Designing Two-Echelon Sustainable Urban Logistics Networks with Green Transport Modes

Dung Nguyen (), Jakob Puchinger and Vera Hemmelmayr
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Dung Nguyen: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
Jakob Puchinger: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School, LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay
Vera Hemmelmayr: WU - Wirtschaftsuniversität Wien [Austria]

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Abstract: Urban freight transport is a major contributor to carbon emissions and requires sustainable and strategically planned delivery systems in dense urban environments. While research has explored various operational and technological aspects of green logistics, limited attention has been given to the strategic design of urban logistics networks, particularly the selection and placement of micro-hubs and the conditions that favor green transport modes over conventional vehicles. This paper develops a strategic two-echelon urban logistics network design framework that integrates green transport modes such as cargo bikes and electric vans alongside conventional vans to reduce carbon emissions. The study formulates a two-stage stochastic programming model that captures demand uncertainty and evaluates the financial and environmental trade-offs among alternative network configurations over a long-term planning horizon. To account for routing complexity in urban contexts, the route cost approximation formula is enhanced to account for complex transport costs while maintaining computational efficiency. The stochastic model is solved using a Benders decomposition approach to handle large-scale problem instances efficiently. The framework applies to a case study in Paris, incorporating realistic low-emission zone regulations and projected demand scenarios. Results show that optimal strategic configurations combining green and conventional vehicles within a two-echelon structure substantially reduce total costs and emissions. We also identify the circumstances where green transport is a more favorable alternative to conventional vans. The findings provide guidance for policymakers and logistics planners designing cost-efficient and low-carbon urban delivery systems. It can be adapted to other metropolitan areas to evaluate sustainable delivery strategies under varying regulatory and demand conditions.

Date: 2026-02-23
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Published in 24th International Working Seminar on Production Economics, Universität Innsbruck, Feb 2026, Innsbruck, Austria

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