Project: Urban Consolidation Centres

Reference: LP0410

Last update: 17/08/2005 11:55:13


. Review existing literature on consolidation in the UK and elsewhere

. Investigate different types of consolidation practice, considering both the business and environmental case for each

. Obtain the views of a sample of supply chain parties and local authorities on the appropriateness of different types of urban consolidation centres and their impacts

. Carry out a preliminary evaluation of the situations in which each type of urban consolidation centre considered is likely to be most appropriate and to make comparisons between the strengths and weaknesses of different types of consolidation centres.


The proposal is to carry out a scoping study in order to identify the potential for the development of consolidation centres / transhipment centres that have as their principal objective the alleviation of local environmental and traffic concerns in urban areas. It is an area that is subject to much discussion and the occasional trial, but to date there has been a lack of evidence-based information upon which potential operators, be they logistics providers or local authorities, can base decisions as to the viability of such initiatives. The proposed research would provide that information.

Broadly speaking there are two linked objectives relating to these consolidation centres. First to reduce or eliminate the number of inappropriately sized vehicles entering particular urban area, and secondly to avoid the need for vehicles to deliver part loads into urban centres. These objectives can be achieved by providing facilities whereby deliveries (retail, office or residential) can be transhipped and/or consolidated for subsequent delivery into the urban area in an appropriate vehicle with a high level of load utilisation.

Consolidation of goods can have both economic and environmental benefits. From an economic perspective consolidation can help to:

. Increase the volume of goods carried on vehicles entering a given urban area; thereby reducing the unit costs of transportation for the final delivery stage.
. Reduce the number of deliveries that have to be received at a location; thereby reducing the disruption and labour requirements associated with receiving multiple deliveries.
. Reduce the time spent driving to the delivery address and accessing the point of delivery by the driver; who may only have a small quantity or a single item to deliver.

Additionally, retail consolidation centres can be used to:

. Reduce the time it takes to replenish stock and thereby help to reduce out-of-stock situations. By removing stockholding from, say, a retail outlet and instead holding the stock at a local consolidation centre space can be freed-up at the shop for additional retailing footage.
. Perform a range of other activities such as unpacking, preparing products for display, pricing, waste removal, and product returns thereby removing the need for these tasks to be performed in the store.

However, these potential benefits have to be weighed against the potential costs associated with consolidation that can include:

. Capital and operating costs of consolidation centres.
. An additional handling stage in the supply chain.
. The security, liability and customer service issues associated with additional companies handling goods.

From an environmental and quality of life perspective, consolidation can help to:

. Reduce the number of unsuitable goods vehicles and possibly the total number of vehicles operating in the urban area.
. Improve the lading factor and empty running of goods vehicles thereby reducing vehicle movements and distance travelled.
. Reduce the fuel consumed and hence pollutant emissions and noise generation in delivering goods.
. Offer the opportunity to operate environmentally sensitive vehicles on the final leg of the urban supply chain.
. Make the area more pedestrian-friendly.


University of Westminster
Transport Studies Group, 35 Marylebone Road, London, NW1 5LS
+44 (0)20 7911 5073

Contract details

Cost to the Department: £23,750.00

Actual start date: 01 December 2004

Actual completion date: 02 November 2005


Urban Freight Consolidation Centres Final Report
Author: Transport Studies Group, University of Westminster
Publication date: 02/11/2005
Source: Freight Best Practice programme
More information:

Summary of results

  1. . In the right circumstances there are realistic opportunities for UCCs and therefore the concept should be progressed in the areas of greatest potential.

    . The report proposes a framework by which the range of UCC types can be appraised, through the establishment of a clear and consistent method of evaluation. This is based upon the identification of the key elements of UCC evaluation, together with the distribution of the costs and benefits between the range of parties involved.

    . In order to achieve a more comprehensive evaluation of a UCC development it is desirable to identify and measure both broad indicators such as the impact on upstream logistics activities as well as the more specific indicators such as detailed changes in vehicle operations. The evaluation process needs to:
    - decide upon the boundaries of the analysis
    - collect sufficient "before" data to allow impacts to be observed
    - standardise the data collection between the "before" and "after" phases

    . An evaluation model is presented which allows different types of UCC to be assessed and their impacts to be established, both in aggregate and on individual parties involved.

    . Analysis of the allocation of the costs and benefits associated with UCCs suggests that it is critical to ensure that the issue is thoroughly examined prior to trying to establish a scheme. Focusing solely on the direct monetary costs associated with a UCC and its operation may lead to a misunderstanding about the potential longer-term benefits.

    . A number of generic lessons can be learned from this study:
    - Awareness of the concept and its varied potential applications needs to be increased, as there is considerable lack of knowledge and misunderstanding in both the private and public sectors at present.
    - A clear organisational structure is necessary to lead the development and operation of a UCC, with clear (realistic) objectives required. It appears that some UCC trials have been based on intuition rather than a quantified assessment and as a consequence are never likely to be viable.
    - The resolution of funding and other financial matters, including funding from the EU, central government and local government, are fundamental to the level of success of a UCC.

    . In general terms, it appears that UCCs have the greatest prospect for success if they meet one or more of the following criteria:
    - availability of funding, since there is no strong evidence that any truly self-financing schemes yet exist
    - strong public sector involvement in encouraging their use through the regulatory framework
    - significant existing congestion / pollution problems within the area to be served
    - bottom-up pressure from local interests (e.g. retailers in a Street Association)
    - locations with a single manager/landlord

    . From the evidence available, UCCs are most likely to be successful in situations similar to those detailed below:
    - specific and clearly defined geographical areas where there are delivery-related problems
    - town centres that are undergoing a "retailing renaissance"
    - historic town centres and districts that are suffering from delivery traffic congestion
    - new and large retail or commercial developments (both in and out of town)
    - major construction sites

    . The work carried out in this project suggests that, from a logistics perspective, the major potential beneficiaries from the establishment of UCCs would be:
    - transport operators making small, multi-drop deliveries
    - shared-user distribution operations
    - businesses located in an environment where there are particular constraints on delivery operations (e.g. limited access conditions - physical or time related)
    - independent and smaller retail companies
    . The traditional concept of a transhipment centre, with loads transferred into smaller vehicles, has generally not succeeded. Recent developments, with the main focus on improving vehicle utilisation and integrating the operation into the supply chain, seem to offer more potential.
    . There is a need for further investigation into the total supply chain costs and benefits associated with the use of UCCs. The traffic and environmental benefits associated with UCCs that are not reflected in existing pricing mechanisms need to be included in this work.