Development of a Logistics Decision Support Tool for Small and Medium Companies to Evaluate the Impacts of Environmental Regulations in California

Research Team: Miguel Jaller (lead) and Carlos Otero-Palencia

UC Campus(es): UC Davis

Problem Statement: To mitigate negative transportation impacts, California’s agencies have developed (or are in the process of developing) several initiatives and regulations to foster cleaner technologies, including: the Advanced Clean Truck (ACT) rule, the California Sustainable Freight Action Plan (CSFAP), and the ongoing development of the Advanced Clean Fleet (ACF) rule. Overall, these initiatives aim to improve freight environmental efficiency, foster the use of zero and near-zero-emission vehicles (ZEVs), and improve economic competitiveness. Some of these initiatives take the form of purchase voucher incentives, vehicle manufacturer mandates, and regulatory emissions policies. Although these actions are potentially effective for sustainability, the immediate economic impacts that they would have on businesses, especially small-and medium-sized businesses, are not well understood. If the acquisition of typically expensive cleaner vehicles is mandated, it may negatively affect companies’ cash flow. On the other hand, when the vehicle purchase is subsidized by the government, it could result in inefficient public spending if they those assets are not used to the fullest.

Project Description: To contribute to these efforts towards freight environmental efficiency, the researchers developed a logistics decision-support tool (DST) named Cargo Aggregator Beta 1.0. This tool facilitates the joint routing of pick-ups and deliveries between cooperating companies to reduce their environmental impact and transportation costs. In addition, the tool can help to better understand the impact of sustainability policies in terms of companies’ operative costs. To achieve even lower costs, the tool analyzes cooperative strategies that jointly exploit economies of scale.

Status: Completed

Budget: $79,985