Supply Chain Expertise and Technology Blog by TMC, a division of C.H. Robinson

Guest Post: Megacities are the New Logistics Frontier

Transportation in congested cities

Delivering freight in a large, congested city such as Boston, U.S., with an estimated population of 636,000 people, is no easy task. But imagine the obstacle course that confronts drivers in São Paulo, Brazil, with a population of 20 million people. The central municipality of São Paulo alone has 11 million inhabitants, enough to qualify it as a megacity (cities with populations in excess of 10 million are generally defined as megacities).

More than 4.5 million buses, cars, and trucks clog São Paulo’s arteries. And the congestion is getting worse. Over the last five years, some 1.3 million new vehicles were registered in the municipality of São Paulo, a 21% increase in the size of the fleet.

Not surprisingly, this traffic generates huge volumes of carbon, with freight vehicles accounting for a sizeable fraction of these emissions. A 2010 local government report estimates that 12% of the 257,000 tons of air pollution generated by road traffic in the city come from delivery vehicles.

Clearly, the sheer density of megacity populations and severely stressed infrastructure are important parts of the traffic congestion problem. But there is another key component that can hamper traffic flows in dense urban areas that is often underestimated: misguided regulation.

Since 1982, São Paulo’s local government has been implementing and modifying various public policies to control freight traffic movements in targeted areas within the city.

For example, regulators have sought to encourage the use of small goods vehicles called urban freight vehicles (VUCs). The traffic codes specify where and at what times VUCs can deliver within the city limits. In addition, a larger vehicle called a TOCO that has about double the capacity of a VUC delivers freight in these areas, and are also restricted in terms of where and when they can offload.

How do regulations like these affect traffic flows on the ground?

Sponsored by the Itaú Fund for Research on Sustainability in Latin America, the MIT Global SCALE Network in Latin America and the University of São Paulo, sent researchers into the streets to carry out a detailed analysis of delivery vehicle movements in São Paulo.

The initial findings suggest that while traffic management regulations designed and implemented by government bureaucrats may be well intentioned, in the real world they can do more harm than good.

For example, in most cases, a larger vehicle is actually the better choice when capacity and delivery windows are not imposed by the regulators. But the TOCO is not a good choice when short delivery windows are mandated. Given their larger capacity, there is insufficient time to complete all the deliveries on a route using a TOCO, which increases the number of half-empty vehicles. In this case, a time window policy without corresponding capacity regulation will actually result in an increase of CO2 emissions.

The researchers made some recommendations for improving the regulatory regime. For instance, depending on the density of customers in specific regions of São Paulo, it might be better to use vehicles that are slightly larger than the VUC or to incentivize greener versions of the TOCO. Also, a delivery time window policy in conjunction with more parking spaces in extremely dense areas is a more effective way to reduce CO2 emissions. And the team advocated a tailored approach to policy making that takes neighborhood characteristics into account, to minimize the unintended environmental consequences of regulation.

Lessons like these can help planners and policymakers develop more effective ways to regulate commercial traffic flows in any megacity.

This is an important goal. The world’s megacities are growing in both number and size, and their share of world GDP is expected to climb from 14% to 20% in a decade. At present, most of the world’s 23 megacities can be found in developing countries, where major growth markets are located.

The MIT Megacity Logistics Lab is continuing the research with a project to create an atlas of logistics demands in large urban areas.

We have already collected data in eight megacities: Mexico City, Kuala Lumpur, São Paulo, Rio de Janeiro, Madrid, Beijing, Santiago de Chile, and Bogotá. The data will be freely available on the website. Tools that help companies navigate and explore operational data on last mile urban deliveries, will also be available on this website.

Ultimately, improving freight traffic management in these population centers will benefit the global logistics community, help us to design better cities of the future, reduce the impact of freight in urban areas, and reduce the cost of goods delivered to urban dwellers.

*Dr. Edgar Blanco is Research Director, MIT Center for Transportation & Logistics, and Director of the MIT Megacity Logistics Lab. He can be contacted at

- Research Director at the MIT Center for Transportation & Logistics
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