Collaborative models can transform urban delivery and reduce carbon footprint: Here's how

A new study published in the World Electric Vehicle Journal reveals how cities can tackle one of their most persistent challenges, last-mile freight delivery, through collaboration-driven logistics models. It presents a framework that could significantly reduce environmental impact while improving operational efficiency across supply chains.

The study, titled "Towards Sustainable Urban Freight: A Collaborative Business Model Framework for Last-Mile Consolidation Centres," proposes a structured approach to integrating collaboration into freight logistics by redesigning business models around shared goals, incentives, and governance systems.

Consolidation centres show strong potential to cut emissions and improve efficiency

Urban freight transport accounts for a substantial share of traffic-related emissions and congestion, with freight vehicles contributing significantly to urban mobility challenges. The study positions freight consolidation centres as a key solution, enabling goods from multiple suppliers to be grouped and delivered through optimized last-mile routes.

The research is based on a real-world pilot conducted in Gothenburg under the REDIG project, where a consolidation centre was tested using both traditional and electric vehicle fleets. The results demonstrate a dramatic shift in delivery efficiency. Over a six-month period, 576 inbound deliveries were consolidated into just 68 last-mile trips, reflecting an 88 percent reduction in delivery journeys. This translated into thousands of kilometers saved and a measurable drop in carbon emissions.

The efficiency gains stem from improved load factors, reduced empty running, and optimized route planning. Instead of multiple vehicles making separate deliveries across the city, goods are aggregated and dispatched in fewer, more efficient trips. Deliveries are also scheduled during off-peak hours, reducing congestion and improving reliability.

In addition to operational gains, the study highlights significant environmental and social benefits. Reduced vehicle traffic leads to lower emissions, less noise pollution, and improved urban livability. For cities pursuing climate neutrality targets, such systems offer a practical pathway to achieving measurable impact.

Businesses receiving goods also benefit from fewer deliveries, streamlined internal logistics, and access to additional services such as short-term storage and reverse logistics. These efficiencies free up space and reduce administrative burdens, making consolidation centres attractive not only from a sustainability perspective but also from a business standpoint.

However, the study makes clear that these benefits are contingent on effective collaboration among stakeholders—a factor that remains one of the most challenging aspects of implementation.

Collaboration barriers and economic tensions slow adoption

Despite the strong performance indicators, the pilot project revealed a complex set of challenges that hinder the widespread adoption of consolidation centres. Chief among these is the difficulty of aligning multiple stakeholders with differing priorities, cost structures, and operational models.

The freight ecosystem involves logistics service providers, suppliers, receivers, and municipal authorities, each with their own objectives. While collaboration can improve efficiency and reduce costs at a system level, individual actors may be reluctant to share resources, data, or control. Competitive dynamics within the logistics industry further complicate efforts to establish joint operations.

One of the most significant barriers identified is economic imbalance, particularly in relation to the use of electric vehicles. While EVs offer clear environmental advantages, they come with higher upfront and operational costs compared to traditional diesel fleets. This creates tension between sustainability goals and financial realities, as some stakeholders are unwilling or unable to absorb the additional costs.

Pricing models also emerged as a critical issue. In the pilot, costs were distributed based on pallet usage, but this approach disproportionately affected participants with higher volumes or different delivery profiles. The lack of a fair and transparent cost-sharing mechanism undermined trust and limited the willingness of some actors to fully engage in the system.

Operational challenges further complicated implementation. These included low initial volumes, which reduced the efficiency of consolidation; lack of integration between IT systems, leading to manual coordination and inefficiencies; and disruptions caused by existing contracts and procurement processes that limited flexibility.

The study also highlights behavioral and organizational barriers. Stakeholders were often hesitant to change established routines, and protective behavior around data and business relationships slowed decision-making. In some cases, potential participants opted out of collaboration altogether, preferring to maintain control over their logistics operations.

These findings underscore a key insight: while the technical feasibility of consolidation centres is well established, their success depends heavily on addressing human, organizational, and economic factors.

A new collaborative business model framework for sustainable logistics

To overcome these challenges, the study introduces a novel collaborative business model framework designed to integrate cooperation directly into the structure of urban freight systems. This framework extends the traditional business model canvas by incorporating new elements specifically focused on collaboration.

Key to the framework is the concept of outcome-based partnerships, where stakeholders align around shared goals rather than individual transactions. This approach shifts the focus from short-term cost minimization to long-term value creation, encouraging innovation and continuous improvement.

The model introduces several key components, including forms of collaboration, pricing mechanisms with incentives, and the distinction between monetary and non-monetary value. Monetary value includes revenue streams from logistics services, while non-monetary value encompasses environmental and societal benefits such as reduced emissions and improved urban quality of life.

The framework also outlines five critical success factors for collaboration: reciprocity, transparency, trust, shared vision, and performance measurement. These principles are essential for building sustainable partnerships and ensuring that all stakeholders benefit from participation.

A particularly important aspect of the model is the emphasis on governance. The study identifies the need for a neutral third-party coordinator to manage collaboration, facilitate data sharing, and ensure fair distribution of costs and benefits. This entity would play a central role in maintaining trust and aligning the interests of diverse actors.

The research further highlights the importance of integrating collaborative practices into the business models of individual stakeholders. This requires not only aligning objectives but also adapting organizational processes, contracts, and performance metrics to support shared goals.

Another key innovation is the inclusion of incentive-based pricing models. By linking financial rewards to performance outcomes, such as efficiency gains or emission reductions, the framework encourages stakeholders to contribute actively to the success of the system.

The study also explores the role of policy and regulation in supporting collaborative logistics. Municipalities can play a crucial role by setting environmental targets, providing incentives for sustainable practices, and creating regulatory frameworks that facilitate cooperation.

Scaling sustainable urban logistics requires systemic change

Transforming urban freight systems requires more than technological innovation. It demands a systemic shift in how logistics operations are organized, governed, and incentivized.

While consolidation centres offer clear benefits, their scalability depends on achieving critical mass, integrating digital systems, and establishing robust governance structures. Without sufficient volume, the efficiency gains of consolidation cannot be fully realized, limiting both economic viability and environmental impact.

The study also reinforces calls for long-term commitment from stakeholders. Building trust, aligning objectives, and institutionalizing collaborative practices are processes that take time and sustained effort. Short-term pilot projects can demonstrate feasibility, but lasting change requires deeper integration into existing systems.

Electric vehicles, while essential for reducing emissions, introduce additional complexity that must be addressed through innovative business models and supportive policies. Balancing cost and sustainability remains a central challenge for the industry.