Evaluating Distribution Costs and CO₂-Emissions of a Two-Stage Distribution System with Cargo Bikes: A Case Study in the City of Innsbruck

During the last years, e-commerce has grown rapidly. As a result, the number of parcel deliveries in urban areas is increasing, which affects the inner-city traffic and leads to congestion and air pollution, thereby decreasing the quality of life in cities. City administrators and logistic service providers have been working on the optimization of parcel distribution in order to alleviate congestion and reduce the negative impact on the environment. One of the solutions for environmentally friendly parcel distribution are two-stage distribution systems with city hubs. City hubs are facilities located close to the delivery area which are used as an enabling infrastructure to store and consolidate the parcels. For the last mile delivery from the city hub to final customers, zero emission vehicles, such as cargo bikes, can be used. Many studies have been conducted on this topic in recent years. This paper contributes to this research area by evaluating the implementation of such a two-stage distribution system with a city hub and cargo bikes in Innsbruck, Austria. The goal is to determine the best location for a city hub and the composition of the delivery fleet by minimizing the total distribution and CO2-emission cost. E-vans are used for the first and cargo bikes for the second stage of the parcel delivery. The problem is modeled as a vehicle routing problem with multiple trips and is solved in ArcGIS Pro, using the built-in routing solver. The analysis shows that all hub candidates provide comparably good results, with one potential station, the main station, showing the highest improvement compared to the basic system, with delivery by conventional vans. Savings in distribution costs of up to 30% can be achieved. Furthermore, by taking into account both indirect and direct emissions with a well-to-wheel approach, CO2-emissions can be reduced by 96%