| Issue | Challenge |
| Freight volumes | Capacity of urban freight transport systems (congestion). Lower driving speeds and frequent disruptions (reliability). Distribution sprawl (space consumption). |
| Nature of freight distribution | Smaller volumes and time-sensitive freight (frequency and repetitiveness). Cold chain (shipment integrity). E-commerce (home deliveries). |
| Environmental issues | Mitigate environmental externalities (emissions, noise). Growing demand for reverse logistic flows (waste and recycling). |
| Social issues | Mitigate social disturbances (safety and health). Passengers / freight interference (conflicts). |
| Policy and regulation | Competition and conflicts (access and zoning). Access (allowable vehicles, streets and time windows). Zoning (land use, freight distribution clusters, urban consolidation platforms). |
The growth of the amount of freight circulating within urban areas has exacerbated congestion as goods movements, like passengers, contribute to congestion. Urban freight distribution commonly accounts for the last mile in contemporary supply chains, but this takes place in a setting where many constraints are exacerbated. The propensity of large urban areas to have high congestion levels challenges a key issue in logistics, which is the reliability of distribution. This is particularly the case for the disruptions and lower driving speeds that urban congestion imposes, making urban freight distribution prone to inefficiencies.
Urban freight distribution is subject to smaller volumes with time sensitive freight necessary to replenish a recurring demand as inventory levels in urban stores, particularly those of small size, tend to be low. In central areas, limited storage space is available so goods are brought in regularly from distribution centers at the periphery. Repetitiveness is a salient issue as a regular flow of deliveries must be maintained in spite of peak hour congestion. The diffusion of e-commerce in developed countries also created new forms of demands and new forms of city logistics with a growth in the home deliveries of parcels.
Since urban areas are large consumers of final goods, the issue of reverse logistics deserves attention in the form of the collection of wastes and recycling. From a social standpoint, the interactions between people and freight in cities create many disturbances related to health and safety (accidents). In several cases, the expansion of freight related activities and the growing intensity of urban freight movements can be a source of competition for the usage of scarce urban land and of conflicts between freight and non-freight stakeholders.
From a regulatory perspective urban areas are highly constrained with a variety of rules related to zoning, emissions and even access conditions to roads and terminals. High population densities imply a low tolerance for infringements and disturbances brought by freight distribution and are thus prone to regulatory pressures.