Background: The current phenomenon of urban growth has a major impact on the quality of life of the citizens. This leads to several crucial challenges in urban areas such as an overexploitation of the road infrastructure which results in congestion, air and noise pollution. Sustainable urban development has the target to overcome these challenges. City logistics is part of this development and aims to mitigate the negative effects caused by urban freight transport.

Purpose: The purpose of this thesis is to explore the current state of freight transport in urban areas by comparing Sweden and Germany to identify the major challenges and examine the management approaches logistics companies take towards city logistics to gain a deeper understanding.

Method: This research follows an inductive approach as it aims to understand the phenomenon of city logistics. A qualitative study is conducted which has an exploratory research nature in order to explore the perception of logistics companies on city logistics in depth. We conduct a multiple case study and the cases Sweden and Germany were chosen to frame our research and to ensure a structured approach to collect and analyse data. The primary data is collected through semi-structured interviews, to receive in-depth information about the phenomenon. The findings are analysed in a within-case theme analysis and cross-case theme analysis to provide detailed insights into city logistics in each country as well as to present differences and similarities.

Conclusion: The comparison of Sweden and Germany showed that even though the contexts differ, the challenges faced by logistics companies as well as the approaches to the management of city logistics are the same in both countries. The identified challenges of urban freight transport create the urge for city logistics. Efforts directed at city logistics can be differentiated into operational measures and strategic projects. Logistic companies manage the realisation of these efforts with the following four steps: planning, implementing, assessing and improving. The results show that the two efforts currently are at different stages, the measures have already reached the improvement stage, while the projects are still in the implementation phase.