Optimizing food center logistics in the context of climate change

Small-scale food producers in Europe, the vast majority of which are small and medium-sized enterprises and family farms, often face significant disadvantages compared to large market players. Long and complex Food supply chains, where products often pass through a number of international actors, reduce the share of income received by farmers themselves and increase logistics costs. To address these problems, there is increasing pressure short food supply chains (SFSC), which involve a limited number of economic operators focused on cooperation, local development and close relations between producers and consumers.

Despite the potential benefits of SFSC, the logistics operations of food hubs can be particularly costly and environmentally burdensome. Common problems include underutilization of vehicle space, which increases transportation costs, and independent delivery routes for multiple producers, which lead to high costs and extended delivery times. The SFSC operating model often involves many individual routes, which can lead to carbon emissions that exceed those of traditional long supply chains, creating a dilemma for sustainability efforts. These logistical challenges have prompted a search for innovative strategies to reduce both the financial and environmental burdens associated with SFSC logistics.

Food hubs play a key role within the SFSC, serving as platforms that aggregate products from small food producers and facilitate their delivery to end consumersBy aggregating products from multiple sources, food hubs can achieve economies of scale in transportation, thereby significantly reducing logistics costs for suppliers as well as their environmental impactThe research focused on improving the environmental and operational efficiency of food hubs through the development of a new mathematical model Mixed-Integer Linear Programming (MILP). The model solves the transportation problem "from producer through node to customer" with the aim of minimize overall costs while reducing environmental impacts, as they are carbon emissions and number of vehicle tripsIt was tested on real-world data from the regional food hub Food and Drink North East (FADNE).

Key strategies for reducing carbon emissions:

  • Collaboration between producers: Computational experiments have clearly demonstrated that increased cooperation between producers when delivering goods to a node can lead to reducing logistics costs and carbon emissions at 12 – 16 %.
  • Direct deliveries from producers to customers: Although the node is an important consolidation point, the introduction direct transport lines from producer groups to customer zones can significantly reduce overall costs, fuel costs and carbon emissions. In the case of widespread problems, total carbon emissions and average emissions per order reduced by 12-16 %, which also led to a decrease in the number of vehicle trips.
  • Deployment of electric vehicles (EVs): The transition from conventional to electric vehicles is a key step towards decarbonization of logisticsThe analysis showed that EV deployment can reduce transportation costs by almost one third and carbon emissions by up to 70 %The phased deployment of EVs, which the model also considers, suggests that the increase in EV charging costs will never outweigh the savings in fuel costs, leading to progressive reductions in overall costs and emissions.
  • Resistance to disturbances: The model demonstrates resilience to unpredictable changes. When delays in deliveries the share of direct deliveries from producers to customers is increasing, which acts as a buffer and reduces overall costs and emissionsEven with disruption of two-thirds of transport lines customer demand will still be met with a slight increase in carbon emissions, which demonstrates the model's flexibility and ability to minimize environmental impact even in extreme scenarios.

This research provides valuable insights for food hub operators and small producers, highlighting potential for optimization and innovation for economically and environmentally sustainable food distribution systemsCooperation between small producers and the strategic use of direct deliveries, together with a phased transition to electric vehicles, have proven to be key to significant reduction in carbon emissions and operating costsThe model's flexibility in dealing with delays and disruptions further contributes to the resilience and sustainability of the supply chain, helping it adapt to challenges of climate change in the food sector. Spring

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