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City Logistics in the Context of Transportation Management Assignment Help

Essay on Innovation in Transportation

According to Taylor (2005), "City logistics is the study of the dynamic management and operations of urban freight transport and distribution systems. The aim is to deliver a win - win for business and the community by ensuring optimum productivity, reliability and customer service whilst reducing environmental impacts, air pollution emissions, energy consumption and traffic congestion". Freight transport activity in urban areas has become an interesting area of research for both academia and industry. Due to rapid and diverse changes in the shopping behaviour of consumers, particularly towards more ecommerce and online shopping, our cities are experiencing new challenges in terms of traffic congestion and environmental issues. For this assignment you are required to prepare an academic essay on the subject of: "City Logistics in the Context of Transportation Management: Challenges, Opportunities and the Role of Technology"

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City logistics experts are often expected to offer reasonable and highly efficient delivery services, even in the most congested of urban areas. Their role has become all the more important, as the supply chain is already complex since the just-in-time concept has come up (Savelsbergh and Van Woensel, 2016). The tight windows pertaining to delivery time are among the restrictions that challenge the logistics operations. Moreover, consumers often treat the city logistics provider as the only legal as well as physical entity, which increases the responsibility they have.

This is true mostly in e-commerce, as online retail stores often make the buyers believe that the products are available readily at all times. This increases the extent of demand that the consumers have, as they do not have the means or the capabilities to understand the supply chain or the city logistics processes (Savelsbergh and Van Woensel, 2016). This essay will examine the factors that have influenced the increase of city logistics in Australia, while identifying the business models, the economy models and the innovative solutions for seamless transportation.


Factors influencing the recent increase in city logistics activity

There are many factors that have led to the growth of city logistics, especially in Australia -

Urbanisation and population growth:A major portion of the Australian population is concentrated around the main cities, such as Sydney, Melbourne, Adelaide and Perth. They contribute the most to the country's GDP as well. It is a well-established fact that urbanisation together with the growth of population leads to an increase in the demand for city logistics activities (Savelsbergh and Van Woensel, 2016). It can be argued that more the population density, higher would be the challenges that city logistics would be faced with regarding their freight transport activities (Witkowskiand Kiba-Janiak, 2012).

Growth of e-commerce:Online shopping has become the booming trend, especially among the younger generations. This has given a major boost to the sales of the e-retail companies in Australia and around the world, which has been made possible by the increase in the rate of internet penetration (Savelsbergh and Van Woensel, 2016).

Need for speed:Many e-commerce companies, such as Amazon, offer same-day delivery options. These had been introduced as an initiative to tackle the competition rom brick-and-mortar stores. People in Australia are selecting such options, even paying the extra charges needed, simply to avoid the hassle of physically going down to the store. From the perspective of city logistics, the increase of these speed delivery options will further contribute to its growth as well as the rise in the amount of freight movements (Savelsbergh and Van Woensel, 2016).

Identification of different business models

City logistics can adopt either of three identified business models -

Broker model:This is one of the most commonly used business models among logistics and freight transport companies in Australia. The logistics service provider usually buys the shipment space in a bulk from the companies that partake in transportation, and then resell it to their clients at a much higher rate (Luncean, Badica and Badica, 2014). This can be best used by large -scale city logistics companies, as they have the capacity to make such purchases.

Gainsharing:In this business model, the third-party city logistics organisation works to cut costs directly with the consumers. This is applicable for those situations where the consumers are looking to get a successful service at a lower cost. This model can help incur a huge amount of savings, although a reliable partner is needed for the same (Gardner, 2011).

Commission model:In this case, the city logistics companies in Australia work directly for the shipping companies, and act as the mediators between them and the buyers. The system followed is a standardised one as in any commission-based model, and it also allows for more transparency and gives way to more efficient technological solutions (Rappa, 2004). This is mostly because the logistics company gets access to the technology used by the shipping enterprises very easily.

Innovative solution for carrying out city logistics task

An extremely innovative solution that can revolutionise the city logistics segment in Australia is that of the implementation of automation and robotics. Automation is nothing but the use of data-driven software for improving the operational efficiency of machines (Noble, 2017). This opens up a large number of solutions for any city logistics industry, as it can improve package labelling. Streamline the sorting systems and help manage warehouses more efficiently (Hamberg and Verriet, 2012).

The use of robotics will further hasten up the job process, especially in the case of e-commerce operations. Robots are usually able to perform more than one task at once, and this ability to multitask will considerably reduce the operating expenses of any city logistics organisation to a considerable extent (Sun, Kleiner and Schindelhauer, 2010). For instance, Amazon has been experimenting with robot-controlled deliveries in the US. Such a form of doorstep delivery can be initiated even in Australia for the convenience of the consumers and the shipping companies.

Contribution of shared economy models to productive and sustainable city logistics practices

A shared economy model is nothing but the collaborative use and consumption of the economy, usually based on a peer to peer exchange. Sharing the economy can contribute significantly to sustainable development in the case of city logistics practices. This is because the resources can be used in a sustainable manner by all the involved parties, and the contractors will also have the option for flexible employment, while the overheads would be consequently lowered, leading to lower expenses and investments (Daunoriene, et al., 2015). The changes in the economic environment makes it necessary for city logistics companies to be on the lookout for receiving value from the new services they could provide.


The impact that technology will continue to have in the future of city logistics is rather undeniable - increasing developments in the automation processes, together with the implementation of robots will make the process faster and more seamless. Systems for enforcing traffic regulations in the Australian streets will also aid in freight movement, as such initiatives will help to enforce the rules and effectively manage the entire city logistics process. Such interventions have become all the more necessary, as urbanisation and the growth of the e-commerce sector have rendered this industry indispensable.

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