Focus on a sustainable business model

City Delivery was started in autumn 2012 as part of efforts to reduce the number of delivery vehicles in Gothenburg’s city centre. The concept involved the transfer of goods from trucks to electric vans and electric delivery cycles at a central terminal, for consolidation and transport to the heart of the city. The objective of the Urban Transport Administration was, “To minimize heavy transport within the area after 10 o’clock in the morning.” Now, two years later, the majority of larger goods transfers take place before 10 AM. By coordinating deliveries from different suppliers, delivery distances for goods went down by more than 70% and the number of vehicle hours in the city centre fell by about 25%. Environmental benefits are twofold – a 100% reduction in emissions and quieter streets.

Since it started, City Delivery has focused on a sustainable business model. Initially, deliveries were made to eight shops a day. Since spring 2013 City Delivery has expanded its operations to include deliveries to more new streets and businesses, and in early 2015 it will start a goods collection service. Currently, over 300 packages a day are delivered from different transport companies to various recipients, using two electric vehicles with trailers and two electric delivery cycles. The transport companies pay per parcel or delivery, which covers approximately half the cost of operations.

Efforts to identify new business opportunities and develop new City Delivery services are underway, as is work to identify groups which may be interested in these developments. At present,  space on City Delivery vehicles, trailers and cycles is available for marketing purposes  and sales have  generated significant income for the business. One other future development may involve a re-cycling company becoming a business partner. City Delivery will continue to require a certain amount of operational support from the City of Gothenburg Urban Transport Administration next year but it is expected to pay its own way in 2016.

Ground-breaking demonstration projects like City Delivery are important in establishing the feasibility of alternative solutions. Ultimately, regulations and incentives are crucial when planning goods distribution in a particular area and in planning the types of vehicles involved. Future development requires clear plans for the drawing up of regulations and incentives, and the project should also be involved in future traffic scenarios. In Gothenburg, this work has started and will be stepped up during 2015.

Even if the overall effects of the City Delivery project are limited, evaluation shows that coordinated goods distribution can be in the interests of all parties and so has the potential to contribute to sustainable goods transport solutions in towns. The greatest opportunities lie in sensitive urban areas where goods traffic is currently associated with major social and financial costs and where many shops and businesses, located in limited areas, receive multiple deliveries. Pedestrian-only areas with many small, independent shops are one example. Densely-populated, residential areas which have lots of cafés and restaurants are another. In places like these there is great potential for more efficient goods transport and delivery, benefitting both delivery companies and recipients. Profits can contribute to the costs (for the terminal, goods handling, vehicles, IT etc.) associated with a coordinated system of goods distribution, and hence to a sustainable business model.

Other consequences of the project include an increased awareness of how goods are transported in the city centre, the involvement of new interested parties and improved accessibility for goods traffic. The process of testing new solutions has proved valuable, demonstrating the importance of long-term thinking, good communications and gradual implementation.

The City of Gothenburg received a special commendation in Shift 2014, a system which ranks transport solutions in Swedish municipalities, for its innovative transport measures and for the City of Gothenburg’s City Delivery project.

“It’s great that our work for sustainability has attracted attention. We really want the measures to awaken interest and be noticed,” says Anette Thorén, of the Gothenburg City Urban Transport Administration.

What people say:

 “We are pleased with City Delivery and have chosen to continue. This can be really big, nobody knows for sure but we must continue in order to find out. “ (Ulf Hammarberg, Environment specialist at DHL)

 “The collaboration has worked really well. The project is under continuous development and quality has been high, with no customer complaints. We need fewer vehicles in the centre of Gothenburg.” (Håkan Schiller, Manager for Transport and Vehicle fleet, PostNord)

 “I’m pleased with City Delivery. It’s especially good for us in our location, where traffic has sometimes been bad and blocked our entrance. I think it works smoothly and we would gladly get all  our deliveries through them.“ (Spiros Tserpelis, restaurant owner, Ma Cuisine)

” It’s really good when they come in their nice little vans. Sometimes we get deliveries several times a day and so far it’s worked well.” (Annica Ericsson, Almedalsmagasinet)

Anette THORÈN, City of Gothenburg