Full length article
An intelligent model of green urban distribution in the blockchain environment

https://doi.org/10.1016/j.resconrec.2021.105925Get rights and content

Abstract

Recently, with the deterioration of the environment, increasing companies choose horizontal cooperation to achieve the goal of reducing environmental pollution and cost in the urban distribution industry. However, companies worry that the business information is leaked in the process of horizontal cooperation. This kind of mistrust often leads to the failure of horizontal cooperation. The emergence of blockchain technology has become a great means to resolve trust problem between partners, which ensures data sharing and trust through peer-to-peer, consensus mechanism and encryption technology. In response, this study proposes architecture of blockchain-based urban distribution system for horizontal cooperation that analyzes the components and layers of the urban distribution. Meanwhile, a smart contract, the innovative applications of blockchain, is designed to match the resource of supply and demand to design the distribution routes in the urban distribution system. To achieve the above goal, an open vehicle routing model of urban distribution taking into account environmental pollution factors is developed as the mathematical logic of smart contract, which aims at the lowest total cost including fixed, fuel, penalty, carbon emission and pollutant emission costs. Furthermore, the genetic algorithm is developed to support the implementation of smart contract, and the effectiveness of the smart contract is verified through a real case. This study narrows the knowledge gap in applying blockchain technology to urban distribution, and has brought contributions to the fields of blockchain and urban distribution. Finally, the limitation and future research direction are discussed.

Introduction

In recent years, the urban distribution industry has developed rapidly with the progress of economy and technology (Yadav and Singh, 2020). However, some negative environmental effects also have followed, including air pollution and global warming (Karaman et al., 2020; Lim et al., 2020). In the face of the continuously expanding urban distribution market, if there is no active action, the environmental problems of urban distribution will be even worse. Therefore, how to reduce environmental pollution in the urban distribution has become an important issue (Wu et al., 2020). In response, scholars have begun the related research in the field of green urban distribution. Previous studies showed that horizontal logistics cooperation between different companies is a feasible solution, that aims optimize the distribution network by integrating tangible (logistics facilities) and intangible (information) logistics resources to achieve the set goals (Allen et al., 2017; Herold and Lee, 2019). More specifically, the related research showed that the distribution cost is reduced by 17.7% (Li et al., 2020b) and the carbon emission is reduced by 25.3% (Liu et al., 2020) through horizontal logistics cooperation mechanism. In addition, it can also increase the vehicle utilization, alleviate traffic congestion and reduce the operating distance of the entire distribution network (Park et al., 2016).

The successful implementation of horizontal logistics is inseparable from the sharing of tangible and intangible logistics resources (Raue and Wieland, 2015). In terms of tangible logistics resources, partners usually need a cooperative hub to promote the exchange of goods and the sharing of logistics facilities (Brown and Guiffrida, 2014). However, the sharing of intangible resources (information) has become a key issue that hinders the development of horizontal logistics. This is because the participants in the horizontal logistics network are both cooperative and competitive, which causes them to worry about business information leakage during information sharing (Pomponi et al., 2015). In this case, the lack of trust often caused the failure of horizontal logistics. According to Hribernik et al. (2020), trust issues reduce the willingness of horizontal logistics cooperation between companies by 16−18%. Therefore, to ensure the smooth cooperation, it is necessary to manage the horizontal logistics alliance to avoid trust problems. At this stage, most of the relevant research is focused on ensuring the rights of both parties through the formulation of contracts. For example, Raue and Wieland (2015) discussed the impact of contracts on operational governance in horizontal logistics services, and concluded that contracts ensure the effectiveness of operational governance, which promotes the coordination of cooperation and reduces the risk of opportunistic behavior among partners. However, the artificially defined contract still has certain risks and does not fundamentally solve this problem.

The emergence of blockchain has become a great means to resolve trust problems (Mikl et al., 2020; Orji et al., 2020). At first, blockchain is applied in the financial field, but people have also noticed that it can also bring great changes to non-financial field, including e-government, e-commerce and logistics (Allen et al., 2019; Hald and Kinra, 2019; Juma et al., 2019). The data sharing and trust in horizontal logistics cooperation is realized through the following aspects. First of all, the blockchain adopts the peer-to-peer mechanism that ensures once a partner adds information to the ledger, all participants can obtain data to realize information sharing (Bai and Sarkis, 2020). This mechanism also ensures that the data in the distribution process is immutable, thereby achieving complete product traceability (Kamble et al., 2020). At the same time, distributed ledger eliminates centralized databases, which effectively prevents a partner from controlling the organization (Azzi et al., 2019). In addition, the database can also set different permissions to manage information according to the partner identity (Lim et al., 2021). Secondly, the joining of new members must be approved by all partners in the blockchain, which ensures the reliability of information sources and effectively avoids fraud (Hasselgren et al., 2020). Finally, sensitive data can be encrypted through cryptography technology to avoid the unauthorised third parties reading it (Wang et al., 2019). This mechanism ensures that partners can only obtain the information required by the participating links. For example, in the process of distribution, only the delivered products, location and time are known, and other information such as prices are kept confidential.

In addition to using blockchain to realize information sharing and build trust between partners, it is also necessary to design a cooperation mechanism for planning distribution routes in the urban distribution system (Fu et al., 2020). At this time, the innovative applications (smart contracts) of blockchain plays an important role in the integration of decentralized resources in the distribution network (Leng et al., 2018). In other words, the smart contract can match the resource of supply and demand to design the distribution routes that meets the set goal. To solve this problem, an open vehicle routing optimization model (the method for planning distribution routes) with consideration of environmental pollutants is designed as the mathematical logic of smart contract, which aims to minimize the total cost including fixed, fuel, penalty, carbon emission and pollutant emission costs.

Based on above analysis, this research develops an intelligent green urban distribution model for horizontal cooperation in the blockchain environment, which consists of two research content: (1) An architecture of blockchain-based urban distribution system. (2) A smart contract with an open vehicle routing optimization model as the mathematical logic is designed to plan the distribution routes. Although many benefits that blockchain brings to the urban distribution process have been recognized, the knowledge of applying blockchain technology to the urban distribution practice is still limited. The purpose of this research is to narrow the knowledge gap and realize efficient distribution by constructing an architecture of blockchain-based urban distribution system and implementing the smart contract. To the best of our knowledge, this research is an earlier study on applying blockchain technology to the urban distribution. This research has both theoretical and practical contributions. In theory, this research creatively proposes to design a smart contract to match supply and demand resources to plan the distribution routes. In addition, the architecture developed in this research can provide the reference for further in-depth studies to accelerate the development of blockchain in the field of urban distribution. In practice, this research helps companies realize the advantages of blockchain, thereby promoting the implementation of blockchain projects, which brings excellent competitiveness to the development of the enterprise.

The remaining parts of this study as follows. Section 2 reviews the literature. A blockchain-based urban distribution system framework is designed in Section 3. Section 4 introduces the mathematical model of smart contracts. The experiments based on real case are carried out in Section 5. Section 6 presents further discussion including main findings, implications for research and implications for practice. Finally, the conclusion and future research are summarized in Section 7.

Section snippets

Blockchain and smart contract

Blockchain is used to establish trust among relevant stakeholders in urban distribution system. Blockchain is a distributed database that does not require the support of a third party, which uses the cryptography, consensus mechanism and smart contract to ensure the safety and efficiency (Drljevic et al., 2020). This emerging technology can bring revolutionary changes to many industries, including the logistics field (Bumblauskas et al., 2020). The information flow, as an important content in

System architecture

This section proposes the architecture of blockchain-based urban distribution system. The application of blockchain realizes information sharing and makes the distribution process more transparent.

Design and implementation of the smart contract

Smart contracts are fixed in the blockchain system in the form of code. Before forming the code, it is necessary to clarify the rules of the smart contract. Therefore, the first step in building a smart contract is to propose a mathematical model and the coding work is completed in the second step. Since the proposed open vehicle routing problem considers the environmental factors, environmental pollutants are analyzed in Section 4.1. Then, the objective function is proposed in Section 4.2.

Case study

This section discusses the urban distribution in the blockchain environment. A case in Chongqing (a city in China) is selected to verify the effectiveness of the smart contract. The following explains the reasons for choosing the enterprises in Chongqing as the case. The total cost of social logistics in Chongqing was 311.5 billion yuan in 2018, accounting for 15.3% of GDP, which is higher than the national average (Li et al., 2020b). Hence, reducing logistics cost is an important task. In

Main findings

In the traditional urban distribution process, the trust between the participants is weak, information sharing and security cannot be guaranteed (Zhang and Guin, 2020). The application of blockchain in the urban distribution can effectively solve the above problems, that has been confirmed by some researches (Lim et al., 2021; Liu and Li, 2020; Manupati et al., 2020). The P2P model promotes information sharing. The cryptography and consensus mechanism ensure the information security of the

Conclusion

This research proposes an architecture of blockchain-based urban distribution system for horizontal cooperation, which is consisted of three layers, including infrastructure, blockchain and application. Meanwhile, a smart contract is designed to match the resource of supply and demand to achieve the lowest total cost of distribution, which includes fixed, fuel, penalty, carbon emission and pollutant emission costs. To reach this goal, an open vehicle routing model of urban distribution taking

Appendix A. supplementary data

Appendix A, Table A1 shows the customer information. Table A2 shows the supplier location. Table A3 explains the value of variable in the model.

CRediT authorship contribution statement

Yan Li: Conceptualization, Methodology, Validation, Formal analysis, Investigation, Data curation, Writing – review & editing. Ming K. Lim: Conceptualization, Methodology, Validation, Writing – review & editing, Supervision. Chao Wang: Conceptualization, Methodology, Validation, Writing – review & editing.

Declaration of Competing Interest

We confirmed that there is no conflict of interests in relation to this manuscript.

Acknowledgement

This research is funded by the Chongqing Science and Technology Commission (Project no. cstc2019jscx-msxmX0189) and National Natural Science Foundation of China (72071006).

Reference (72)

  • R.M. Li et al.

    A comprehensive inventory of agricultural atmospheric particulate matters (PM10 and PM2.5) and gaseous pollutants (VOCs, SO2, NH3, CO, NOx and HC) emissions in China

    Ecol. Indic.

    (2019)
  • Z.Y. Liu et al.

    A blockchain-based framework of cross-border e-commerce supply chain

    Int. J. Inf. Manage.

    (2020)
  • F. Longo et al.

    Blockchain-enabled supply chain: an experimental study

    Comput. Ind. Eng.

    (2019)
  • Y. Niu et al.

    Optimizing the green open vehicle routing problem with time windows by minimizing comprehensive routing cost

    J. Clean. Prod.

    (2018)
  • H. Park et al.

    An effects analysis of logistics collaboration in last-mile networks for CEP delivery services

    Transp. Policy (Oxf).

    (2016)
  • J. Pereira et al.

    Blockchain-based platforms: decentralized infrastructures and its boundary conditions

    Technol. Forecast. Soc. Change

    (2019)
  • D.M. Pierre et al.

    Stochastic partially optimized cyclic shift crossover for multi-objective genetic algorithms for the vehicle routing problem with time-windows

    Appl. Soft. Comput.

    (2017)
  • A. Savelyev

    Copyright in the blockchain era: promises and challenges

    Comput. Law Secur. Rev.

    (2018)
  • M. Singh et al.

    Branch based blockchain technology in intelligent vehicle

    Comput. Netw.

    (2018)
  • L.C. Wang et al.

    Cryptographic primitives in blockchains

    J. Netw. Comput. Appl.

    (2019)
  • X. Wang et al.

    Blockchain-based smart contract for energy demand management

    Energy Procedia

    (2019)
  • Y. Xiao et al.

    A genetic algorithm with exact dynamic programming for the green vehicle routing & scheduling problem

    J. Clean. Prod.

    (2017)
  • H. Zhang et al.

    A hybrid ant colony optimization algorithm for a multi-objective vehicle routing problem with flexible time windows

    Inf. Sci. (Ny)

    (2019)
  • S. Zhang et al.

    Analysis of the main consensus protocols of blockchain

    Ict Express

    (2020)
  • D.W.E. Allen et al.

    International policy coordination for blockchain supply chains

    Asia Pac. Policy Stud.

    (2019)
  • J. Allen et al.

    Enabling a freight traffic controller for collaborative multidrop Urban logistics practical and theoretical challenges

    Transp. Res. Rec.

    (2017)
  • C. Bai et al.

    A supply chain transparency and sustainability technology appraisal model for blockchain technology

    Int. J. Prod. Res.

    (2020)
  • J.R. Brown et al.

    Carbon emissions comparison of last mile delivery versus customer pickup

    Int. J. Logist. Res. Appl.

    (2014)
  • D. Bumblauskas et al.

    A blockchain use case in food distribution: do you know where your food has been?

    Int. J. Inf. Manage.

    (2020)
  • R. Cole et al.

    Blockchain technology: implications for operations and supply chain management

    Supply Chain Manag

    (2019)
  • A. Dolgui et al.

    Blockchain-oriented dynamic modelling of smart contract design and execution in the supply chain

    Int. J. Prod. Res.

    (2020)
  • N. Drljevic et al.

    Perspectives on risks and standards that affect the requirements engineering of blockchain technology

    Comput. Stand. Interfaces

    (2020)
  • R.F. Fachini et al.

    Logic-based Benders decomposition for the heterogeneous fixed fleet vehicle routing problem with time windows

    Comput. Ind. Eng.

    (2020)
  • H.H. Feng et al.

    Applying blockchain technology to improve agri-food traceability: a review of development methods, benefits and challenges

    J. Clean. Prod.

    (2020)
  • Z. Fu et al.

    An intelligent electric vehicle charging system for new energy companies based on consortium blockchain

    J. Clean. Prod.

    (2020)
  • R.V. George et al.

    Food quality traceability prototype for restaurants using blockchain and food quality data index

    J. Clean. Prod.

    (2019)
  • Cited by (0)

    View full text