Freight Demand Management (FDM), as its name implies, are transport policies that changes in freight demand at commercial establishments and residences, by altering the frequency, timing and mode of deliveries. FDM initiatives are unique because they focus on changing the behavior of the receivers (i.e. freight demand), which indirectly change the behaviour of freight carriers and freight traffic (i.e. the transport supply used to satisfy freight demand).

A well-studied approach are off-hour deliveries that incentivize receivers to accept deliveries in the off-hours, such as early in the morning before the peak-hours of urban traffic. In this case, freight carriers avoid traffic congestion, which increases their arrival reliability. FDM policies can be implemented to lessen the impact of the disadvantages, if any.

Other key approaches include:

• Staggered pick-up & delivery programs that spread vehicle arrivals throughout the day;
• Receiver-Led-Consolidation programs that encourage receivers to bundle their shipment orders, for example, by coordinating with other receivers or forcing multiple suppliers to consolidate their deliveries.

A brief overview of types of FDM measures according to how the demand is changed is presented in the Table below. Note that these measures can be implemented voluntarily or made mandatory.

Changes induced	Types	Implementation	Overall benefits	Impacts on receivers
Amount of freight	Receiver-led- consolidation	Voluntary	+++++	= to +
		Mandatory	++++	= to –
Timing of deliveries	Off-hour deliveries	Voluntary	++++	= to +++
		Mandatory	+++	−−− to =
	Staggered deliveries	Voluntary	+++	=
		Mandatory	++	−−− to =
Destination of delivery	To urban consolidation centre	Voluntary	++	=
		Mandatory	++	=
	To trusted vendor	Voluntary	++	=
		Mandatory	++	=
	To delivery lockers	Voluntary	++	−−− to =
		Mandatory	− to +	−−−−
Permitted vehicle modes or characteristics	Mode change programs	Voluntary	− to +	−− to =
		Mandatory	− to +	−−−− to −

Figure 1 Overview of FDM types and their impacts (adapted from Holguín-Veras  & Sánchez-Díaz, 2016)

The overview shows us that there are usually more benefits both overall and to the receivers, if the measure is implemented voluntarily. Voluntary implementation can be facilitated via policy levers, such as pricing, incentives or a combination of both. While financial incentives are more commonly known, incentives can also take the form of recognition or awards, which are non-monetary forms. When voluntary implementation appears ineffective, regulations can be introduced to induce the change. However, the benefits are expected to be less.

__________

Holguín-Veras  J. & Sánchez-Díaz, I., (2016). Freight Demand Management and the Potential of Receiver-Led Consolidation programs. Transportation Research Part A 84, 109–130