Businesses concerned about impact of urbanization on logistics operations

Nearly all companies are concerned about how urbanization will impact business growth and sustainability, with less than half feeling up to the challenges it will pose to logistics and business operations, according to a new study.

“The Road to Sustainable Urban Logistics,” a study by global logistics company United Parcel Service (UPS) and the Greenbiz Group, reveals that only 47% of survey respondents said they feel prepared to address the associated business challenges of urbanization.

Further, respondents cite air quality (58%) and traffic congestion (53%) as top concerns over other urban challenges.

Other issues mentioned are convenience of public transportation, safety, and noise.

Meanwhile the two biggest barriers to more efficient and sustainable urban logistics are insufficient collaboration across sectors, including government (65% of respondents), and lack of critical infrastructure (64%).

Other notable barriers identified by respondents are lack of investment in innovative solutions (56%), lack of leadership accountability (49%), governance (36%), and demand superseding capability (25%).

“This research clearly highlights the complexity of logistics operations in urban environments,” said Mark Wallace, senior vice president, global engineering and sustainability. “Increased urbanization and congestion make logistics far less predictable and harder to manage. Without implementing innovative solutions supported by technology and logistics ingenuity, we run the risk of increasing congestion and emissions-we need solutions, and collaboration is the key.”

Moving goods is an essential function to support businesses and residents, and a fundamental source of economic growth in cities. Access to e-commerce is part of what makes alternative transportation modes and walkable urbanism a viable choice. At the same time, transportation and delivery can contribute to pollution and gridlock, and can be challenging for companies both large and small to manage sustainably.

When asked how the rise in e-commerce, increased urbanization, and congestion have affected how they conduct business in urban areas, 81% of survey respondents noted some form of impact on their business, such as the ability to meet e-commerce customer expectations (33%), make deliveries to retail locations (32%), meet city requirement for emission levels (31%), overcome deliver challenges resulting from city transportation regulations (30%), and surmount challenges to deliveries to residential customers.

According to UN projections, continuing population growth and urbanization are projected to add 2.5 billion people to the world’s urban population by 2050. The study offers insights on strategies and pilot projects being explored to better manage the movement of goods in cities, now and in the future.

The results point toward data-driven technologies that increase efficiencies and reduce traffic, renewable and alternative energy and fuels that help address air quality issues, the accurate measurement and management of carbon emissions, and supply chain optimization.

The real difference-maker, though, isn’t any single piece of technology. It’s the commitment to partner with cities, academics, and other business leaders to develop solutions together.

“While progress is certainly underway, no one entity can tackle the challenge of building and implementing the future needs of sustainable cities,” said John Davies, GreenBiz Group’s vice president and senior analyst.

“Smart collaborations, continued research and investments in infrastructure will remain critical to meet the logistical and environmental demands cities face. Driving policy discussions and decisions based on data is essential to ensuring operational efficiencies for companies and preserving a desirable quality of life for city dwellers.”

The majority of survey respondents (63%) believe businesses’ role is critical to accelerating, piloting, and adopting innovative approaches to creating more sustainable urban environments. And an overwhelming 72% want to work closely with city officials to do so. -- www.portcalls.com