The city is jointly a place of production, distribution, and consumption of material goods and will thus generate material flows. The role and extent of these functions vary according to the historical and socioeconomic context of each city, commonly involving a specialization (e.g. financial cities, manufacturing cities). Globalization has changed the functions of production, consumption, and particularly distribution by expanding its role with terminals and logistics zones. Some cities, namely global cities, have become prime financial, cultural, transportation, and political centers, with production taking a more marginal role.
With the growth of long-distance trade, many cities also play an intermediary role with the port and airport facilities articulating the commercial flows of vast markets. For instance, gateway cities interface global and regional freight distribution. The functions of consumption, production, and distribution are associated with various material flows, each representing a form of city logistics. For instance, retailing relies on urban deliveries originating from distribution centers, which themselves are likely to have been supplied through terminal haulage. The intensity level of urban freight distribution is usually clustered around large specialized generators, which come in four major types:
- Terminals, such as ports, airports, and railyards, are highly localized entities with access points often supporting high traffic levels. Since terminals handle a wide variety of freight, it can be expected that they will enter urban areas as bulk, containers, full truckloads (TLs), and less than truckloads (LTLs). The market area of transport terminals is defined as the hinterland, which can involve destinations (logistics zones and manufacturing districts) within the city itself or flows having to transit through urban areas on their way to other destinations. The impact of a transport terminal on city logistics is obviously related to the intensity of the terminal activity, the supply chain it services, and the extent of its hinterland.
- Logistics zones include warehouses, sometimes associated with clustered distribution and light manufacturing activities. Higher consumption levels and global supply chains have been a driving force in the setting and expansion of logistics zones. Co-location with a terminal facility has been a driving force, implying more efficient interactions because of proximity; freight has less propensity to enter urban areas. High land prices near terminals and central areas have also incited the development of greenfield logistics zones in peripheral areas, sometimes far away.
- Manufacturing districts. In the contemporary setting, many production activities are related to global processes and elements of global value chains since they may produce finished goods. Still, they are more likely intermediate goods (e.g., parts). They are generators of producer-related urban freight movement involving all possible forms of road transport. Manufacturing districts are commonly associated with transport terminals, particularly for heavy industry. Still, manufacturing and logistics activities are often mixed as pure manufacturing or logistics areas are rare; standard manufacturing activities are common in logistics areas. The distinction between a logistics and a manufacturing zone can thus, on occasion, be blurred. For instance, many logistics zones were developed as industrial zones that attracted distribution centers instead.
- Commercial districts. A core component of the urban centrality and the destination of the bulk of urban passenger flows. They concern consumer-related freight movements, mostly through retail activities usually supplied through LTLs (e.g. delivery vans and trucks). The clustering of office towers and large institutions (seats of government, universities, museums, etc.) is also a large generator of freight demand, such as parcels. Some central business districts also involve adjacent freight intensive activities such as rail yards and even port terminals, particularly in older cities or in cities having an important gateway function. As cities are increasingly polycentric, several commercial districts, such as urban subcenters, have emerged.
Therefore, urban freight generators are commonly interrelated. For instance, a port district will involve maritime terminals but also nearby distribution centers and industrial activities. The same applies to airport districts that can experience a concentration of distribution centers and commercial activities.