Framework for Physical Internet deployment in cities

ABSTRACT

Urban freight logistics is a complex interaction of stakeholders, technology, and infrastructure that shapes the dynamics of city logistics networks. The need for efficiency, flexibility, and sustainability in urban logistics is paramount due to the unpredictability of order patterns and the dispersed nature of delivery points. However, traditional approaches often result in isolated stakeholder operations and limited collaboration, leading to underutilized resources and duplicated efforts. This paper proposes a framework for the operation of the Physical Internet (PI) in logistics, which aims to break down silos and foster collaboration to minimize environmental impact in cities. The PI envisions standardized, interconnected logistics operations akin to digital packets moving through a network of hubs. Collaborative distribution networks in urban freight and the PI share the goal of transforming isolated operations into interconnected systems. The symbiotic relationship between these concepts offers a promising solution to achieve sustainable, efficient urban logistics systems. The integration of the Physical Internet Framework and the Sustainable Urban Logistics Plan holds the potential to usher in a transformative era of collaboration, efficiency, and environmental responsibility, paving the way for a more sustainable future.

KEYWORDS:

• Physical internet
• city logistics
• urban logistics
• physical internet for cities
• physical internet in cities
• physical internet framework

1. Introduction

Urban freight logistics involves a range of key players, including providers, users, enablers, and legislators, each contributing to the complexity of city logistics network composed of people, goods, vehicles, infrastructures, and terminals that collectively shape the dynamics of urban logistics. Efficiency, flexibility, and sustainability are pivotal in urban logistics due to the inherent unpredictability of order patterns and the dispersed nature of delivery points. The urban landscape is a convergence of complex networks connected with various actors, technologies, and regulations. However, traditional approaches to city management often lead to isolated stakeholder operations with minimal communication and collaboration. This siloed mindset results in underutilized resources, duplicated efforts and limited problem-solving capabilities across the city’s functional spectrum. Stakeholders tend to prioritize individual objectives, neglecting broader synergies that collaboration could offer. This can impede effective communication, coordination, and adaptive responses to evolving challenges, hindering innovation and stifling creativity. To counter this, a shift towards a culture of openness and collaboration is imperative. Encouraging information and asset-sharing, fostering cross-functional teamwork, and establishing effective communication channels among various city actors are essential to overcome these limitations. The aim is to transform the city’s approach from individualistic to collaborative, facilitating better adaptation to changes, problem-solving, and market dynamics. The essence of the Physical Internet (PI) lies in breaking down silos and fostering collaboration across the logistics landscape (Shaposhnikova, 2017). PI envisions standardization, modularization, and interconnectedness as the driving forces behind optimized logistics operations. PI-containerization, akin to digital packets, ensures goods are transported efficiently using standardized containers that seamlessly navigate through a network of interconnected hubs. The concept also emphasizes real-time matching of supply and demand information to optimize vehicle allocation routes and loading efficiency. Flexible route planning and visualization of supply and demand data are expected to enhance logistics resilience in the face of disruptions. Physical Internet operates on the basis of standardization and so the basic components are standardized hubs, packages, protocols and networks. The concept extends beyond logistics, influencing the entire supply chain, including production and distribution. This integration can optimize supply chain management, reduce waste, and enable flexible production base placement. The Physical Internet encourages a holistic approach to supply chain management. If the efforts are successful, the supply chain will be rationalized, and the coordination and integration of production and logistics will be accelerated (Montreuil, 2011). This innovative freight system design and implementation of it in cities, are crucial for addressing the net-zero emissions challenge in the transportation sector. Table 1 presents main benefits from introducing PI.

Table 1. Benefits of PI.

Benefits of PI	Description
Increased resilience	Enhances supply chain resilience by allowing goods to be rerouted through various pathways, mitigating the impact of disruptions like natural disasters or geopolitical issues.
Energy conservation	Optimizes logistics processes, leading to energy conservation by reducing empty trips and minimizing congestion. Results in lower fuel consumption and overall energy usage.
Greenhouse gas reduction	Leads to lower greenhouse gas emissions through reduced energy consumption and use of more efficient transportation modes, helping mitigate transportation’s impact on climate change.
Optimizing logistics processes	Standardizes cargo units and promotes intermodal transportation, leveraging data-driven decision-making. Results in faster transit times, reduced handling costs, and improved efficiency.
Resource sharing and consolidation	Encourages collaboration and resource sharing, minimizing waste and inefficiencies. Enables sharing of transportation resources, warehouses, and distribution centers for more efficient asset utilization.
Enhanced efficiency	Aims to create an efficient, interconnected logistics network. Optimizes routes, removes bottlenecks, and reduces waiting times, ensuring swift, cost-effective goods movement.
Enhanced sustainability	Promotes sustainability by optimizing transportation resource use, reducing energy consumption, and minimizing environmental impact. Transforms traditional logistics into more sustainable, interconnected systems.

Source: Own elaboration based on Sternberg and Norrman (2017).

The concepts of collaborative distribution networks in urban freight and the Physical Internet share a common goal: transforming traditional, isolated operations into harmonious and interconnected systems. While collaborative city logistics aim to integrate stakeholders and enhance sustainability, the Physical Internet restructures global logistics into an efficient and interconnected network. Figure 1 presents problems of city logistics that may be solved by implementing the PI.

Figure 1. City logistics problems vs problems that can be solved by implementing of PI.

Source: Own elaboration based on Montreuil (2011).

The objective of this paper is to present a proposal for integrating the Physical Internet concept into urban goods distribution systems. This involves developing a comprehensive framework that applies the principles of the Physical Internet to city logistics on the basis of ready-made tool: the Sustainable Urban Logistics Plan. The proposed framework aims to address common urban logistics challenges, such as traffic congestion, high emissions, and inefficient resource utilization, by leveraging the interconnected and optimized nature of the Physical Internet. This approach seeks to transform traditional urban logistics into a more agile, resilient, and eco-friendly system, aligning with the broader goals of sustainable urban development.

2. Literature review

City logistics (CL) seeks to optimize logistics operations in an urban area, while PI aims to create an interconnected, standardized, and efficient global logistics system. Although the Physical Internet is a concept that is only a decade old and the literature in this field comprises only several dozen publications, many authors already see the field of city logistics as a prime area for the development of PI with significant potential. Numerous authors outline specific model proposals in which urban deliveries could operate based on the PI concept. Below is a review of selected ones.

Crainic and Montreuil (2016) propose a Hyperconnected City Logistics (HCL) is proposed as the integration of CL and PI, emphasizing efficient freight networks that align with urban planning. It envisions a system of urban multimodal hubs, standardized containers, and distribution centers to enhance economic and environmental sustainability. City Distribution Centers (CDCs) is highlighted within CL, offering load consolidation and cross-docking facilities to enhance efficient city distribution. The potential benefits of integrating CL and PI are discussed, including efficiency improvements, emission reductions, and service enhancements. The challenges of transforming current logistics systems and aligning urban planning are acknowledged. HCL is presented as a framework that integrates various concepts, including interconnecting cities, standardization, stakeholder coordination, logistics centers, and people mobility. The authors emphasized the the synergy between freight logistics and people mobility is emphasized. And the need for research, pilot studies, case studies, and stakeholder collaboration is emphasized (Crainic & Montreuil, 2016).

Another concept of of Hyperconnected City Logistics (HCL) is proposed by Russell G. Thompson et al. (2023) and is aimed at creating collaborative and integrated distribution networks in urban areas for enhanced sustainability. It focuses on reducing costs, emissions, energy consumption, noise, and congestion by utilizing shared vehicles and warehouses. The authors discuss various performance measures to assess the sustainability of urban distribution networks. These measures include efficiency, load factors, work, laden percentage, and MNAD (average number of arrivals and departures at receivers), which provide insights into vehicle efficiency, load utilization, and network reliability. The aspects that are highlighted by authors are:

• vehicle operating costs (VOC) for different modes of transport, detailing factors such as wages, energy costs, maintenance, and usage rates that impact these costs,

• the social and environmental costs related to emissions’ impact on air quality are explored, including emissions per vehicle kilometer and vehicle kilometers traveled,

• the rates for air pollution, noise, accidents, congestion, and infrastructure costs are estimated. reliability in terms of freight movement are discussed, considering their impact on community observations and road infrastructure.

The authors highlight the significance of transfer and storage costs in urban consolidation centers, covering aspects like personnel, administration, management, equipment, and facility usage and they explore retail goods swapping and collaborative distribution networks to reduce emissions and vehicle travel distances, emphasizing the need to carefully consider trade-offs between transport and storage costs during network design (Russell G. Thompson et al., 2023).

Luo et al. (2022) proposed a solution for addressing urban logistics challenges in the context of the ‘new retail’ trend. This solution involves a two-tier city logistics system that incorporates the principles of the Physical Internet (PI). Two-Tier City Logistics Model involves sorting shipments at a Regional Distribution Center (RDC) and then transporting them to smaller City Distribution Centers (CDCs) for final delivery. The proposed solution leverages the framework of the Physical Internet (PI) to enhance urban logistics. It introduces standardized PI-containers equipped with location tracking and communication features. Tier-1 PI-vehicles are used to transport multiple containers from RDCs to PI-hubs, while tier-2 PI-vehicles carry one container from PI-hubs to end customers. PI-hubs, located at parking lots, serve as temporary transshipment points (Luo et al., 2022).

The term ‘smart city’ has gained attention as a solution to manage urban complexity. A smart city uses digital solutions to enhance the efficiency of traditional networks and services, benefiting residents and businesses. However, according to Franklin et al. (2023) many smart city projects have focused on solving specific problems with technology without integrating them into a holistic governance structure, limiting their benefits. Collaborative sharing of logistics assets and optimized vehicle routing are key aspects of the PI model, but competition among logistics companies poses challenges. The authors emphasize the need for a more integrated and comprehensive approach to managing urban complexity, incorporating principles from smart cities, cloud computing, and the Physical Internet to create more efficient and sustainable urban environments. Resistance to collaboration arises from two groups: entrenched individuals who see no reason to collaborate, and emerging resistors who lack motivation from leadership to overcome challenges. This impacts logistics collaboration and poses obstacles for implementing the Physical Internet (PI) and integrated city services. The authors propose the concept of the ‘Urban Cloud’ linking cloud computing architecture with the PI. They suggest managing city infrastructure as an on-demand service, similar to cloud computing’s Infrastructure as a Service (IaaS). This could optimize resource utilization, improve logistics, and enhance citizen services. The model envisions an ‘Urban Platform as a Service’ (PaaS) layer aggregating sensor data, managing infrastructure, predicting future use, and resolving conflicts. This PaaS layer enhances city resilience by providing real-time insights and rapid responses to disruptions (Franklin et al., 2023). The arguments that may convince stakeholders to engage in collaboration are presented in Table 2.

Table 2. Motive for collaboration.

Motive for collaboration	Description
Cost pressure	Businesses focus on reducing logistics, storage, and handling costs for competitive advantage and efficient operations.
Logistics resource access/expansion	Gaining access to enhanced logistics resources and capabilities through network management and collaboration.
Competitive pressure	Adapting to changes in logistics due to competition, and forming collaborations to remain competitive.
Policies and regulations	Navigating regulatory guidelines to transition to greener transport activities and more flexible operations.
Know-how access	Accessing innovative technologies and knowledge in logistics processes for collaborative improvement.
Flexibility requirements	Increasing efficiency and flexibility in logistics operations like hub utilization and cargo transport.
Network/Market expansion and internationalization	Expanding business horizons to access new markets and resources, often internationally.
Integration and collaborative business strategy	Focusing on collaborative practices for integration in supply chains for competitive advantages like predictability and flexibility.
Innovation and business model development	Developing innovative solutions and business models for competitive advantage and customer-oriented services.

Source: Own work based on (Plasch et al., 2021).

Brusset and Suarez (2023) describe the project URBANE that aims to enhance social welfare in European cities by improving last-mile delivery of e-commerce parcels. The authors discuss different operating models for last-mile parcel delivery in urban areas:

Model 1 - Administrative Fiat in which a city takes control of package exchange, microhubs, and the last mile. It owns microhub real estate and applies strong regulatory authority to ensure cooperation from stakeholders.

Model 2 - Provision of Infrastructure in which a city operates the package exchange and microhubs, but 3PLs handle the last mile delivery. The 3PLs have their delivery vehicles, and the city invests in infrastructure while charging 3PLs for usage. The city may enforce participation to ensure adoption.

Model 3 - Market Regulated with Private Operators. In this scenario, a neutral third party operates the package exchange, while 3PLs manage microhubs and last-mile delivery. Microhub real estate ownership is private, and there is no strict city regulation. Coordination between 3PLs, microhubs, and the delivery service is crucial for success. Each model presents various implications for parcel delivery in city centers.

The authors emphasize the importance of clear rules, investment in eco-friendly vehicles, and the need for coordination between stakeholders. The operating model can evolve over time as technology and citizen behavior change (Brusset & Suarez, 2023).

Other concepts in literature include:

• The potential of collaborative planning enabled by a logistics system supporting the Physical Internet in an urban area, which operates as a hub for freight transportation with multiple e-commerce warehouses (Bae et al., 2022).

• The concept of the Internet of Perishable Logistics (IoPL) for the distribution of perishable commodities, presents a layered architecture model based on the cyber Internet, and explores the synergies between IoPL and the cyber Internet, highlighting research opportunities arising from these synergies (Pal & Kant, 2019).

• In the innovative field of Physical Internet, the development of efficient PI-cross-docking hubs allowing quick, efficient and flexible transfer of containers will be a cornerstone(Saliez et al., 2015).

• An optimization model for the collaborative organization of deliveries in an n-tier hyperconnected city logistics system, specifically focusing on the tactical planning of services within the first tier, where a coalition of carriers and logistic operators share resources and information flows to provide more effective and sustainable delivery services (Crainic et al., 2020).

• The potential of shared networks in urban areas to reduce congestion and transport costs by analyzing and modeling a system where high-capacity freight vehicles operate between Key Freight Areas, addressing the inefficiency of general freight transportation within large metropolitan areas (Thompson et al., 2020).

• The perspectives of transport service providers in Austria on horizontal collaborations and the Physical Internet, highlighting the importance of awareness and information sharing in the implementation process (Simmer et al., 2017).

• Bridging the gap by introducing a framework that integrates multi-layer decision-making and the Physical Internet methodology, focusing on the functional aspects of operational problems in City Logistics systems and optimization, with the goal of enhancing integration, cooperation, and utilization of logistic infrastructure (Kubek & Wiȩcek, 2019).

• The facility location in a physical internet environment (Herrmann & Kunze, 2019).

• Dynamic Multiple Depots Vehicle Routing to explore the feasible solution of routing transportation between PI-hubs and retailers in the same cluster (Kantasa-Ard et al., 2021).

• The potential of mobile access hub deployments for urban parcel logistics by identifying the impact of design parameters on economic and environmental performance. Results indicate design flexibility relative to the location of hubs and pronounced advantages in highly variable environments (Faugère et al., 2020).

Figure 2 presents the keywords that are most often used in connotation with each other in the reviewed literature.

Figure 2. Association between chosen keywords in the reviewed literature.

Source: Own elaboration made in VosViewer programme

3. A road to the Physical Internet as the future logistics

In today’s urban freight transport, there is a growing consensus that combining various infrastructure, organizational, and legal approaches can significantly enhance energy efficiency and reduce greenhouse gas emissions. These methods include urban consolidation centers, low-emission vehicles, and restricted access to certain city areas, like zero-emission zones or entry fees. The Physical Internet (PI) concept promotes the sharing of transportation resources among businesses. This involves efficient use of logistics warehouses and facilities, joint use of mixed trucks, and optimized cargo routing. Hyperconnected freight systems are characterized by logistic hubs for effective transfers, deployment centers for strategic goods placement, versatile modular containers, and carriers for multi-modal operations. Shared hubs allow for smooth cargo exchange, while routes and terminal networks ensure efficient delivery. PI relies on open asset sharing and flow consolidation, employing standardized protocols and interconnected networks with modular carriers. These systems are supported by monitoring systems, digital platforms, data analytics, and optimization tools for better decision-making and supply chain visibility. Successful PI implementation hinges on automation, collaboration, a common platform, standardization, and governance. Logistics automation utilizes technologies like robotics, AI, and autonomous vehicles to enhance supply chain processes including order fulfillment, inventory management, and transportation. This reduces errors and manual labor, improving efficiency, which is crucial in Europe due to truck driver shortages. The Physical Internet leverages this for potential automated deliveries. It also promotes vertical collaboration (between different supply chain stages) and horizontal collaboration (among competitors at the same stage) to improve resource sharing and efficiency, and create a more interconnected supply chain network. A central aspect of the Physical Internet is the utilization of a shared data platform accessible to all stakeholders in the supply chain. This platform facilitates real-time sharing of information, enabling better decision-making and coordination among various actors. It is a common system to which carriers, warehouse operators, transshipment center operators, and infrastructure managers will connect When we have a sufficient number of actors and information (about the available number of vehicles, vehicle locations, available loading and unloading spaces, etc.), the system can make decisions (Figure 3).

Figure 3. Left: city transport and logistics service providers connected to a common operations and traffic management system; right: simplified operation scheme of a common PI system for a city.

Source: Own work

Data transparency and accessibility help in optimizing routes, minimizing empty trips, and synchronizing operations across the network. The Physical Internet envisions a network of interconnected hubs and routes. These hubs serve as consolidation and distribution points where goods are efficiently transferred between different modes of transport. The interconnected routes, like in TEN-T network, allow for seamless movement of cargo across various transportation modes, reducing congestion and enhancing overall efficiency. Finally, standardization is crucial to address the challenges associated with transshipment (Ballot et al., 2021). Cargo exterior sizes, handling conditions, and mechanization standards need to be unified to facilitate quick and efficient processing at hubs. Just like the introduction of shipping containers that revolutionized the transport and logistics industries in several profound ways, the standardization of packaging on land is to bring same benefits. The containerization process brought about several key benefits and modularization can bring as many. Table 3 presents some of them. Containerization transformed the transportation and logistics sectors by optimizing processes, reducing costs, and expanding global trade possibilities. It’s considered one of the most significant innovations in modern shipping history and continues to shape the way goods are moved around the world.

Table 3. The benefits of packaging standardization in transport (history vs future).

	Contenerization in 1960s	Modularization in 2030s
Efficiency and Speed	Containers standardized the size and shape of cargo units, allowing them to be easily moved between different modes of transportation – ships, trucks, and trains – without the need for repackaging, which streamlined the entire logistics chain, reducing handling time and enabling faster transit times.	Modular boxes standardized in size and design allow for seamless integration into various transportation modes, enabling quick and efficient movement of goods across different networks, which will optimize logistics processes and reduce delays, enhancing overall speed and efficiency.
Reduced Labor Costs	Containerization significantly reduced the labor required for loading, unloading, and transshipment as it allowed the mechanized handling of containers which sped up these processes and required fewer workers, leading to cost savings for companies.	The use of modular boxes automates loading, unloading, and transshipment processes, reducing the need for manual labor, which cuts down on labor requirements, resulting in significant cost savings.
Minimized Loss and Damage	Containers are designed to protect goods from the elements and physical damage during transit, which reduced the loss and damage of goods.	Modular boxes are engineered to protect goods from external factors, minimizing the risk of damage during transportation, which reduces losses caused by mishandling or exposure.
Intermodal Flexibility	Containers can seamlessly transition between different modes of transportation, enabling efficient intermodal transportation.	Modularization embraces intermodal flexibility by allowing standardized units to seamlessly transition between various transportation modes and hubs, which fosters a truly interconnected supply chain where goods can move seamlessly across different networks.
Global Trade Expansion	Containerization played a significant role in the globalization of trade; the standardized system allowed for efficient and cost-effective movement of goods across long distances, opening up new markets and trading routes.	The adoption of modularization enhances global trade by facilitating efficient movement of goods across borders and regions, as standardized modules provide a cohesive system that promotes seamless trade.
Economies of Scale	Containers allowed shipping companies to build larger, more efficient vessels, which led to economies of scale, ships could carry more cargo at a relatively lower cost per unit, further driving down transportation expenses.	The use of modular boxes enables efficient utilization of cargo space and allows for stacking and optimization within transportation vehicles, which results in reduced wasted space, enabling greater economies of scale and cost-efficient transportation.
Inventory Management	Containers facilitated better inventory management for businesses as the predictability of transit times and reduced risk of damage allowed for improved planning of stock levels and supply chains.	Modularization improves inventory management by providing greater visibility into the movement of goods; real-time tracking and data-sharing capabilities ensure precise inventory control, leading to better stock planning and supply chain management.
Environmental Impact	While containerization increased the overall efficiency of cargo transport, it also had environmental impacts as ships became more efficient due to larger container loads.	Modularization in PI promotes sustainability by increasing efficiency, reducing waste, conserving energy, and rationalizing operations and also by eliminating single-use packaging through the reusability of modular boxes.

Source: Own elaboration.

The comparison presented in Table 1 highlights how modularization in the 2030s shares some fundamental benefits with containerization in the 1960s but also incorporates modern technologies and sustainability considerations to meet the evolving demands of a globalized and environmentally-conscious world. Modularity improves efficiency, flexibility, and sustainability in the supply chain and has potential to revolutionize the industry by fostering more collaborative and interconnected systems. Sternberg and Denizel (2021) analyze the design and characteristics of PI-containers and their impact on logistics efficiency, particularly in terms of container repositioning and flow imbalances in a domestic network context.

For the Physical Internet (PI) to develop equitably and transparently, governance and rule formation are crucial. This involves establishing guidelines for the network’s operation, vital in a system with multiple stakeholders like shippers, carriers, and logistics providers. Standardized rules facilitate coordinated information sharing, decision-making, and collaboration, ensuring smooth operation and equal data access, thus fostering healthy competition and innovation. Rules also help in fair distribution of benefits like cost savings and efficiency improvements among participants, based on their contributions. Governance ensures the network’s integrity, transparency, and sustainability, while also addressing potential conflicts and ensuring advantages are accessible to all stakeholders. Additionally, the social aspect of the PI, often overlooked in literature, includes raising awareness and fostering collaboration among stakeholders, educating them about the PI’s benefits, such as resilience and reduced environmental impact, and promoting it as a necessary response to global challenges. In the face of increasing global challenges such as congestion, environmental concerns, and resource limitations, there are two main approaches to address these issues, presented on Figure 4.

Figure 4. Paths for logistics development in the face of global challenges.

Source: Own elaboration

The societies need to embrace the fact that that the status quo of uncontrolled growth and fragmented logistics practices is not sustainable in the long run. A choice needs to be made between two potential paths: adopting a philosophy of degrowth to mitigate environmental impacts or embracing the highest level of collaboration to address challenges through a more efficient, interconnected, and optimized supply chain system, as exemplified by the Physical Internet concept. Figure 5 summarizes key areas that should be covered while implementing the PI concept.

Figure 5. Key areas that should be covered in PI implementation.

Source: Own elaboration

Having explored the multifaceted dynamics of the Physical Internet (PI) and its potential impact on urban freight transport, the paper directs into the practical implementation of this concept in the sector of urban goods distribution. Section 4 delves into the elements of a framework specifically designed for PI-based city logistics. This section outlines a strategic pathway for cities to create their own PI roadmaps, addressing key components that facilitate the integration of PI principles into urban logistics systems

4. The elements of the framework for PI based city logistics – a path to creating a city PI roadmap

The framework aims to align logistics with sustainable development priorities, providing tools for effective management of goods movement while minimizing environmental impact. First, establishing a digital infrastructure for real-time tracking and monitoring of goods movement is crucial for optimizing routes, which will minimize fuel consumption and greenhouse gas emissions. This can be complemented by introducing sustainable criteria for selecting supply chain partners, prioritizing those who adopt environmentally friendly practices. Additionally, the utilization of data analysis and machine learning algorithms for intelligent route planning and predicting demand changes can significantly reduce unnecessary transportation and emissions. The creation of systems that integrate various transport modes will also help minimize empty trips and inefficiencies. Encouraging the use of renewable energy sources in transportation is another important step towards reducing reliance on fossil fuels. Finally, implementing real-time monitoring systems to track emissions and carbon footprint should be a mandatory requirement for all stakeholders in the supply chain. Figure 6 illustrates the application of the theoretical framework (left) and with actual activities within the Physical Internet (PI) in a city context (right).

Figure 6. General framework for Physical Internet adoption in city logistics operations.

Source: Own compilation

The European Commission already recommends a tool designed to streamline logistical operations in the city – Sustainable Urban Logistics Plans (SULP) are strategic documents designed to improve urban logistics and transportation. They focus on optimizing goods distribution processes in cities to enhance economic, energy, and environmental efficiency. By adopting SULPs, cities can effectively address logistical needs while minimizing their environmental impact and improving urban living conditions. Given the pre-existing SULP framework within the city, it becomes essential to integrate the PI framework into it. This integration ensures alignment with established city logistics strategies while augmenting them with the innovative principles of the Physical Internet. This approach not only facilitates a coherent application of the PI model but also enhances the effectiveness of the existing SULP, paving the way for a more sustainable and efficient urban logistics system. This integration aims to develop a Sustainable Urban Logistics Plan (SULP) as a tool for identifying key needs and then to integrate the PI framework with the SULP tool. SULP is a tool that supports public decision-makers and stakeholders in managing solutions dedicated to urban logistics, contributing to the improvement of goods handling processes for economic, energy, and environmental efficiency. The plan encompasses strategies, solutions, and principles resulting from collaboration between various entities, aimed at achieving common goals for overall sustainable urban development. The SULP preparation process depicted in figure was developed as part of the ENCLOSE research project funded by the European Union (Figure 7).

Figure 7. SULP preparation process.

Source (Aifandopoulou & Xenou, 2019), https://www.eltis.org/sites/default/files/sustainable_urban_logistics_planning_0.pdf, access: 20.08.2023.

The process of SULP preparation process is as follows: establishing the work structure, defining planning framework, analysis of logistics situation, scenario development and joint assessment, vision and strategy development with stakeholders, setting goals and indicators, solution selection with stakeholders, agreement on action plan and responsibilities, preparation for implementation and funding determination, implementation management, monitoring, adaptation, and communication, verification and future recommendations. Sustainable Urban Logistics Plans (SULPs) are not just documents, but are necessary tools for several important reasons named in the Table 4, that shows how can the policy support change towards sustainable cities.

Table 4. SULP possibilities for solving cities problems.

Goal	Solution	Methods
Air pollution reduction (Large numbers of delivery vehicles in cities contribute to air pollution, noise, and traffic congestion)	Proposing the use of low-emission and electric vehicles, supporting alternative fuels like natural gas or hydrogen.	Implementation of vehicle emission standards, promoting the use of electric charging infrastructure, limiting delivery hours to minimize these negative effects.
Energy efficiency - urban logistics planning allows for optimized delivery routes, leading to fuel and energy savings. technologies like GPS and intelligent fleet management systems.	Encouraging route optimization and the use of advanced technologies for planning routes efficiently.	Integrating route optimization software and GPS tracking systems. This can include route optimization, load optimization, delivery schedules, and advanced
Quality of life improvement: reduced traffic from delivery vehicles and decreased pollution contribute to improved quality of life for urban residents. Less noise and better air quality have a positive impact on people’s health and well-being.	Promoting reduced traffic, quieter streets, and cleaner air through sustainable logistics practices.	Implementing traffic reduction measures, investing in noise barriers, and monitoring air quality.
Avoiding congestion (Excessive delivery vehicles can lead to street congestion, hindering both deliveries and daily commutes.	Recommending delivery time restrictions and designated delivery zones.	Implementing time-based delivery windows and designating loading and unloading zones. SULPs assist in coordinating and scheduling deliveries to avoid excessive traffic.
Innovation incentives - Introducing sustainable urban logistics plans	Encouraging experimentation with autonomous delivery systems and promoting collaborative e-commerce platforms.	Establishing partnerships with tech companies and incentivizing pilot projects for innovative solutions. provides incentives for businesses to seek innovative solutions in transportation and delivery. This can lead to the development of new technologies like autonomous delivery vehicles or e-commerce platforms that unite suppliers.
Compliance with regulations - implementing SULPs can be a legal or regulatory requirement.	Ensuring that logistics practices align with existing regulations and standards.	Regular audits, reporting, and adherence to environmental regulations. Adopting sustainable logistics plans helps fulfill these requirements and avoid potential penalties.

Source: Own elaboration based on SULPiTER.

The implementation of the SULP methodology is expected to bring about the following benefits: better use of available infrastructure, reduced delivery time, lower transport costs, greater use of environmentally friendly transport solutions, reduced CO2 emissions, and reduced conflict between various modes of transport. The main assumptions of the SULP methodology include an interdisciplinary approach, a balanced approach to the problem (taking into account all relevant aspects), and involvement of all interested parties. Therefore, SULPs, contributes to increased stakeholder consensus and promote better dialogue between decision-makers at the local level. Integrating the proposed Physical Internet Framework with the Sustainable Urban Logistics Plan (SULP) schedule holds substantial promise in fostering more efficient, environmentally conscious, and sustainable urban logistics practices. By aligning these two approaches, cities can achieve a holistic and comprehensive strategy for optimizing goods movement while minimizing negative environmental impacts. The Physical Internet (PI) framework, focused on real-time tracking, intelligent route planning, and integrating transport modes, complements Sustainable Urban Logistics Plans (SULPs) in optimizing resource use, reducing fuel consumption, emissions, and operational waste. SULPs’ objectives to mitigate air pollution and congestion are enhanced by PI’s sustainable criteria for partner selection and focus on eco-friendly practices. The synergy between PI’s data-driven route planning and SULP’s adaptability to changing demand minimizes unnecessary transportation and emissions. The integration of various transport modes in the PI framework reduces empty trips, aligning with SULP’s efficiency goals. Both frameworks advocate for renewable energy in transportation, driving the shift towards greener energy and a cleaner urban environment. PI’s real-time monitoring of emissions and carbon footprint complements SULP’s focus on accountability, ensuring adherence to sustainability goals. The phased implementation of SULPs can seamlessly incorporate PI integration stages, strengthening the city’s commitment to ecological sustainability. This streamlined approach ensures that the integration of the PI framework aligns with the comprehensive SULP implementation. Figure 8 shows the two frameworks combined.

Figure 8. A general view for integrating SULP tool with proposed PI framework.

Source: Own compilation

Merging the Physical Internet Framework with the Sustainable Urban Logistics Plan is pivotal for cities aiming to achieve sustainable urban logistics. The synergies between these approaches can lead to more effective resource utilization, improved environmental practices, and enhanced logistical efficiency, all of which are critical for creating livable, sustainable cities. The convergence of the Physical Internet (PI) Framework and the Sustainable Urban Logistics Plan (SULP) stands as a transformative paradigm shift, offering cities an integrated approach to achieving efficient, environmentally-conscious, and sustainable urban logistics practices. The synthesis of these two frameworks demonstrates the potential for optimized goods movement while minimizing negative environmental impacts.

The Physical Internet (PI) Framework, with its focus on real-time tracking, intelligent route planning, and transport mode integration, complements Sustainable Urban Logistics Plans (SULPs) in creating a comprehensive strategy that enhances resource efficiency, reduces fuel consumption, emissions, and operational inefficiencies. PI’s data-driven planning and SULP’s adaptability reduce unnecessary transport and emissions. Their combined emphasis on diverse transport modes aligns to cut down on empty trips, boosting sustainability in city logistics. This synergy enables cities to develop efficient logistics systems using different modalities and emphasizes renewable energy in transportation, aligning with SULP’s vision for less fossil fuel reliance and a cleaner environment. PI’s real-time emissions monitoring complements SULP’s tracking, enhancing stakeholder accountability and environmental commitment. Figure 10 illustrates this fusion, highlighting a unified strategy for optimizing urban logistics and minimizing ecological impact. Additionally, it emphasizes the strategic importance of integrating SULPs into foundational city documents, aligning with Sustainable Development Goals and European and national directives, with the overarching aim of improving urban life quality through sustainable logistics. By embracing the SULPs in line with PI principles, cities can systematically address the complexities of urban logistics, contributing to the broader goal of creating livable, resilient, and sustainable urban environments.

5. Conclusions

This paper has delved into the integration of the Physical Internet (PI) framework within the domain of urban freight logistics, underscoring its pivotal role in redefining city logistics towards a more sustainable, efficient, and collaborative future. The adoption of PI, characterized by its emphasis on standardization, modularization, and interconnectedness, offers a novel approach that has the potential to significantly transform the landscape of city logistics.

The core findings of this study emphasize:

• Revolutionizing City LogisticsThe integration of the PI framework fundamentally alters the traditional operations of city logistics. By breaking down operational silos and fostering a network of interconnected logistics activities, PI paves the way for a more harmonious and efficient urban freight system.

• Enhancing Urban Efficiency and SustainabilityThe PI’s approach to standardizing and modularizing urban freight operations is instrumental in streamlining city logistics processes. This not only boosts operational efficiency but also markedly reduces the environmental footprint of urban freight, aligning with the pressing need for sustainable city development.

• Synergizing with Sustainable Urban Logistics Plans (SULPs)A crucial aspect of this research is the strategic alignment of the PI framework with existing SULPs. This integration is key to optimizing city logistics, effectively addressing challenges such as traffic congestion, emission reduction, and energy conservation in urban goods distribution.

• Shaping the Future of Urban FreightThe successful implementation of the PI principles within city logistics is expected to create a more agile, resilient, and environmentally friendly urban freight landscape. This evolution is in line with global urbanization trends and sustainability targets, addressing the complex demands of growing urban environments.

• Policy Implications and Collaborative Engagement in City LogisticsRealizing the full potential of the PI in city logistics requires a multi-stakeholder approach. Policymakers, urban planners, logistics providers, and community stakeholders need to collaboratively engage in developing supportive policies, investing in essential infrastructure, and fostering an inclusive dialogue for the effective adoption of this innovative logistics model.

In conclusion, the integration of the Physical Internet framework within city logistics presents an innovative and forward-looking strategy to reshape urban freight systems. This approach is not only aligned with global sustainability ambitions but is also crucial for addressing the multifaceted challenges posed by rapid urbanization. As cities continue to expand and evolve, the strategic application of PI principles in city logistics will be key to developing resilient, efficient, and sustainable urban freight networks.

6. Future work

This study opens several promising avenues for future research and development in the field of city logistics, especially in the context of integrating the Physical Internet (PI) framework. The potential areas for further exploration are presented in the Table 5.

Table 5. Future research proposals.

Future research direction	Description
Pilot Programs and Case Studies	Implementing pilot programs in various urban settings can provide valuable insights into the practical challenges and benefits of applying the PI framework in city logistics. Comparative case studies across different cities can offer a broader understanding of how local contexts influence the effectiveness of PI integration.
Policy and Governance Models	Investigating the development of effective governance models and policy frameworks that support the implementation of the PI in city logistics is crucial. This includes understanding the role of public-private partnerships, regulatory incentives, and the impact of policy on stakeholder collaboration.
Sustainability and Environmental Impact Analysis	Conducting in-depth studies on the environmental impact of PI implementation in city logistics, including assessments of carbon footprint reduction, energy efficiency, and resource utilization, is essential for validating the sustainability claims of the PI model.
Stakeholder Engagement and Collaboration Mechanisms	Future research should focus on identifying and overcoming barriers to stakeholder engagement in the PI framework. This includes studying the dynamics of collaboration among logistics providers, city planners, businesses, and residents, and developing strategies to enhance cooperative efforts.
Economic Impact Assessment	Understanding the economic implications of integrating PI into city logistics is critical. Future work should include cost-benefit analyses, the impact on local economies, and the potential for job creation or displacement.
Scalability and Adaptability	Research on how the PI framework can be scaled and adapted to different sizes of urban areas, from small towns to megacities, would be valuable. This includes exploring modular and flexible solutions that can be customized to meet diverse logistical needs.
Public Perception and Social Impact	Examining the social implications and public perception of implementing PI in urban logistics is important. This includes community acceptance, impact on traffic and public spaces, and the implications for urban living quality.

Source: Own elaboration.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the University of Gdańsk, Faculty of Economics.