Freight Distribution in Urban Areas: The Role of Supply Chain Alliances in Addressing the Challenge of Traffic Congestion for City Logistics

Despite the recent recognition of the contribution of freight transportation to the performance of urban areas under the rubric of city logistics, the authors see a void in the study of how the stakeholders in the supply chain associated with the distribution of goods (whose destination is an urban location) might cooperate through participation in distribution networks, to reduce the costs associated with traffic congestion. Given that transport costs are typically over 45 percent of all distribution costs, with congestion contributing a substantial amount of cost in the urban setting, the importance of establishing ways in which supply chain partnerships might aid in reducing the levels of freight vehicle movements in urban areas has much merit. This paper sets out a framework to investigate how agents in the supply chain might interact more effectively to reduce their costs of urban freight distribution. The authors propose an interactive agency choice method as a way of formalizing a framework for studying the preferences of participants in the supply chain to support specific policy initiatives.