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Equilibrium and Optimal Location of Warehouses in Urban Areas: A Theoretical Analysis with Implications for Urban Logistics

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  • François Combes

    (IFSTTAR/AME/SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - IFSTTAR - Institut Français des Sciences et Technologies des Transports, de l'Aménagement et des Réseaux - Communauté Université Paris-Est)

Abstract

This paper presents a structural microeconomic model of the choice of warehouse location in urban logistics. The model is theoretical and analytical. It brings the focus on operational constraints, their diversity, and their influence on costs. The location decision is modelled as a trade off between land rents (making it costly to locate close to the center of the urban area) and transport costs (which increase non linearly when the warehouse moves away from the city center.) The influence of various parameters on the optimal warehouse location is analysed. The following conclusions are drawn. First, increased demand contributes to explain logistic sprawl: when the density of operations (pick-ups and deliveries) increase in a given area; transport is more efficient, making it less necessary for warehouses to be close to the city center. Second, urban logistics is a heterogenous sector and, depending on the operational constraints, will not react homogenously to changes in economic parameters or the implementation of public policies. Third, economies of scale are identified: some implications are discussed. Fourth, the paper briefly discusses how land-use planning, regarding in particular warehouses, can help internalise some of the externalities of urban logistics.

Suggested Citation

  • François Combes, 2019. "Equilibrium and Optimal Location of Warehouses in Urban Areas: A Theoretical Analysis with Implications for Urban Logistics," Post-Print hal-03272805, HAL.
    • Handle: RePEc:hal:journl:hal-03272805
    DOI: 10.1177/0361198119838859
    Note: View the original document on HAL open archive server: https://hal.science/hal-03272805
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    References listed on IDEAS

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    2. Sakai, Takanori & Kawamura, Kazuya & Hyodo, Tetsuro, 2015. "Locational dynamics of logistics facilities: Evidence from Tokyo," Journal of Transport Geography, Elsevier, vol. 46(C), pages 10-19.
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    5. Carlos F. Daganzo, 2005. "Logistics Systems Analysis," Springer Books, Springer, edition 0, number 978-3-540-27516-9, December.
    6. Laetitia Dablanc & Zeting Liu & Martin Koning & Jens Klauenberg & Leise Kelli de Oliveira & Corinne Blanquart & François Combes & Nicolas Coulombel & Mathieu Gardrat & Adeline Heitz & Saskia Seidel, 2017. "Observatory of Strategic Developments Impacting Urban Logistics (2017 version)," Working Papers hal-01627824, HAL.
    7. Agatz, Niels A.H. & Fleischmann, Moritz & van Nunen, Jo A.E.E., 2008. "E-fulfillment and multi-channel distribution - A review," European Journal of Operational Research, Elsevier, vol. 187(2), pages 339-356, June.
    8. Laetitia Dablanc & Scott Ogilvie & Anne Goodchild, 2014. "Logistics Sprawl: Differential Warehousing Development Patterns in Los Angeles and Seattle," Post-Print hal-00944130, HAL.
    9. Dablanc, Laetitia & Ross, Catherine, 2012. "Atlanta: a mega logistics center in the Piedmont Atlantic Megaregion (PAM)," Journal of Transport Geography, Elsevier, vol. 24(C), pages 432-442.
    10. W. J. Baumol & H. D. Vinod, 1970. "An Inventory Theoretic Model of Freight Transport Demand," Management Science, INFORMS, vol. 16(7), pages 413-421, March.
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    Cited by:

    1. Guerrero, D. & Hubert, J.-P. & Koning, M. & Roelandt, N., 2022. "On the spatial scope of warehouse activity: An exploratory study in France," Journal of Transport Geography, Elsevier, vol. 99(C).
    2. Yang, Yitao & Jia, Bin & Yan, Xiao-Yong & Chen, Yan & Song, Dongdong & Zhi, Danyue & Wang, Yiyun & Gao, Ziyou, 2023. "Estimating intercity heavy truck mobility flows using the deep gravity framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    3. David Guerrero & Jean Paul Hubert & Martin Koning & Nicolas Roelandt, 2022. "On the Spatial Scope of Warehouse Activity: An Exploratory Study in France," Post-Print hal-03551270, HAL.

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