An Evaluation of Urban Consolidation Centers Through Continuous Analysis with Non-equal Market Share Companies

Abstract

This paper analyzes the logistic cost savings caused by the implementation of Urban Consolidation Centers (UCC) in a dense area of a city. In these urban terminals, freight flows from interurban carriers are consolidated and transferred to a neutral last-mile carrier to perform final deliveries. This operation would reduce both last-mile fleet size and average distance cost. Our UCC modeling approach is focused on continuous analytic models for the general case of carriers with different market shares. Savings are highly sensitive to the design of the system: the increment of capacity in interurban vehicles and the proximity of the UCC terminal to the area in relation to current distribution centers. An exhaustive collection of possible market shares distributions are discussed. Results show that market shares distribution does not affect cost savings significantly. The analysis of the proposed model also highlights the trade-off between savings in the system and a minimum market share per company when the consolidation center is established.