More and more cities are realizing the benefits of off-hour deliveries.
New York's off-hour delivery program, whereby trucks make shipments at night rather than during the day, is the rare policy initiative that all parties consider a huge success. Pilot tests have found that truck speeds go up, shipment times go down, local traffic gets better, and the air gets cleaner. If every business in the city adopted the program, the economic benefits are estimated to be upwards of $193 million a year.
Other cities have taken notice. In particular, Washington, D.C., is in the early phases of a 3.5-year off-hour delivery pilot, with the help of a federal grant. Laura Richards of the District Department of Transportation tells CityLab that right now the city is identifying potential business participants and hopes to have the program up and running in earnest by next year.
"D.C. is unique because we're mostly last-mile deliveries," says Richards. "Almost everything is delivered by truck. This [pilot] is a way to relieve congestion relating to that."
D.C.'s Growing Freight Traffic Problem
The problems of daytime freight shipments are familiar to any big city. Trucks both add to local traffic and suffer from it, slowing vehicles down to a crawl and increasing exhaust. Once they do reach a delivery destination they often tie up curb space or, if it's occupied, double-park. The farther trucks end up from a loading zone, the more trips they need to finish the delivery, and the less road space left to other curbside modes like bicycles.
That's bad for the truck drivers for obvious reasons, but it's also bad for business, because it makes the whole process longer and more costly. The unreliable delivery time often leads businesses—especially those with perishable goods, like food vendors or restaurants—to order more inventory than they often need for fear they'll run out before the next shipment. All these extra costs, in turn, can raise prices for local consumers.
In D.C., already one of the most congested metro areas in the United States, truck traffic costs the city about $650 million a year, according to DDOT. And the problem is only growing. By 2040, truck volumes are expected to grow 70 percent for inbound shipments and nearly 140 percent for outbound trucks.
Other Cities Are Joining In
The details of the D.C. pilot are still emerging, but would likely look a lot like the successful New York program. Participants would agree to move deliveries from daytime hours to a time window between 7 p.m. and 6 a.m. Richards says the city will target key corridors in business improvement districts—Wisconsin and M Street in Georgetown, for instance, or 18th Street in Adams Morgan. She says DDOT will reach out to businesses and freight carriers alike.
Over the course of the program, DDOT will track changes in travel time, truck fuel-economy, emissions, participation rate, commercial vehicle parking violations, delivery cost, and receiver satisfaction. If the trial is a success, says Richards, the city will look into other ways of incentivizing off-hour delivery. One hypothetical example: developers could get relief from loading berths required by a zoning code if they agree to move shipments after hours.
"The overall goal of the program is to reduce congestion, reduce emissions and improve livability," she says.
Other cities have taken notice of these benefits. Supply Chain Quarterly reports that Orlando has also been awarded a federal grant for a pilot; that Chicago, Boston, and Atlanta have shown interest; and that international cities, including London and São Paulo, are crafting off-hour delivery programs. In New York, more than 400 establishments and companies have tried off-hour shipping to date, including Whole Foods, Foot Locker, and Duane Reade.
Lesson One From New York: Focus on "Receivers"
In New York, previous attempts to address the problem through higher daytime tolls didn't work. That's largely because truck operators don't have much of a say in a typical freight transaction; if a business wants a shipment, it will replace a carrier that won't make a daytime delivery with one that will. José Holguín-Veras of Rensselaer Polytechnic Institute, who's been studying the problem for years, explains more with co-authors in Supply Chain Quarterly:
After the Port Authority of New York and New Jersey put in place a time-of-day pricing initiative in 2001, only one out of nine motor carriers was able to pass on the added toll costs to their customers. Moreover, the passed-on costs were too small to influence a behavior change on the part of receivers. As a result, the expected reduction in truck traffic did not materialize.
What does work is focusing on the "receivers"—the businesses, companies, and buildings that get all the deliveries. The businesses that participated in the New York pilot found their delivery times became more reliable (since trucks fought less traffic) and their inventory costs went down (since they didn't have to keep as much "safety" stock on hand). Carriers love it, too: they can complete more deliveries in a single run and get way fewer parking tickets.
The only thing keeping off-hour deliveries from being a total win is nighttime noise. But that problem can be handled with better carrier practices (such as not slamming cargo doors) and better truck design (such as "noise-reducing vehicle coatings"), write Holguín-Veras and company. They report that, in New York, there have been "essentially no noise complaints" logged against participating companies.
Lesson Two: Unassisted Deliveries Work Best
There are two ways for a business to receive an off-hour delivery. They can pay employees extra to work irregular hours and meet the trucks. Or they can arrange for "unassisted" shipments by providing access to delivery areas, via keys or electronic fobs, that are closed off from the rest of the building. (In Boston, one mall outlines its off-hour delivery area with lasers that trigger an alarm if crossed.)
It's these unassisted off-hour deliveries that hold the greatest promise. For the New York off-hour pilot, half the businesses were staffed and half unassisted, with financial incentives covering much of the labor costs. After the pilot, without the extra money to cover off-hour expenses, all the staffed receivers went back to daytime deliveries, according to Holguín-Veras. But only one of the unassisted receivers opted to return to a daytime freight schedule.
Laura Richards of DDOT says the District will use some of its pilot funding to help pay for staffed off-hour deliveries, but that it plans to focus more resources on unassisted deliveries, given the New York findings. "We see those are the ones that continue past the pilot program," she says.