Exploring conditions for economic sustainability of city hubs adoption in urban logistics - a system dynamics approach

Transport-related externalities have a negative impact on urban environments and health. Therefore, urban logistic systems encounter significant sustainability challenges. One urban transport strategy is city hubs, which can achieve a more effective system. However, city hubs have yet to realize their full potential due to the challenges of their implementation. This paper investigates the dynamics of city hub implementation from the perspectives of the Logistic Service Providers (LSPs), the hub operator and the receivers of the goods. Drawing from qualitative and quantitative insights from a case study in Stockholm, a system dynamics model is built to understand these dynamics. The results of this model demonstrate that the city hub is economically sustainable only if collaboration is achieved between LSPs and receivers. However, the total system cost increases with collaboration. When collaboration cannot be achieved, the public sector’s involvement is crucial to achieving hub adoption. The results also show that implementing an environmental zone (internal combustion engine vehicles are forbidden entry) does not help hub adoption, as the share of the LSPs cost spent on vehicles is low compared to other costs. Therefore, policies favoring the actors involved in the scheme should be considered. The main contribution of this paper lies in identifying possible strategies and outcomes of city hub implementation within the studied area and providing guidance for policymakers on policies for successful implementation. Moreover, the model can be adapted to other case studies by adjusting the input data, thereby serving as a tool for policymakers in different geographical contexts.