City Logistics and Traffic Management: Modelling the Inner and Outer Urban Transport Flows in a Two-tiered System

City logistics deals with the logistical aspects involved in urban freight transport and related operations. These include, in addition to transport, handling and storage of goods, the management of inventory, and all related pickup and delivery operations. Traffic management and control deals with all operational aspects related to the traffic flow and (re)design of infrastructure. These aspects include the possibility to turn normal traffic lanes into reserved bus lanes or to define special routes to be operated only by freight transport. In this paper we discuss and model one of the effective management strategies for city logistics and traffic management in a metropolitan area. This strategy is based on a two-tiered system for which we propose an optimization model, in natural variables, and discuss some of its related challenges and solution approaches. We then propose an instance generator for this optimization model and show the solutions of one of these instances.