public procurement as game changer in citylogistics

PUBLIC PURCHASING AS GAME CHANGER IN SMARTER AND CLEANER URBAN FREIGHT DISTRIBUTION

URBE Conference 1 and 2 October 2015 Rome, Italy

Susanne Balm Project leader E-mobility & City Logistics Amsterdam University of Applied Sciences

Co-authors: Walther Ploos van Amstel (AUAS) Luke Mackaay (AUAS) Daniel Schulz (AUAS)

AMSTERDAM UNIVERSITY OF APPLIED SCIENCES

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•  Based in Amsterdam, The Netherlands •  50,000 students and 3,600 employees •  80 bachelor and master programmes

•  Practical orientated research addressing real-life challenges •  Close collaboration with both academics and professionals •  A joint Executive Board with the University of Amsterdam

RESEARCH PROGRAM URBAN TECHNOLOGY Technologies for a sustainable, liveable and connected city

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Smart Mobility & Logistics

Smart Urban Design

Smart Energy Systems

Circular Design and Smart Production

Urban analytics

Business Models

PUBLIC ORGANIZATIONS CAN ACT AS GAME CHANGER IN SMARTER AND CLEANER URBAN FREIGHT For two reasons:

1.  Product characteristics •  High volume and homogenous goods

2.  Characteristics of the organization •  Public organizations can benefit directly from sustainable transport as it

contributes to their own objectives: accessibility, healthy living, being a role model in terms of social responsibility.

4 Volume and direct benefit are missing in many small scale city logistics initiatives

PRACTICE WHAT YOU PREACH •  How many freight deliveries do we generate with our purchases?

•  A lot! Difficult to quantify adequately, but expected to be > 60.000 a year

•  Do we favor sustainable transport? •  Yes, as it improves livability around the campuses

•  Do we want to be a role model? •  Yes! We want to be a sustainable organization.

•  How can we stimulate sustainable transport as public organization? •  Research has identified potential solutions

•  How do we get there? •  Behavioral change

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Amsterdam University of Applied Sciences •  50.000 students •  3.600 employees

TWO EDUCATIONAL ORGANIZATIONS

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University of Amsterdam •  32.000 students •  5.000 employees

CHARACTERISTICS

•  Many different buildings in City of Amsterdam •  Many purchasers •  A lot of development going on: renovation and construction •  Underutilized inventory spaces in buildings at city border, but

scarcity in inner city •  Mail delivery roundtrips between buildings

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PREVIOUS RESEARCH (END OF 2014) •  Questionnaire to suppliers | respons of 278

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THREE POTENTIAL SOLUTIONS

1.  Consolidating at the source

2.  Change of purchase policies

3.  Delivery at a central address

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HAVE BEEN SUBJECT OF RESEARCH (FEB – JUNE 2015)

POTENTIALLY MORE SUSTAINABLE

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But what are the opportunities and challenges for realising the solutions?

All three solutions can potentially reduce transport movements, associated pollution and costs.

LITERATURE STUDY

The decisions of purchasers determine whether the full potential of GPP is used. Their behavior is considered to be a critical success factor.

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Corporate social responsibility

Green public procurement (GPP)

Logistics as GPP criteria

Amount of available research

1. CONSOLIDATING AT THE SOURCE Aim Various suppliers consolidate the transport of their

deliveries upstream in the distribution network

Stakeholder group(s) with a lead role

•  Supplier •  Logistis service / transport provider

Opportunity Suppliers seem to be willing to discuss the possibilities, be transparent, and cooperate.

Challenge •  Transport operators that currently carry out the transport seem to be less willing to cooperate and to share data. They fear a loss of business.

•  Influence of purchasing organization is limited as agreements already exists between supplier and transport operator.

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2. CHANGE OF PURCHASE POLICIES Aim Take logistics considerations into account in tender

procedure


Receiver

Opportunity Use next tender(s) to start with new strategy and include “green and efficient transport” as selection criteria

Challenge •  To make sure that employees in purchase or procurement functions at a tactic/operational level act in line with the policy.

•  To incorporate potential side effects for existing transport networks.

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3. CENTRAL DELIVERY ADDRESS Aim Using a central delivery address for the deliveries to

UvA-AUAS that allows to consolidate the last mile (using low emission vehicles)


•  Receiver •  Supplier •  Logistics service / transport provider

Opportunity •  Use of existing inventory space •  Synergies on city level when broad city distribution

center (with multiple functions) is used. The volume of the public organization can make current UCC initiatives (more) viable.

Challenge •  To obtain transparent data required to share costs and benefits and consensus on invoicing tool

•  Logistics knowledge is required to efficiently use the central delivery address without loss of service. 14

IMPACT ON PURCHASE DECISIONS

•  Strategic purchasing: set objectives with regard to transport and logistics

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JOINT COMPARISON 1. Consolidating deliveries at the

source

2. Change purchase policy

3. Central delivery address

Strategic decisions

Who should initiate/lead the change? What are the (common) objectives?

How to develop green delivery criteria in tender procedures?

Who should initiate/lead the change? What are the (common) objectives?

Tactic decisions

How the select the appropriate partners? How to redistribute costs and benefits in contracts?

How to assess green delivery criteria of suppliers?

How the select the appropriate partners? How to redistribute costs and benefits in contracts?

Operational decisions

How to make sure that transport data is shared?

How to monitor the criteria in practice?

How to make sure that the hub address is used?

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CONCLUDING REMARKS

•  The environmental and social impact caused by the transportation of products is highly neglected in GPP.

•  Considering the buying power of public organizations, they could act as game changer in the implementation of urban freight solutions.

This requires several changes: •  Strategic level: clear objectives (and scope) should be set. E.g. air

quality, CO2, transport movements •  Tactical level: suppliers should be selected based on these criteria.

Lead buyers, involved in tender procedures, need assessment guidelines •  Operational level: employees should be committed to act in favor of

green logistics criteria. How to create understanding? How to monitor results? 17

THANK YOU

Questions and discussion

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Susanne Balm Project leader E-mobility & City Logistics Amsterdam University of Applied Sciences [email protected] www.hva.nl/urbantechnology