On Decarbonizing City Logistics: Analytical Models for Sustainable Package Delivery and Pickup

Abstract

City logistics significantly contributes to greenhouse gas emissions (GHGs) due to the extensive use of conventional vehicles. GHGs are the main driver of climate change (CC) and reducing them is essential to achieving greener cities. Following a comprehensive literature review on decarbonizing city logistics (DCL), this study proposes a two-stage mathematical model for last-mile business-to-customer (B2C) e-commerce operations. The first stage of the model assigns customers to the nearest parcel locker (PL) to optimize zoning. The second stage is formulated as a variant of the vehicle routing problem (VRP) that addresses a critical gap in the DCL literature by considering home deliveries, package returns, and missed deliveries simultaneously while utilizing PLs. We evaluated the proposed model regarding quadruple bottom line pillars (QBL) of sustainability—environment, economy, society, and culture. A benchmark model is also developed to evaluate the proposed model’s results. Our findings indicate that implementing the proposed model could reduce CO2 emissions by 17% and operational costs by 9%. Furthermore, our model offers several social and cultural benefits. We conclude the study by discussing future research directions.