Impact of demand management policies on freight efficient land-uses in the Greater Toronto and Hamilton Area: A case study in the retail sector

The efficiency of urban supply chains relies heavily on the location of logistics facilities in metropolitan areas, the spatial location of suppliers and receivers of goods, and the traffic conditions throughout the day. This research investigates whether optimal locations for Distribution Centers (DCs) are sensitive to changes in demand management policies (e.g., off-hour deliveries). Solving this research question is relevant to urban areas, considering how land-use policy changes (e.g., zoning) might take several years to achieve benefits. On the contrary, demand management policies produce an almost instantaneous impact. This research uses a bi-level mathematical optimization model that minimizes the social cost (summation of private costs plus externalities) and considers the effects of land-use decisions on the delivery tour patterns emanating from DCs. This research presents two case studies that identify the best locations for logistical facilities of different sizes in the Greater Toronto and Hamilton Area. The results show that making deliveries overnight results in fewer vehicles, more stops per tour, shorter travel times, smaller costs on a per-kilometer basis, and lower total emissions. The results also show that DC's optimal locations are near the main cargo attractors and have good access to highways and arterial roads. This research underscores the importance of freight-efficient land-use policies and demand management strategies that could help transportation and land-use professionals generate evidence-based policies for greener and more sustainable metropolitan areas.