Urban Goods Movement

-- Trends, regulatory issues, potential solutions and implications for policy makers with special reference to Ahmedabad region.

Literature Review
Definition of UGM[1],[2]:
The definition of UGM (urban goods movement) includes any movement of material goods (freight) rather than people. This rather simple definition, however, does not reflect the immense complexity associated with characterising these movements. [1] Urban freight transport and logistics operations are concerned with the activities of delivering and collecting goods in town and city centres. [2]

Broad classes of UGM: [1]

External movements: Those in which goods either enter, leave or pass through the city. Internal movements: Those that take place within the city boundaries. Each class also includes ranges of goods, modal choices and vehicle types for movement.
1 Urban Studies Journal limited: Understanding movement of goods, not people. (2001) 2Directorate General for Energy and Transport (European Commission): Urban Freight Transport and Logistics

Urban Goods Framework [1]

Fig.1 . A framework for the study of UGM.

The physical movement or transport of goods is the core. Actors: Groups and individuals whose decision making directly or indirectly influences the character of goods movement. Elements: Physical realm, including the nature of the goods themselves, the vehicle stock and the relationship between the transport system (network) and land use.

Importance of UGM [3]

Effect of Freight transport cost on the cost of commodities consumed in the region; Fundamental to sustaining our life style; The role it plays in servicing and retaining industrial and trading activities which are essential major wealth generating activities; The deleterious effect on a region if its industries are rendered uncompetitive due to poor freight services.

Four types of UGM [3]

Shipments into an area of goods to be consumed within that area; Shipments out of an area of goods produced in that area;

Goods entering the city for consumption inside the city

URBAN AREA

Goods produced within a city and transported out of it

 Intra-urban collection and delivery and local shipment in which the vehicle, though not necessarily the commodity, has its origin and destination within the same area;

PLACE 1

PLACE 2

URBAN AREA/CITY A

 Transient movements - goods passing through an area directly and also goods undergoing temporary storage and warehousing for carrier interchange, break bulk etc.

With or without WAREHOUSING AND CARRIER CHANGE URBAN AREA

Impacts of UGM [3]

Economic impacts: (i) congestion, (ii) inefficiency and (iii) resource waste. Environmental impacts
Freight transport is essential to the modern economy. An efficient system must provide the customer with a good service at a reasonable cost. While industry has achieved significant success in improving vehicle productivity and utilisation, urban congestion imposes major constraints on further improvements.

Trends affecting UGM

Land use planning [3]: In urban areas where space rare; strict control of the location of economic and industrial activities becomes necessary. Restricted permissions for Growth of retail outlets in the town
out of town retail establishments higher number of delivery vehicles entering town centre areas centre which has good private and public transport access

more consolidated delivery operations to meet extensive restrictions on vehicles access and growing road traffic congestion

Implications

Trend 1

The most congested areas could be avoided

Shopping centres and malls can be situated in the periphery of the urban region due to which trucking time needed to supply goods to city centre shops could be possibly reduced

Out-of-town locations accessible to private cars only; high number of vehiclekm driven by individual customers City centre shops are accessible by a range of modes of transport; provided they can be supplied effectively and at a reasonable cost to shippers and transport operators

Implications

Trend 2

 Changes within population structure: [3]

Strong tendency for population to grow in the city centre Growing number of customers pose a challenge to future delivery operations

Trend 1

Aging of the population Old aged people prefer to shop locally Extension of home delivery services to a wider range of products

Declining share of younger population pose a challenge for the labour market in UGM

constraint for delivery systems which need to cope with more consignments and deliveries

Trend 2

 Conflicting and diverse requirements of a wide range of participants [4]

Urban goods transport involves many different parties with separate interests. Each stakeholder has a different task within the process of urban goods transport.

Although all stakeholders share a common interest in the consumption of goods, their other individual interests often conflict.

 Supply chain trends and urban goods transport [4] Supply chain considerations become important because total freight transport is expected to rise due to ever increasing demand for goods.
Companies should
concentrate their production capacity in fewer locations and expand the geographical scale of their sourcing and distribution operations

This leads to wider logistic reach of companies and influences the pattern of UGM. Consequence: Urban goods transport has become more integrated with long haul transport.

 Figure 2. Example of a modern distribution pattern integrating the long haul transport chain with urban goods transport chain

 Supply chain trends [6]

Two main classes of freight movements can be identified schematically, called here in:
End-consumer: End-consumer movements are those in which the freight is moved by the customer (private or business end-consumer) who purchases and consumes the freight. Logistics: Logistics movements are those movements in which the freight reaches the facilities where it is delivered to markets for producing other products (goods) or services (for example there is the movement of freight from the warehouse to the retail outlet).

Supply chain trend refers to point of interaction between end consumer quantities (ring or chain) and logistics quantities (supply-chain or tour-based).

3Transport studies group, University of Westminster: Literature review WM9

(Part1 Urban freight transport, 2007)

4Delivering the goods (21st century challenges to Urban goods transport) (2003):
Organisation for Economic Co-operation and Development (OECD)

5 Urban freight policies and distribution channels: Department of Economics and

Statistics, University of Trieste, Italy and Department of Public Institutions, Economics and Society, University of Roma Tre.

6 A modelling system to link end-consumers and

distribution logistics: University Mediterranea of Reggio Calabria (2004)

National Scenario
Classification of Goods vehicles in India [7]:
Heavy commercial vehicles, or HCVs, are generally classified as those vehicles that have a Gross Vehicle Weight (GVW), of above 16.2 metric tonnes. Medium commercial vehicles, or MCVs, are generally classified as those vehicles that have a GVW between 7.5 and 16.2 metric tonnes. Light commercial vehicles, or LCVs, are generally classified as those vehicles that have a GVW of up to 7.5 metric tonnes.

 Classification of Goods vehicles in India [8]

 Vehicle Registration: [9]

India had over 100 million vehicles registered on its roads in the year 2008. This is a growth of about 100% in the past 9 years. Over 77% and about 77 million of these vehicles are two wheelers, about 14% and over 14 million are cars, jeeps and taxis. Over 5 million and over 1 million vehicles registered are goods vehicles and buses respectively.
7http://www.wikinvest.com/stock/Tata_Motors_(TTM)/Classification_Vehicles_India
8 India and the Middle East IBTTA Technology workshop 9 http://www.imaginmor.com/automobileindustryindia.html

UGM in the metropolitan regions of India

Urban Goods Movement Mumbai
Land use planning Mumbai: [11] Interventions for loading / unloading: [11] Development of truck terminals, truck parking lots Shifting of wholesale markets Restrictions on freight vehicles [11],[21] Emerging (actualized concepts): [11] Demand management and road user charges Improvement of existing public transportation, network and fleet Development of all north-south & east-west arterial roads and missing links Development of freeways around Mumbai and connecting with the hinterland
11TURBLOG (2011) Transferability of urban logistics concepts and practices from a world
wide perspective - Deliverable 3.9 - Urban logistics practices Mumbai Case study

 UGM in Delhi:
Restrictions on goods movement in Delhi Current situation [14],[23] Land-use planning in Delhi [12]
[14]

Integrated freight complexes [12] Developing new wholesale markets [15] Provisions given in Master Plan of Delhi (MPD)2001 [13] Project of Integrated Freight Complex-cumWholesale Markets at Gazipur (Trans Yamuna Area)
[13]

10Indias urban awakening: Building inclusive cities, sustaining economic growth : McKinsey Global Institute, April 2010.

12http://dda.org.in/planning/docs/12_Transportation.pdf
13 Integrated Freight Complex cum Wholesale Markets at Gazipur Trans Yamuna Area (By R.G. GUPTA, DELHI VIKAS VARTA, DDA VOL.4, NO.3, PAGE NO.9 to 17 July-September 1993) 14 Study on Concept Plan for Integrated Freight ComplexWholesale Market at Gazipur (By Department of Transport Planning, School of Planning & Architecture, New Delhi) 15 Master plan for Delhi-2021: http://rgplan.org/delhi/MASTER%20PLAN%20FOR%20DELHI%202021.pdf

 UGM in Chennai:
Regulations imposed on goods vehicles [22] Land use planning in Chennai [16]
Spatial Strategy

UGM in Kolkata:
Regulations imposed on goods vehicles [20] Future freight traffic in Kolkata [30] Land use planning [30]
16 http://www.hindu.com/nic/draftmasterplanii_short.pdf

20http://www.kolkatatrafficpolice.org/traffic_restriction.html 21http://www.trafficpolicemumbai.org/Notifications.htm
22http://www.chennaitrafficpolice.in/restriction.php 23http://delhitrafficpolice.nic.in/restri-lgv-hgv.aspx

 Changes within population structure in India [10]

5 states in India will have more than 50% of their population living in cities Tamil Nadu, Gujarat, Maharashtra, Karnataka & Punjab

Indias scale of urbanization will be immense India will have 68 cities with population more than 1 million (up from 42 today; Europe has 35 today), 13 cities with more than 4 million people and 6 megacities having population more than 10 million residents.

 The report says that India will need a whooping 1.2 trillion USD investment in next 20 years, especially in infrastructure. Close to 2.5 billion sq. metres of road and 7,400 kms of metros and subways will have to be build over the course of next 20 years. Our analysis: The planning strategies devised to cope up with the demands for transportation in urban India are centered around developing a public-transit-led system. This will surely lead to lowering of congestion in urban cities but thorough ignorance of transport of freight vehicles and lack of planning strategies to include infrastructural facilities in this regards pose a serious threat to development in urban India.

Economics involved in UGM

Introdution24 Analysis of Freight Rates17
Truck Load freight Rates in Different Countries (2002) Country Average Unit per ton km (in Rs.) (fuels price hike and overloading likely to be a thing of past due to judicial intervention). Country Pakistan India Brazil United States Freight rates - Average Unit per ton km(Rs.) (2002) 0.75-1.05 0.95-1.35 1.20-2.20 1.25-2.50

Central Africa
Australia China

1.75-4.25
1.75 2.00-3.00

 Analysis17 Given current freight rates, only a higher level of movement (350-400 Km, as against 250-300 km today) could prove viable Thus overloading order of day With judicial intervention, overloading likely to be thing of past Hence, possibility of increase in overall demand and hence freight rates Efficiency improvements could partly counter the above.
$2.5 billion annually spent in India, on fuel on account of trucks waiting in check posts, poor quality of trucks, poor infrastructure and road connectivity18
17Competition Issues in the Road Goods Transport Industry in India: S. Sriram Walchand Hirachand Professor of Transport Economics, Department of Economics, University of Mumbai and others. 18 http://www.dnaindia.com/money/comment_railways-is-the-right-track-formovement-of-goods-in-india_1256361

Problems of freight transport in urban areas

Accessibility and congestion: Insufficient urban goods transport infrastructure: Lack of parking places for freight vehicles, both on-road and off-road, which can be used for loading or unloading. Access restrictions: Restrict movements of freight vehicles in city centres according to time, size or weight of vehicles. Congestion: [3]
As claimed by Lerenius (2005), UK road network as the most congested in Europe, costs the economy 20 billion a year. (cited in Garbutt, 2005) It can be expected that significant share of these costs is generated by delayed road freight traffic in urban areas.

UGM - An Ahmedabad case study

AHMEDABAD:
Largest city in Gujarat, India and 7th largest metropolitan area of India.

In 2010, Forbes magazine rated Ahmedabad as the fastest growing city in India, and the third in the world after two Chinese cities Chengdu and Chongqing.

A retail mall on the Sarkhej-Gandhinagar Highway

Largest inland industrial center. Second largest industrial center in western India after Mumbai Largest supplier of Denims

One of the largest exporter of gems and jewellery Ahmedabad is the freight hub of Gujarat.

Problems and Issues in UGM in Ahmedabad

People see trucks as harassment and a threat on the road system. Retailer values the merchandises that the truck brings, but laments that vehicles in the processes of loading and unloading are occupying space that could be used as parking for potential customers.

The companies and drivers responsible for the deliveries of orders complain about the shortage of parking space for loading and unloading operations, and about the traffic congestion, generally caused by the excess of cars.

 Registry of Vehicles and share of goods vehicles in total vehicular population in Ahmedabad ( Source: R.T.O. Ahmedabad) Traffic analysis:
Peak traffic volume characteristics [26]

 Traffic composition: [26]

It can be seen from the table that at every location, two wheelers constitute more than 40% in overall traffic followed by Cycles. The maximum share of cycles (33%) is observed at Thakkar Bapa Nagar Junction and maximum three wheelers at Narol Circle and Naroda T Junction. Goods vehicles put together are merely just over 3% at overall level.
26AHMEDABAD BUS RAPID TRANSIT SYSTEM: Working paper 5: Traffic volume characteristics, junction management GIDB, AMC, AUDA, CEPT

The following Figure 3-1 provides pictorial presentation of traffic composition at overall level (all twelve surveyed junctions put together). [26]

Trends affecting UGM in Ahmedabad

Land use, planning and forecasting:
Wholesale markets [31]:
The market operates for 24 hours with pickup timings between 11 pm to 10 am. Over two thirds of the commodity is distributed outside the city. Only about 30 percent of the quantity is for the consumption within the city. Average waiting time for loading of trucks is about 5 hours within the market due to inadequacies in infrastructure (road width, loading platforms, parking areas, etc).
31Goods movement systems in Ahmedabad H M Shivanand Swamy, CEPT University

Potato and onion markets [31]:

This market is located at Vasna and caters to the special need of the onion and potato distribution. Market operates during 6 am to 6 pm. On an average 120 trucks bring commodities into the market. Infrastructure facilities like parking bays, loadingunloading platforms, communication, etc. are available within the premise.

Wholesale Grocery Market [31]:

An average of 50 trucks brings goods daily. It is estimated that about a third of the arrival is for distribution within the city. The market has its own go downs (250 in number) Limitations on loading-unloading activities get enforced due to entry restrictions within the city and hence become a cause of concern for the perishable goods.

 Changes within population structure in Ahmedabad city:

Fig: Population trend in Ahmedabad urban area [32]

Growing number of customers pose a challenge to future delivery operations Declining share of younger population due to aging of population pose a challenge for the labour market in UGM .
32City development plan, Ahmedabad (2006-12) - JNNURM - Ahmedabad Municipal Corporation and Ahmedabad Urban Development Authority with (Technical Support from: CEPT University, Ahmedabad).

 Commercial trend: Change in Retails Distribution System

in Ahmedabad [31] Retails goods distribution system is changing from small shops to medium to large hypermarket. With increasing number of shopping malls coming up in prime commercial area the traditional transportation of goods to highly distributed smaller retail centers has changed to larger malls and shopping centres. The clustering of such shopping malls and coming of hypermarkets in close proximity as exemplified in case of Iskon area of SG highway their transportation needs vary significantly as it is characterised by larger parcel sizes and varied cargo types with higher frequencies. Specialised warehousing within such areas with excellent connectivity to the outer connecting routes would go a long way in easing the pressure and helping the increase goods supply.

 Role of various stakeholders:

Transport and warehouse operators [31]:
Transport operators - Concerns: Non-availability of parking spaces for trucks, lack of security (rising cases of theft of fuel and goods) have also been highlighted. Study shows that overall 20 percent of the trucks return empty and average waiting time for the truck for consignment is 1-2 days. Warehouse operators Concerns: Value added services like packaging, temperature control, costumer care are absent. The loading-unloading platforms are not to the standards, which results in delay of activity. All the operations like handling and tracking within the warehouse is manual.

Third party logistics supply: [3]

It implies the trend towards outsourcing dedicated distribution services to third party specialists. It provides the retailer and the sector with significant advantages in terms of convenience and costs. Advantages are also experienced by retailers suppliers who appreciate cost reduction associated with ability to deliver in bulk to depots offering excellent facilities and operating 24 hours a day, 7 days a week. No need for entering busy city centres is an important advantage as well since delays caused by congested roads within urban areas significantly increase companies operating costs; affect their profitability and market competitiveness.

In view of increase in vehicular population and also increase in demand for goods within Ahmedabad urban area, this seems to be an emerging option available for utilization in the near future.

Potential Solutions
There exist two different groups, capable of changing the urban freight system . Their rationale for doing so is as stated: [3] 1. Changes implemented by governing bodies: The introduction of policies and measures that force companies to change their actions and thereby become more socially efficient. 2. Company-driven change: Company led initiatives:
Increasing the vehicle load factor through the consolidation of urban freight. making deliveries before or after normal freight delivery hours the use of routeing and scheduling software improvements in the fuel efficiency of vehicles improvements in collection and delivery systems

CONSOLIDATION

[3]

To achieve consolidation -- deliver larger loads, but less frequently .

PURPOSE: To improve the utilisation of the transport system; To reduce vehicle trips, increase efficiency and decrease financial and costs of transport.

Many retail chains in the UK, and especially food and clothing retailers, demonstrate a strong preference for dedicated distribution services, which are often contracted out to major logistics operators. [3] Major retailers may have several shops and consolidated deliveries then become feasible. In smaller towns, where the retailer probably has just one outlet, effective consolidation is much harder to achieve. One way forward may be for retail chains sharing the same ultimate ownership to develop common distribution systems. [3]

WAYS TO ACHIEVE CONSOLIDATION

[3]

CITY LOGISTICS Companies signed agreements to divide work and revenue on a formula basis in order to avoid duplication and inefficiency. (Bendel, 1996) A depot might be established specifically to handle collections and deliveries for the area concerned, perhaps with financial assistance from local government. Such schemes became known as city logistics.

URBAN TRANS-SHIPMENT CENTRE It is located on the edge of the urban area it serves, and freight destined for the urban area is off-loaded at the centre and sorted into consolidated loads for final delivery into the urban area.

 Urban freight facilities:

Urban freight terminals:
High investment and operating costs Increased congestion and pollution around terminals and within adjacent areas; contribute to lack of interest in freight terminals as a preferred solution in the future. Transhipment areas outside urban areas enabling consolidation and avoiding large vehicles entering the city centre.

Governments infrastructure, appropriate:

should provide the necessary with private participation where

Ring roads Dedicated roads and lanes for freight traffic Loading/unloading zones

Fig. Development of ring roads in Ahmedabad city. [33]

General observation and analysis of goods movement in Ahmedabad

Goods vehicle in Ahmedabad

 Trends in movement of goods vehicle in Ahmedabad

Policy: Current situation and future direction [4]

National/state government initiatives are crucial:
National/state governments need to take the initiative and provide clear policy objectives and frameworks under which tailor-made local measures can be planned and implemented.

Main policy objective should be sustainable urban goods transport:

Development of an urban goods transport system on a socially, economically and environmentally sound basis; long and short-term policies.

Urban goods transport policy needs consultative planning:

Agreement among all stakeholders.

 Public-private partnerships are important:

various levels of government, shippers, transport operators, vehicle manufacturers, retail and wholesale organisations, real estate developers, research bodies and inhabitants all co-operate closely in developing common objectives and solutions.

Integration of policies and measures across sectors is important:

not only with passenger transport but also among different policy areas and different levels of government.

Policies should be formulated so as to enhanced developments in the private sector:

Encourage the private sector to develop sustainable urban goods transport systems.

Urban freight transport policy measures include [3]

Vehicle time regulations: Limiting the times at which goods vehicles can enter all or part of an urban area, and the times at which loading and unloading can take place

Vehicle weight and size regulations: Restricting the size and/or weight of goods vehicles that can enter all or part of an urban area

Lorry routes: Advisory or mandatory routes for goods vehicles above a certain size or weight in an urban area

Most urban freight transport policy measures implemented by urban planners have sought to restrict rather than assist goods vehicle operations

 Policy approaches: [3]

REFERENCES
Urban Studies Journal limited: Understanding movement of goods, not people. (2001) 2Directorate General for Energy and Transport (European Commission): Urban Freight Transport and Logistics 3Transport studies group, University of Westminster: Literature review WM9 (Part1 Urban freight transport, 2007) 4Delivering the goods (21st century challenges to Urban goods transport) (2003): Organization for Economic Co-operation and Development (OECD) 5 Urban freight policies and distribution channels: Department of Economics and Statistics, University of Trieste, Italy and Department of Public Institutions, Economics and Society, University of Roma Tre. 6 A modelling system to link end-consumers and distribution logistics: University Mediterranea of Reggio Calabria (2004) 7http://www.wikinvest.com/stock/Tata_Motors_(TTM)/Classificatio n_Vehicles_India 8 India and the Middle East IBTTA Technology workshop
1

17Competition

Issues in the Road Goods Transport Industry in India: S. Sriram Walchand Hirachand Professor of Transport Economics, Department of Economics, University ofMumbai and others. 18http://www.dnaindia.com/money/comment_railways-is-the-righttrack-for-movement-of goods-in-india_1256361 19Infrastructure Practice: Building India, Transforming the nations logistics Infrastructure McKinsey and Company 20Goods vehicle restrictions: http://www.kolkatatrafficpolice.org/traffic_restriction.html 21http://www.trafficpolicemumbai.org/Notifications.htm 22http://www.chennaitrafficpolice.in/restriction.php 23http://delhitrafficpolice.nic.in/restri-lgv-hgv.aspx 24The Sixth International Conference on City Logistics - A sustainable perspective on urban freight transport: Factors affecting local authorities in the planning procedures by Maria Lindholm 25Urban freight logistics in the European Union: Newrail,University of Newcastle upon Tyne (UK) AICIA (Association of Research and Industrial Cooperation of Andaluca) Universidad de Sevilla (SPAIN)

BUS RAPID TRANSIT SYSTEM: Working paper 5: Traffic volume characteristics, junction management 27Development of policies, strategies and guidelines for goods movements in urban areas Dr S Gangopadhyay, Director, CRRI, New Delhi (2009) 28 Urban Goods Movement workshop: Background paper Silex Consulting Inc. (2008) 29 Urban freight transport in a metropolitan context: The Belo Horizonte city case study David Jos A. V. de Magalhesa Federal University of Minas Gerais, Av. do Contorno, 842, sala 607, Belo Horizonte 30110-060, Brazil (2010) 30City Development Plan JNNURM West Bengal - Kolkata (2001) (http://jnnurmwestbengal.gov.in/HTM/CDP/Kolkata_CDP/CH-I117.pdf)

26AHMEDABAD

31Goods

movement systems in Ahmedabad H M Shivanand Swamy, CEPT University

32City

development plan, Ahmedabad (2006-12) - JNNURM Ahmedabad Municipal Corporation and Ahmedabad Urban Development Authority with (Technical Support from: CEPT University, Ahmedabad).
33 Structuring

urban travel demand H M Shivanand Swamy, CEPT University, Ahmedabad.