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Urban Distribution Centres and Competition among Logistics Providers: a Hotelling Approach

Author

Listed:
  • Daniele Crotti

    (University of Genoa)

  • Elena Maggi

    (University of Insubria)

Abstract

In recent years several European municipalities have paired market-based measures with urban distribution centres (UDC) in order to reduce CO2 emissions and make more sustainable urban freight ‡ows. However, UDCs may add reloading costs and extra delivery times which have relevant impact on both urban supply chains and the competition among traditional and UDC-based logistics service providers in terms of service quality and freight rates. By using a duopolistic Hotelling framework, we show that market-based measures and subsidies might be substitutes to enhance the demand for UDC-based providers but public funding can be reduced by improving the quality of UDC services. These results can enlarge the scope for investments in UDC value-adding services in order to decrease private crowding-out effects in the long run.

Suggested Citation

  • Daniele Crotti & Elena Maggi, 2017. "Urban Distribution Centres and Competition among Logistics Providers: a Hotelling Approach," Working Papers 2017.17, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2017.17
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    More about this item

    Keywords

    Urban Distribution Centre; City logistics; Sustainable Urban Transport Policy; Hotelling Spatial Competition Model; Market-Based Measures; Public Subsidy;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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