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Impacts of Urban Congestion in Supply Chains

Pablo Guerrero, Senior Transport Specialist, IDB

Presented at Transforming Transportation 2017

Pablo Guerrero

Senior Transport Specialist

INTER-AMERICAN DEVELOPMENT BANKImpacts of Urban Congestion in Supply Chains

Transforming Transportation 2017

January 13, 2017

Content:

1. Urban freight challenges

2. Methodology

3. Results

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5

10

15

20

25

30

35

40

45

50

- 25 50 75 100 125 150 175 200

Mo

tori

zati

on

. M

illio

n v

eh

Population. Million inhab

BR

MX

AR

CO

PE

CH

Relevance of cities:

Concentration and

urbanization

+60% of GDP

+80% population

Why congestion is important for supply chains?

Why congestion is important for supply chains?

Because it increases logistics costs in cities…

Why congestion is important for supply chains?

• Urban mobility is complex and is in high demand

• Large population to be served

• Excessive motorization, emissions, and fuel consumption

• Lack of freeways and low road capacity

• Large concentration of urban population in LAC

• Urban planning: “still a pending task”

Because it increases logistics costs in cities…

Why congestion is important for supply chains?

• Urban mobility is complex and is in high demand

• Large population to be served

• Excessive motorization, emissions, and fuel consumption

• Lack of freeways and low road capacity

• Large concentration of urban population in LAC

• Urban planning: “still a pending task”

Because it increases logistics costs in cities…

However, cities are key to any country logistics performance…

Why congestion is important for supply chains?

• Urban mobility is complex and is in high demand

• Large population to be served

• Excessive motorization, emissions and fuel consumption

• Lack of freeways and low road capacity

• Large concentration of urban population in LAC

• Urban planning: “still a pending task”

• Consumption centers

• Logistic nodes

• Industrial clusters

• Value-added and services

Because it increases logistics costs in cities…

However, cities are key to any country logistics performance…

The lack of urban

freight studies in LAC

restricts the ability to

manage and reduce

congestion

Content:

1. Urban freight challenges

2. Methodology

3. Results

Economic development:

Productivity & urban

mobility

Methodology congestion costs:

Design

Methodology implementation:

Local university

Implementing universities during pre-pilot face in

Barranquilla, Sao Paulo, and Santiago

Implementation Committee:

Coordination and decision

makingExample for Bogota DC, Colombia

Strategic alliance

Economic development:

Productivity & urban

mobility

Methodology congestion costs:

Design

Methodology implementation:

Local university

Implementing universities during pre-pilot face in

Barranquilla, Sao Paulo, and Santiago

Implementation Committee:

Coordination and decision

makingExample for Bogota DC, Colombia

Reliability and

comparability

Grounded on

stakeholders’

needs and

collaboration

Ensures

continuity, data

anonymity, and

further analysis

Strategic alliance

• Low cost

• Allows for continued data collection (every week or month) and trend analysis

• First and Last mile assessment

• Comparative analysis of logistics and transport nodes

• Access roads or urban corridors

Methodology highlights

Methodology highlights

• Low cost

• Allows for continued data collection (every week or month) and trend analysis

• First and Last mile assessment

• Comparative analysis of logistics and transport nodes

• Access roads or urban corridors

• Low cost

• Allows for continued data collection (every week or month) and trend analysis

• First and Last mile assessment

• Comparative analysis of logistics and transport nodes

• Access roads or urban corridors

• Retail based (receivers and suppliers)

• “Basic goods” retail price as proxy of cost of living

• Own and hired fleets plus aleatory location

Methodology highlights

Premisas de la metodología

• Toma de datos dinámica y de bajo costo

0

1

2

3

4

5

6

0 10 20 30 40 50 60

Tim

e (

Ho

urs

)

Distance (km)

Stops (break?, lunch?,

congestion?, delivery?,

receiver delays?)

Speed: about 20 kph

Speed:

about 2 kph

• Travel Congestion Index:

o TCI = (Actual delivery cost) / (Delivery costs in free flow)

Impact On supply chains

• Buffer Time Index (BTI):

o Buffer Time Index: the amount of extra "buffer" time needed to be on-time 95 percent of the time

o Economic value of the BTI

Reliability

• Intrinsic VOT of cargo (I-VOT):

o I-VOT = (Opportunity cost of capital)* (Average cargo value)*(Average Delays)

Impact In the recipients

Results {methodology metrics}

Cities within the same

country will generate

a national model for

comparative analysis

Content:

1. Urban freight challenges

2. Methodology

3. Results

Barranquilla, Colombia Santiago de ChileSão Paulo, Brazil

Pilot application

Participating receivers and suppliers

Pilot application results

Pilot application results

Pilot application results

Congestion Cost Impact

Congestion Cost Impact

TCI Visualization

Fuel consumption

Fuel consumption

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Thank you