A closer look at the Business Models Canvas and CBA Analysis Report with Chris Rowland, MDS Transmodal
In today’s digital age, businesses and public institutions are using innovative technology to improve their services and serve customers and citizens better. One such innovation is the SENATOR platform, designed to enable sustainable urban freight logistics. By enhancing efficiency, transparency, and sustainability, SENATOR aims to tackle the challenges of urban freight logistics. This is important as these operations are essential to urban economies, but also contribute to congestion, poor air quality, and carbon emissions.
For the SENATOR platform to succeed and be commercially sustainable, it needs a profitable and sustainable business model. The recently published “Business Models Canvas and CBA Analysis Report” provides valuable insights into potential business models for the platform. The report covers value proposition, customer segments, channels, revenue streams, cost structure, and key partners.
This article explores the report’s findings and how SENATOR can create, deliver, and capture value. Challenges and recommendations for a sustainable business model are discussed, with a focus on the platform’s potential impact on sustainable urban freight logistics, society, and the environment.
Read the interview with Chris Rowland, the leader of SENATOR’s business models work package and Managing Director of MDS Transmodal, a UK-based freight transport economics consultancy.
How does the SENATOR platform aim to create value for the different stakeholders in the urban freight transport field?
The stakeholder analysis we’ve carried out in the SENATOR project makes a distinction between commercial operators and the public sector.
The commercial operators are businesses that despatch goods (shippers), the transport operators that provide door-to-door transport services and the customers who receive the goods (receivers); for these operators the value created by an IT platform such as SENATOR needs to be focused on reductions in costs and/or an improvement in service quality.
The public sector (national governments and city authorities) which are representing people who are either living in or visiting the relevant urban areas, is interested in economic efficiency (and therefore the competitiveness of an individual city’s economy), but is also interested in wider issues such as reductions in carbon and other environmental emissions. For the public sector, therefore, reductions in what economists call externalities (poor air quality, traffic congestion, greenhouse gas emissions, the cost of road traffic accidents etc which aren’t included in the market price of the transport services) would be an important source of value from the SENATOR Platform.
How will testing in Dublin and Zaragoza contribute to the further use of the SENATOR platform? What knowledge will these urban living labs provide?
The two Living Labs in Dublin and Zaragoza will provide test sites to increase our understanding of the practical issues involved in integrating data from different organisations specifically for the purpose of improving the overall efficiency of ‘last mile’ logistics in urban areas.
As an economist – and therefore a practitioner of the so-called ‘dismal science’ – quantified costs (and benefits) are close to my heart! The Living Labs will also provide the opportunity to measure the costs and benefits of different ways of operating ‘last mile’ logistics chains using the SENATOR platform and make a comparison, based on some hard numbers, between ‘without SENATOR’ and ‘with SENATOR’ scenarios.
While reductions in the cost of last mile freight transport – or the opportunity to create more revenue – will be particularly important for the commercial operators, I’m hoping the Living Labs will also be able to show that the SENATOR platform can reduce the road kilometres required in the two cities.
Which specific issues are freight deliveries facing at the moment, and how does the SENATOR platform plan to address these challenges?
Operating conditions will vary in different urban areas, but the main issue for transport operators providing ‘last mile’ delivery services is likely to be meeting the requirements of their customers (the shippers of the goods) to provide a reliable delivery service in a highly competitive market environment despite traffic congestion. Finding parking spaces close to the destinations of the deliveries can be a major challenge in the centre of cities such as Zaragoza and Dublin, resulting in illegal parking, the risk of fines and additional stress in the working lives of the delivery drivers.
What are the main challenges you anticipate facing in creating and delivering value for the SENATOR platform, and how does the project plan to overcome them?
Our initial work suggests that two main barriers are likely to have to be overcome:
- The first is related to explaining to consumers that their completely understandable choices can have a hidden cost – both financially and in terms of externalities – and that by changing their behaviour and making different choices value can be created both for them and wider society. Consumers, in particular, are encouraged by retailers to order goods online without any consideration for the number of individual deliveries they receive. This fragmentation of deliveries increases vehicle kilometres and is driven by powerful market forces where individual retailers are operating in a highly competitive market environment. I think the SENATOR project can only accept this market environment and see whether its platform can reduce the vehicle km of transport that is required.
- The second key barrier is likely to relate to overcoming some legal barriers that impede the sharing of the data that is essential to allow collaboration in logistics. Competition policy – and its practical implementation in law – may restrict the ability of companies to share data because of the fear of large fines in the event of a breach. This is an issue that SENATOR may need to address head-on as it moves towards its conclusion.