Skip to content
Paper

The Rise of Mega Distribution Centers and the Impact on Logistical Uncertainty

 
Download PDF  (1.68 MB)
Publication: Transportation Letters: The International Journal of Transportation Research
Volume: 2 (2)
Pages: 75-88
Publication Date: 2010
Summary:

Between 1998 and 2005, employment in the U.S. warehousing industry grew at a compound annual growth rate of 22.23%, and the number of establishments increased at compound annual growth rate of 9.48%. Over this same period of time, the price for transportation fuels increased dramatically and became much more volatile. In this paper we examine the microeconomic and macroeconomic forces that have enabled such rapid growth in the warehousing industry. We also analyze structural change through employment and warehouse construction starts data and show that a new breed of warehouse has emerged – the mega distribution center, or mega DC. Mega DCs serve mega markets, which allows them to gain advantage through economies of scale and by employing push-pull supply chain strategies that decrease the uncertainty associated with forecasting market demand. Our geographical analyses suggest that this new breed of mega DC is attracted to locations that optimize access to multiple regional markets (and possibly national markets) at the expense of optimizing access to any single market. On average the length of the final leg of the supply chain becomes longer. Because the last leg must be made by truck — which is the least fuel-efficient mode of transport by far — the location requirements of this new breed of mega DC increase supply chain exposure to the related risks of rising and increasingly volatile fuel prices.

Authors: Dr. Anne Goodchild, Derik Andreoli, Kate Vitasek
Recommended Citation:
Andreoli, Derik, Anne Goodchild, and Kate Vitasek. "The Rise of Mega Distribution Centers and the Impact on Logistical Uncertainty." Transportation Letters 2, no. 2 (2010): 75-88.
Paper

COVID-19 Impacts on Online and In-Store Shopping Behaviors: Why they Happened and Whether they Will Last Post Pandemic

 
Download PDF  (2.75 MB)
Publication:  Transportation Research Record: Journal of the Transportation Research Board
Publication Date: 2023
Summary:

Throughout the COVID-19 pandemic, online and in-store shopping behaviors changed significantly. As the pandemic subsides, key questions are why those changes happened, whether they are expected to stay, and, if so, to what extent. We answered those questions by analyzing a quasi-longitudinal survey dataset of the Puget Sound residents (Washington, U.S.). We deployed structural equation modeling (SEM) to build separate models for food, grocery, and other items shopping to explore the factors affecting such changes. The results revealed that people’s online and in-store shopping frequencies during the pandemic were affected by their perceived health risks, attitudes toward shopping, and pre-pandemic shopping frequencies. Similarly, it was shown that how frequently people expect to shop post pandemic is influenced by their attitudes toward shopping, changes during the pandemic, and their pre-pandemic frequencies. We also classified respondents into five groups, based on their current and expected future shopping behavior changes, and performed a descriptive analysis. The five groups—Increasers, Decreasers, Steady Users, Returnees, and Future Changers—exhibited different trends across online and in-store activities for shopping different goods. The analysis results showed that, while 25% of the respondents increased their online shopping, only 8% to 13% decreased their in-store activities, implying that online shopping did not completely substitute in-store shopping. Moreover, we found that online shopping is a substitution for in-store shopping for groceries, while it complements in-store shopping for food and other items. Additionally, more than 75% of new online shoppers expect to keep purchasing online, while 63%–85% of in-store Decreasers plan to return to their pre-pandemic frequencies.

The rise of e-commerce, busy lifestyles, and the convenience of next- and same-day home deliveries have resulted in exponential growth of online shopping in the U.S., rising from 5% of the total retail in 2011 to 15% in 2020, and it is expected to grow even further in the future. Worldwide, spending on e-commerce passed $4.9 trillion in 2021 and it is projected to surge to $7 trillion by 2025.

In the past few years, there has been ongoing research on how this growth would change people’s travel patterns and whether its effect on in-person activities would be substitution, complementing, or modification. However, there is no single answer to this question, given different product types, regions, demographics, and primary travel modes.

While online purchasing had already been experiencing a growth every year before 2020, the pandemic accelerated this trend. In 2020, online shopping constituted more than 20% of total spending on consumer goods worldwide in comparison to 16.4% in 2019 and 14.4% in 2018. Before COVID-19, it was predicted that total e-commerce sales in the U.S. would grow up to $674.88 billion, yet the actual number turned out to be $799.18 billion. With a 15.9% growth, the U.S. is among the top 10 countries with the highest growth rate in online retail shopping in 2022.

Embracing digital technologies and bringing shops into homes are among the immediate impacts of the pandemic restrictions and lockdowns, with the majority of people reducing their frequency of going to stores and adopting alternative shopping approaches such as curbside pick-up and home delivery. Based on the reports by the U.S. Bureau of Transportation Statistics (BTS), in Nov–Dec 2020, when the penetration of the coronavirus reached its first peak in the U.S., the percentage of people who decided to shop online instead of going to stores increased by up to 10%. During the early pandemic, about 35% of U.S. workers switched to remote working, and from March to April 2020, the average daily number of people staying home increased by 32 million and the total number of trips decreased by 2.5B. Dining-in restaurants were also banned in half of the U.S. states for several months in 2020, which resulted in a significant drop in the restaurant dine-in demand and shifted people toward online food delivery services, and buying groceries online rather than going to store.

These changes were also influenced by socio-demographic characteristics. For instance, according to the BTS, the percentage of people with an annual income close to $125,000 who replaced their in-store shopping by online shopping in Nov–Dec 2020 was twice those with an annual income of $25,000. People in the neighborhoods with higher number of positive COVID-19 cases or higher spread rate of positive new cases were more likely to change their in-store shopping to online-shopping. Senior people were also shown to have higher tendency to shop online compared with younger generations, perhaps because of health and safety concerns. It is worth noting that these changes were not the same across all products; for example, online sales of food and beverage in the U.S. doubled in 2020, while home furniture online sales only increased by about 50%.

Another factor that is proved to have a major effect on people’s shopping behaviors and travel patterns during the pandemic is their risk perception and fears for their health. Irawan et al. found that perceiving COVID-19 as a severe disease decreased people’s tendency to do in-store grocery shopping. Similarly, Moon et al. found out that, during the pandemic, people who considered themselves less vulnerable to the infection were less likely to use online channels for shopping. Several studies have mentioned that the perceived health risk varies among different groups of population and depends on region, age, gender, education, race, and marital status.

Moreover, people’s online and in-store shopping behaviors are affected by their socio-demographic factors and their attitudes toward the activity. The advantages and disadvantages of online shopping over in-store shopping play a role in attitudes toward the activity. The advantages, such as receiving goods without leaving home, having access to a wider variety of products and information, and being able to compare them easily and efficiently, result in a positive attitude toward online shopping, especially during the pandemic given high perceived health risk, formal penalties, or both. On the other hand, online shopping has some disadvantages, such as transaction security concerns and long delivery times, and in-store shopping offers specific benefits, such as the ability to see, touch, feel, and try the products, ensuring the store’s environment quality, immediate possession of the product, social interaction, and entertainment. Therefore, even during the pandemic, some people maintained frequent in-store shopping trips.

Whether the pandemic-induced changes in online and in-store shopping are permanent is still debatable. Sheth discussed that people may find the new routine more convenient, affordable, and accessible, and therefore stick to it even after the pandemic is over. On the contrary, Dannenberg et al. argued that people’s motives to shop online only hold for the time of crisis, and online retailing will decline when circumstances change. Watanabe and Omori showed that most people used to shop online long before the pandemic, and they merely increased their frequency because of infection risk. So, the reasons behind the surge in online shopping might dissipate as COVID-19 recedes.

In this paper, we study how online and in-store shopping behaviors for different goods were affected during COVID-19, and whether those changes are expected to stay post pandemic. We analyze a quasi-longitudinal survey dataset from the Puget Sound region in Washington State, U.S., that includes data on people’s shopping behavior before and during pandemic, as well as their expected shopping behavior after pandemic. The dataset also contains information on socio-demographic characteristics, as well as psychometric questions about COVID-19 risk perception and attitudes toward shopping. Through descriptive analysis and structural equation modeling (SEM), we explore the factors that directly or indirectly affected people’s three shopping activities (online and in-store), for food, grocery, and other items (clothing, home goods, etc.), and investigate the similarities and differences amongst them.

This study is distinguished in several ways from the previous ones that investigated the impacts of COVID-19 on people’s shopping behavior: (1) it applies a unique descriptive analysis by classifying respondents based on their current and expected future shopping trends and studies how socio-demographic characteristics (directly and indirectly) influence people’s shopping behaviors by analyzing the similarities and differences between those groups; (2) it models online and in-store shopping jointly, considering covariations and dependencies between those two modes; (3) it applies the same methodology and set of variables to three different shopping activities (for food, grocery, and other items) and compares and contrasts their observed/expected trends and influencing factors; and (4) in addition to socio-demographic and attitudinal variables, it considers people’s baseline shopping behaviors (how frequently they shopped online and in-store before the pandemic) as factors affecting their expected post-pandemic shopping behaviors.

Authors: Dr. Andisheh Ranjbari, Jorge Manuel Diaz-Gutierrez (Pennsylvania State University, Helia Mohammadi-Mavi (Pennsylvania State University)
Recommended Citation:
Diaz-Gutierrez, J. M., Mohammadi-Mavi, H., & Ranjbari, A. (2023). COVID-19 Impacts on Online and In-Store Shopping Behaviors: Why they Happened and Whether they Will Last Post Pandemic. Transportation Research Record: Journal of the Transportation Research Board, 036119812311551. https://doi.org/10.1177/03611981231155169 
Technical Report

Improving Food Rescue in Seattle: What Can Be Learned from a Supply Chain View?

 
Download PDF  (0.68 MB)
Publication Date: 2020
Summary:

Seattle is one of the nation’s fastest-growing cities, presenting both opportunities and challenges for food waste. An estimated 94,500 tons of food from Seattle businesses end up in compost bins or landfills each year—some of it edible food that simply never got sold at restaurants, grocery stores, hospitals, schools or dining facilities. Meantime, members of our community remain food insecure. It makes sense for food to feed people rather than become waste.

This is why Seattle Public Utilities continues to support efforts toward food rescue, where edible food that would otherwise enter the waste stream is gleaned from local businesses and re-distributed to local food programs. SPU has joined other cities, states, and regional coalitions in committing to cutting food waste by 50 percent from 2015 by 2030, leading with prevention and rescue.

Since 2018, SPU has engaged more than 80 stakeholders from 50-plus organizations in a Food Rescue Innovation Initiative—a collaborative effort to better understand food rescue challenges and explore potential solutions. The initiative surfaced transportation and logistics as one of the key challenges.

To that end, SPU asked the University of Washington Supply Chain Transportation and Logistics Center (SCTL) to conduct foundational research into the logistics of food rescue in Seattle. This research forms part of SPU’s broader work to identify barriers to making food rescue operations in Seattle as effective and efficient as possible—and work toward solutions to overcome those barriers with both the private and public sector. The SCTL research includes interviews with a representative cross-section of food suppliers, food bank agencies, meal program providers and nonprofit partners.

With this document, SPU seeks to inform the myriad businesses that donate food (and by doing so, reduce their waste costs); the wide range of nonprofit hunger relief partners who collect and redistribute donated food to community members in need; local government; and locally based companies with supply chain logistics expertise that could contribute solutions to this complex puzzle.

 

Recommended Citation:
Urban Freight Lab (2020). Improving Food Rescue in Seattle: What Can Be Learned from a Supply Chain View?
Chapter

Pacific Highway Commercial Vehicle Operations: Border Policy and Logistical Efficiency in a Regional Context (TRR)

 
Download PDF  (2.62 MB)
Publication: Transportation Research Record: Journal of the Transportation Research Board
Volume: 2238
Pages: 15-23
Publication Date: 2014
Summary:

Activities of commercial vehicles just before or just following international border crossings are not well understood. Logistical responses to border crossings are believed to increase miles traveled empty, total travel times, and total vehicle emissions. Analysis of observational data and surveys taken by commercial carriers at the Cascade Gateway border crossings (between Whatcom County, Washington, in the United States and lower British Columbia in Canada) improves understanding of how the border and associated policies and regulations affect logistics operations, both in manner and in scope. Findings suggest that the border creates logistical incentives for trucks to deadhead (cross the border without carrying goods as part of a cross-border round-trip journey) and to make staging stops near the border for border-related transloading. The Free and Secure Trade program, as observed in the Cascade Gateway region, unintentionally amplifies the existing negative logistical incentives created by the border.

Authors: Dr. Anne Goodchild, Matt Klein
Recommended Citation:
Klein, Matthew, and Anne Goodchild. "Pacific highway commercial vehicle operations: border policy and logistical efficiency in a regional context." Transportation Research Record 2238, no. 1 (2011): 15-23.
Article, Special Issue

Urban Logistics: From Research to Implementation

 
Download PDF  (0.30 MB)
Publication: Research in Transportation Business & Management (RTBM)
Volume: 45 (A)
Publication Date: 2022
Summary:

To address the accessibility and sustainability challenges of urban logistics it is important to consider urban logistics from a number of perspectives.

This includes considering:

  • spatial context i.e. not focusing solely on the urban center or core but also in terms of actions taken in broader logistics and supply chain management.
  • stakeholders i.e. including all key decision makers and constituents.
  • complexity and heterogeneity of activities (range of vehicles used, the products carried, location of distribution centers, and the variety found in city size, form, and governance).

This diversity of perspectives, and their influence on the urban freight system, makes it challenging to identify simple solutions to problems.

A number of forces are also at work impacting change in the urban logistics system. Technological innovation affecting urban logistics includes digitalization, e.g. the Internet of Things (important in terms of connected objects) and big data. These developments are already established and beginning to have an impact or at least implications in the field of urban logistics and freight transport. However, problems will not be solved by technology alone and it is essential to understand how behavior (at the individual and corporate level) influences outcomes and needs to change. Research needs to address interactions between stakeholders and the role of city authorities in promoting innovation and change.

Cities are complex environments and urban logistics has to adapt to these demands. The complexity of cities also gives rise to a debate about the extent to which problems (and their possible solutions) may be considered context-specific. This leads to questions relating to how initiatives should be scaled up to gain greater traction in dealing with challenges now and in the future. It is important to learn as much as possible from the high number of projects and new services that have been implemented in cities over the past ten years. These range from initiatives related to electric vehicles, through locker box systems and the role of the receiver in making change happen. How to learn and then apply the lessons from projects is an important question. In many cases it has been argued that the underlying business model has not been addressed successfully leading to the problem of projects lasting only as long as some form of project funding is available.

Authors: Dr. Anne Goodchild, Michael Browne (University of Gothenburg)
Recommended Citation:
Michael Browne, Anne Goodchild. Urban Logistics: From Research to Implementation, Research in Transportation Business & Management, Volume 45 (A) 2022, 100913, ISSN 2210-5395, https://doi.org/10.1016/j.rtbm.2022.100913.
Technical Report

Impacts of COVID-19 on Supply Chains

 
Download PDF  (0.82 MB)
Publication Date: 2020
Summary:

As of June 2020, the novel coronavirus disease (COVID-19) has infected more than eight million people worldwide. In response to the global pandemic, cities have been put under lockdown, closing non-essential businesses and banning group gatherings, limiting urban mobility, and issuing stay-at-home orders, while nations closed their borders.

During these times, logistics became more important than ever in guaranteeing the uninterrupted flow of goods to city residents. At the same time, the same supply chain providing the goods experienced profound disruptions. Documenting the impacts the COVID-19 outbreak had on individual organizations and their responses is an important research effort to better understand the resiliency of the supply chain.

The Urban Freight Lab, a structured workgroup of senior executives from major supply chains, supply chain related companies, and academic researchers from the University of Washington, carried out a survey to address two main questions:

  • What are the most common and significant impacts of the COVID-19 outbreak?
  • What short-term actions and long-terms plans are supply chains taking in response to the pandemic?

 

Recommended Citation:
Urban Freight Lab (2020). Impacts of COVID-19 on Supply Chains. 
Paper

Examining the Differential Responses of Shippers and Motor Carriers to Travel Time Variability

Publication: International Journal of Applied Logistics
Volume: 3 (1)
Pages: 39-53
Publication Date: 2012
Summary:

Shippers and motor carriers are impacted by and react differently to travel time variability due to their positions within the supply chain and end goals. Through interviews and focus groups these differences have been further examined. Shippers, defined here as entities that send or receive goods, but do not provide the transportation themselves, are most often concerned with longer-term disruptions, which are typically considered within the context of transportation system resilience. Motor carriers, defined here as entities engaged in transporting goods for shippers, are most often concerned with daily travel time variability from events such as congestion. This paper describes the disparity in concerns and the strategies shippers and motor carriers are likely to engage in to address time travel variability. This knowledge allows for a better understanding of how investments to mitigate travel time variability will impact shippers and motor carriers.

Authors: Dr. Anne GoodchildDr. Ed McCormack, Kelly Pitera
Recommended Citation:
Goodchild, Anne V., Kelly Pitera, and Edward McCormack. "Examining the differential responses of shippers and motor carriers to travel time variability." International Journal of Applied Logistics (IJAL) 3, no. 1 (2012): 39-53.