114 International Journal of Supply and Operations Management IJSOM May 2021, Volume 8, Issue 2, pp. 114-133 ISSN-Print: 2383-1359 ISSN-Online: 2383-2525 www.ijsom.com Economic and Ecological Optimization of the London Urban Logistics System Considering Infection Risk during Pandemic Periods Xuan Feng a, * a School of Strategy and Leadership, Coventry University, Coventry, UK Abstract Urban delivery, especially the last-mile delivery, has become an increasingly important area in the global supply chain along with the boom of e-commerce. Delivery companies and merchants can introduce some innovative solutions such as the equipment of autonomous vehicles (AVs) to decrease their operating costs, environmental impact, and social risks during the delivery process. This paper mainly develops a mathematical model to get the best allocation of AVs among city logistics centers (CLCs) as a mixed delivery method. The advantage of the presented model stems from considering the equipment cost, the delivery cost, and the CO2 emission, which is measured through social carbon cost (SCC). In addition, this paper establishes a risk model considering the impact of seasonal variations to evaluate the infection risk of delivery during pandemic periods for four potential delivery scenarios: customers going to CLCs, ordering online and picking-up at CLCs, delivering by traditional vehicles (TVs), and delivering by the mixed method with the optimal allocation of AVs. The research finds the optimal allocation for a London case, reveals the relationship between the nominal service capacity (NCpa) of CLCs and the optimal number of CLCs equipped with AVs, concludes that the more CLCs are equipped with AVs, the fewer CO2 emissions and the fewer citizens will be infected, and provides some managerial insights that may help delivery companies and merchants make appropriate decisions about the allocation of AVs. Keywords: Urban logistics; Cost optimization; CO2 emission; Infection risk; Net Present value. 1. Introduction In recent years, the rise of e-commerce has led to a super urban delivery market (Akeb et al., 2018) and an increasing number of logistics service providers (LSPs) who compete over market shares and customer satisfaction (Scherr et al., 2019). Although the development of urban logistics has promoted the prosperity of the world economy, the increasing transportation contributes a lot to greenhouse gas (GHG) emissions (Li et al., 2019). Reducing GHG pollutions, especially CO2 emissions, is one main challenge face by businesses today to improve economic sustainability (Guerrero et al., 2013). Moreover, there has been an increasing social concern on environmental protection not only among environmental advocacy groups and policymakers but also among enterprises who have begun to consider ecological issues parallel to their economic performance (Abbasi and Nilsson, 2016; Rao et al., 2015). Therefore, LSPs are under pressure to decrease their delivery cost (Palak et al. 2014) and to reduce the impact on the environment (Savelsbergh and Van Woensel, 2016). Furthermore, minimizing the infection risk of both customers and staff is a growing challenge that LSPs are facing in encountering an epidemic situation such as the Coronavirus 2019 (COVID-19) pandemic. This challenge has become an international public health issue because the outbreak of COVID-19 has affected worldwide people and has evoked their vigilance against the infection risk in their daily logistics activities, especially when they contact unfamiliar individuals such as those that they meet during the process of delivering or receiving parcels (Elavarasan and Pugazhendhi, 2020). * Corresponding author email address: fengxuan1995@gmail.com DOI: 10.22034/ijsom.2021.2.2