. The French government supported the development of two
freight complexes, one to the south, called Sogaris, and the other in the
north eastern quadrant, called Garonor. Public transhipment centres were
established on both sites. It was expected that these would be temporary
developments until sufficient break-bulk / consolidation capacity had been
developed in private haulage depots. The Garonor facility, which was lossmaking, was indeed closed down after a few years3. The Sogaris one has
continued but with a very small throughput. Both sites have developed into
integrated freight complexes, with extensive warehousing, freight
forwarding and office development.

Netherlands
During the 1970s British planners and environmentalists frequently cited
examples of urban transhipment working effectively in Dutch cities and
saw them as a model for what could be developed in the UK. These
transhipment centres were operated by co-operatives of small road haulage
firms, in some cases with financial support from the municipal authority.
One of the largest centres, in Groningen, was run by a co-operative
comprising 92 hauliers3. Most of these centres did not simply provide an
urban break-bulk transhipment function: they also facilitated the groupage
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and resorting of inter-urban as well as intra-urban freight. They were

created partly in response to the Dutch system of road haulage regulation
which restricted the zones within which hauliers could operate. By the
1970s, the UK had deregulated its road haulage market, nor did it have the
same tradition of municipal involvement in local freight operations that one
found in the Netherlands. It is important, however, to put the Dutch urban
transhipment operations into perspective. It was estimated in 1980, for
example, that only around 2% of all domestic freight in the Netherlands
passed through these facilities4.
Urban Transhipment Initiatives over the Past Decade.
Netherlands
In 1989, the Dutch government launched a collaborative initiative with
organisations representing road hauliers to examine ways of overhauling
urban freight delivery. One of the main proposals to emerge was the
development of urban distribution centres (UDCs) primarily to ease
environmental and congestion problems in urban areas. A total of sixteen
towns were identified as possible locations for UDCs. The Government
planned to support pilot projects in four towns: Maastricht, Leiden, Arnhem
and Groningen. Several initial conditions were established:

the schemes had to be commercially viable

use of the UDCs had to be voluntary
they had to have good road access
delivery vehicles operating from the UDCs had to be environmentallyfriendly
development of the UDCs would be accompanied by tighter vehicle
access restrictions

It was envisaged that the typical UDC would have a floor area of 8000
square metres, with a fleet of 40 vehicles handling 1500 shipments per
day5. It would serve only the inner city area and cater mainly for retail
deliveries.
Coopers and Lybrand 6 were commissioned to analyse the pattern of freight
flow in the pilot municipalities and assess the potential benefits of the
transhipment scheme.
Pattern of freight flow and level of UDC usage:
To estimate the volume of freight likely to pass through the average UDC,
the consultants excluded various categories of traffic, such as fresh
produce, waste material and other items requiring specialist handling,
comprising in total 30% of the freight delivered in urban areas. They also
excluded consignments larger than 1 cubic metre, amounting to a further
10% of freight volume. Setting this volume constraint at a relatively low
level effectively targeted the UDC scheme on smaller parcel-type
deliveries. The remaining 60% of freight was considered suitable for the
UDCs. Only a quarter of this freight, however, had a destination in the
inner urban area, representing 15% of all the freight delivered within the
towns. It was estimated that the UDC would capture around two-thirds of
this traffic, i.e. 10% of all freight tonnage delivered.
2

Economic evaluation:
The consultants calculated that the consolidation of loads at the UDCs
could cut transport costs in the inner urban area by approximately 75%.
This would more than offset the additional costs of the transhipment
operation, yeilding significant cost savings overall (Table 2.2). The
commercial viability criterion would therefore have been satisfied.

Table 2.2: Relative cost of transhipping goods at an Urban Distribution

Centre (m. Dfl/annum):

Transport
Transhipment
Total

Without UDC
20.4
0
20.4

With UDC
5.0
10.5
15.5

View of Business
Despite the positive results of the feasibility study, the UDC plan was
strongly opposed by much of the business community 5. Its concerns
closely resembled those of British firms consulted about transhipment over
the past 20 years. Organisations representing haulage firms denied that
there was a need for new UDCs, especially if they were to be publicly
operated, claiming that existing freight facilities in urban areas were
adequate. A particular fear was that publicly-owned UDCs would become
monopoly providers of inner-urban transhipment services. Firms were also
suspicious about the dual role of municipalities in being the regulatory
authority imposing vehicle access restrictions while also being fully or
partly involved in running UDCs. It was found that many of the larger
retailers would also be reluctant to use UDCs as they regarded logistical
support for their shops as a competitive differentiator and hence
something they wished to control themselves. The validity and accuracy of
the empirical analysis and economic modelling was also challenged. It was
asked why, if there were significant economic benefits to be obtained from
channelling goods through UDCs, they had not been developed by the free
market. No explanation was given of why such a market failure should
have occurred.
Following this welter of criticism, the Dutch government scaled down its
plans for UDCs, narrowing the scope of the project and concentrating on a
single pilot scheme in Maastricht. Greater emphasis was placed on
establishing public-private partnerships and closely involving local
businesses. A UDC was established in Maastricht in 1991. Despite heavy
promotion, the centre has attracted relatively little traffic and is generally
regarded as having been a failure7. This experience has undermined
confidence in the traditional form of transhipment as a means of
rationalising freight movement in urban areas.

It should be noted, however, that a successful transhipment scheme has

developed in Utrecht, independently of the pilot projects. This has evolved
from a haulier-based transhipment system originally developed in the 1970s
and is essentially a private sector initiative with some support from the
municipal authority. It is more of a freight complex than a narrowlyfocused urban transhipment centre.
Germany
Three developments have occurred in Germany during the 1990s with
particular relevance to the transhipment debate:
City Logistics initiatives:
In Germany city logistics is closely associated with the consolidation of
retail supplies handled by spedition companies. These freight forwarding
agencies have played a major role in the Germany domestic freight
transport market, largely because of the nature and complexity of
regulatory controls on the road haulage industry. In the UK, freight
forwarders have minimal involvement in domestic distribution and
concentrate their attention on international transport. The internal freight
market in Germany has therefore been differently structured from that of
the UK.
In most German cities, spedition companies handle only a small proportion
of retail deliveries. In Kassel, for example, around three-quarters of the
shop delivery vehicles are operated by multiple retailers, manufacturers or
parcel carriers8. Much of the remainder is split between numerous
spedition companies each of whom separately organises store deliveries
often of small quantities. In several cities, including Kassel, Cologne,
Stuttgart and Ulm, spedition companies have begun to cooperate,
consolidating their retail supplies and having them delivered by a single
neutral carrier. This usually involves channelling products through an
urban transhipment terminal and despatching the consolidated loads in
medium-sized rigid vehicles whose livery identifies them as participating in
the City Logistics initiative.
This is currently only affecting a small proportion of retail deliveries. In
Kassel, for example, the 12 spedition companies taking part in the scheme
are responsible for only 3% of retail deliveries. Partly as a result of the low
volumes, the economics of these operations is marginal. In Kassel the
transport cost savings accruing from increased consolidation have been
more than offset by the additional handling costs incurred at the
transhipment depot. It is claimed, however, that the participating firms aim
not only to improve their operating efficiency but also to improve their
business image.
Various improvements are being made to City Logistics schemes to
improve their efficiency and expand their capability:

to incorporate home delivery

to exploit IT in vehicle tracking and route planning
to accommodate return flows of packaging material
to employ low emission vehicles
4

Attempts to bring the large retailers and parcel companies into these
schemes have so far had limited success. The retailers argue that they
already achieve a high degree of consolidation, while the parcel companies
are fiercely competitive and loath to accept any encroachment on their core
business.
Guterverkehrszentren (GVZs)
These are large freight terminals, closely resembling the freight
complexes that were proposed for the UK by the LEC in the late 1970s,
though with a stronger intermodal function. In 1993 the German
government, in association with the railways and post-office, published a
plan for a network of 38 GVZs around Germany. These were to serve
mainly as modal interchange points, though they would also act as nuclei
for the development of a broad range of logistical services offered at
various geographical scales. It was anticipated that they could develop an
urban transhipment / consolidation function.
The largest GVZ to develop so far is located in Bremen. It serves as an
urban transhipment centre and has been portrayed in the UK as a good
example of a successful transhipment operation9. In practice, however, this
is only a small of the total activity, with most of the traffic it handles
moving inter-regionally or internationally. It does illustrate, however, how
integrated freight complexes can exploit synergies between freight handling
requirements of carriers operating at international, national, regional and
urban scales. Very few GVZs have so far been established elsewhere in
Germany.
Modelling the Impact of Urban Freight Initiatives
As one of the main contributors to the EUs COST 321 programme the
German government modelled the effects of 20 measures on urban traffic
levels and the environment 10.
Several of these measures have direct
relevance to the transhipment issue. Table 2.3 shows the predicted effect of
these measures on a series of key variables, averaged across five of the
cities. It shows that in most cases the % changes are very small. Use of IT
systems (measure 3) would yield the greatest benefit in terms of emissions.
Surprisingly, transhipping into smaller vehicles would have only a marginal
effect on fuel consumption and emissions. It should be noted that these
measures are not mutually exclusive and could be combined in a way that
reinforces their beneficial effects.
Table 2.3: Percentage changes in key variables resulting from selected
urban freight measures: average values for 5 German cities*
Measure

HGV
Fuel
Particulates NOx
traffic
consumption
1
-0.49
-0.13
-0.44
-0.22
2
-0.48
-0.99
-0.51
-0.61
3
-0.33
-3.55
-6.36
-1.50
4
+1.32
+0.05
+0.28
+0.01
* Bliefeld, Bremen,Cottbus, Dortmund,Dusseldorf.
5

Noise
(daytime)
-0.27
-0.06
-1.31
+0.72

Measures:
1. Transport co-ordination and co-operation of retailers
2. Establish goods distribution centres with co-operation of carriers
3. Guidance and information systems for goods transport
4. Replace large trucks with smaller trucks and vans
France
In recent years attempts have been made to establish, on an experimental
basis, urban freight platforms in Arras and Lille. Little information is
available as yet on these initiatives.
At a national level, French government has taken the view that there is a
pressing need to rationalise the movement of freight in urban areas but that
too little was known about the pattern of freight flow to develop and
implement new initiatives. It has therefore sponsored three major studies
of freight movement in Bordeaux, Marseilles and Dijon involving the
collection of large quantities of primary data. These data have been used to
calibrate a new freight trip generation and distribution model called
Freturb. It is hoped that this model will be able to simulate the urban
freight transport system enabling planners to assess the impact of a range of
initiatives including the transhipment and consolidation of retail supplies.

EU Research: EU COST 321 project.

Recently the COST 321 programme (an EU programme including
Denmark, Finland, France, Germany, Greece, Italy, the Netherlands,
Slovenia, Sweden, Switzerland and the United Kingdom) has been
considering the whole area of urban goods transport 10. It suggested that
freight movements account for between 10 and 15% of all vehicle
movements in the urban areas, but up to 40% of the energy consumption
and emissions from vehicles. It has defined its main objectives as:
The reduction of air pollution, noise and energy consumption
by optimising the use of trucks in city traffic by the application
of modern logistical devices and appropriate administrative
measures .
To this end, it has considered the experience of urban areas in the
participating countries which are implementing, or planning to implement,
measures aimed at achieving the above objective. The report includes a
breakdown of urban freight transport initiatives in the participating
countries.
The nature of urban freight, however, varies enormously between urban
areas both within and between countries. For example the COST 321
programme estimates that 55% of all goods transported within Stockholm
are internal movements; 15% are outbound movement, 20% inbound, and
6

10% are transit traffic. In the case of London, it is estimated that less than
30% of movements have origins and destinations within the urban area.
The COST 321 programme attempted to model the effect of different urban
freight measures on various European urban areas: this suggested that the
effect of any one policy, or any combination of policies, was very unlikely
to be the same in different urban areas. This exercise suggested that
metrics such as number of inhabitants, the density of inhabitation, the rate
of employment, car ownership, lorry ownership per employee, road length
per lorry, the relationship between, and absolute values of, car kilometres
and lorry kilometres all have to be considered when modelling the freight
system within urban areas. It many cases, the same measure may have the
opposite effect in different urban areas.
The measure with the most to promise in terms of improved urban freight
transport was the reduction in packaging volume; the second most
promising measure was the adoption of light goods handling equipment and
the third city logistics based on the German definition outlined above.
Traditional transhipment centres do not find favour (in fact, they are cited
as failing in Mastricht, though successful in Bremen).
Other measures which the Cost 321 programme favours are those aimed at
reducing the impact of lorries in the urban area: promoting noise reduction,
cleaner fuels and electrically powered vehicles, for example. It is also
suggested that the impact of any one individual measure is likely to be
slight, and that combinations of measures must be designed on a bespoke
basis for each city.
In the longer term, a network of rail-connected city centre transhipment
depots is identified as offering significant benefit. However, this would
require a large investment in the supporing infrastructure.
Considerable care is required in evaluating possible measures. Often
measures conflict: the increased use of mechanical handling systems and
reducing the volume of packaging could, for instance, be in conflict.
Measures can also have perverse effects: e.g. greater use of information
systems could lead to an increase use of secondary roads (as shortcuts or to
avoid congestion) which may optimise transport performance but increase
the impact of transport in environmentally-sensitive neighbourhoods.
One must also consider counter-intuitive measures. For example, banning
large vehicles is often proposed. However, banning small vehicles is also
possible. This might force operators to consolidate loads in large vehicles
to recover the increased running costs. This effect could be reinforced by
requiring specialised urban vehicles conforming to low (or zero) emission
standards and suited to urban operations (manoeuvrable, road friendly, low
deck height, sophisticated handling equipment for fast loading and
unloading). As these are expensive to purchase and run, they may have to
be large enough to earn their operators an adequate return.
Conclusions

Despite frequent reference in the UK to urban transhipment working

effectively in other countries, there have been very few examples elsewhere
of the traditional break-bulk form of transhipment being implemented at an
urban level on a communal, shared-user basis. Within Europe the best two
examples of such a system in operation are in Bremen and Utrecht. Both of
these examples, however, bear little resemblance to the transhipment
operations proposed for British towns and cities in the 1970s and more
recently in places such as Winchester and Aberdeen. The terminals are
essentially freight complexes, acting more as interchange points for interregional and international traffic than as urban transhipment depots. There
are similar examples of the superimposition of urban transhipment /
consolidation on freight complexes in other countries, such as Italy (
Interporti) and Spain
(Zals).
In assessing the extent to which we can learn from foreign experience, it is
important to acknowledge the differing circumstances in other countries. In
particular, there are four ways in which the UK differs from those countries
where there has been greater experimentation with urban transhipment:
Regulation of the road haulage industry: Most European countries have
deregulated their road haulage industries comparatively recently, unlike the
UK which has had a very liberal road haulage regime for almost thirty
years. In the Netherlands, the nature of the regulatory controls gave
hauliers an incentive to engage in collaborative transhipment operations. In
Germany, the system of regulation favoured the development of freight
forwarding (spedition) agencies for domestic traffic. They are playing a
key role in the development of city logistics schemes in German cities,
but have no direct counterpart in the UK. German city logistics
initiatives, nevertheless, provide a useful model of how private firms can
enter into collaborative arrangements to achieve greater load consolidation
and higher vehicle utilisation.
Intervention by municipal authorities in the freight transport system: The
Dykes Act of 1973 granted British local authorities the power to control the
movement of freight by road. In many places, these powers have only
been exercised to a limited extent. Elsewhere in Europe municipal
authorities have become more actively involved in the planning and
management of freight distribution within their areas, not only through the
imposition of controls but through partnerships with freight operators and
direct financial support for new freight facilities.
Retail planning policies: Some countries, such as the Netherlands, have
applied stricter controls on suburban and out-of-town shopping
developments than the UK with the result that a much greater proportion of
their retail capacity is located within town centres. This has created a
greater demand for an urban transhipment services in these countries.
Nature and extent of multiple retailers control over the supply chain:
Large retailers in the UK tend to be more heavily involved in logistics than
their counterparts in other European countries. This, coupled with the
higher degree of retail concentration in the UK, means that a much larger
proportion of retail supplies in this country are channelled through RDCs
8

for delivery in consolidated loads to shops11. As a consequence, there is

likely to be a smaller proportion of retail-related freight requiring shareduser transhipment / consolidation in the UK than elsewhere in Europe.

There have been several general assessments made in recent years of the
prospects for urban transhipment in Europe. A Delphi study undertaken in
1993 by five research institutes in the UK, the Netherlands, Germany,
Sweden and Spain asked a large panel of logistics specialists12:
When will most goods for urban delivery pass through multi-user
transhipment facilities?
The average estimate was that this would happen in 2008, though there was
a large measure of disagreement between the Delphi panellists, reflected in
a standard deviation value of 11 years. Almost a quarter of the respondents
thought it would never happen.
Club EUROTRANS13, a group of logistics researchers drawn from six
European countries, reviewed the development of urban transhipment in
Europe in the context of a broader study of the polarisation of European
logistical space. Reporting on the work of this group Whiteing sees the
prospects for the break-bulk form of transhipment on the outskirts of towns
as bleak 14.
Finally, it is worth noting that this traditional form of transhipment does not
feature prominently in the final report of the COST 321 programme. This
is only one of 27 measures reviewed by the programme. Indeed, several of
the transhipment-related measures, including goods distribution centre
(with or without the co-operation of carriers), consolidation by means of
urban containers and transport co-ordination and co-operation of retailers
are predicted to have only a weak effect on goods transport by road.
On the other hand, city logistics is one of six measures which are
reckoned to be strongly effective. Overall the study recommends the
adoption of package of measures to address the worsening problems of
freight delivery in urban areas.
References:
1. McDermott,D.R. Urban Goods Movement: State of the Art and Future
Possibilities Transportation Journal, 20, 2, 1980.
2. Wood, W.G., Suen,L. and Ebrahim,A. Urban Goods Movement
Research: Canadian Experience in the Seventies Transportation
Planning and Technology, 7, 2, 1982.
3. Lorries and the Environment Committee Report on Transhipment
London, 1976; PE Consulting Group Transhipment London, 1976.
4. Research Science Policy Unit Consolidation and Transhipment
Department of the Environment / Transport, London, 1980.

5. Wang,W. Urban Distribution Centres in Holland in Fabbes-Costes,N.

(ed) Actes des Premieres Rencontres Internationales de la Recherche
en Logistique. Universite de Aix-Marseille II, 1995.
6. Coopers and Lybrand Locations for Urban Distribution Centres
Dutch Ministry of Transport and Public Works, 1991.
7. Whiteing,A.E. New Directions in Distribution in proceedings of the
inaugural workshop of the Logistics Academic Network, Warwick
Univ. 1996.
8. Kohler, W. and Strauss,S. City Logistics Concept for Kassel paper
presented to PTRC conference, section B: Freight, 1997.
9. Steer Davies Gleave Alternatives to Traffic Growth: The Role of
Public Transport and the Future of Freight Report for Transport 2000,
London, 1995.
10. European Commission COST 321: Urban Goods Transport. Final
Report Brussels, 1998.
11. NEA A Comparison of Logistics Strategies and Structures of Freight
Flows by Grocery Retailers in Four European Countries The Hague,
1997.
12. Cranfield Centre for Logistics and Transportation Logistics Futures in
Europe: A Delphi Study. Cranfield, 1994.
13. Club EUROTRANS La Polarisation des Espace Logistiques
Europeens edited by J. Colin, CRET-LOG, Universite de AixMarseille II, 1994
14. quoted in Pease,J. Transhipment: Can it Help Freight, vol.30,no.8,
1997

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