Urban freight systems are experiencing many problems due to higher levels of service and lower costs being demanded by shippers, with carriers having to operate in increasingly congested road conditions. Trucks operating in urban areas produce many negative impacts for society in terms of emissions, crashes, noise, and vibration. City logistics aims to globally optimize urban freight systems by considering the costs and benefits of schemes to the public as well as the private sector. The concepts of city logistics are introduced, and an outline is presented of some models that have recently been developed to predict the consequences of intelligent transportation systems. In particular, a stochastic vehicle routing and scheduling procedure that incorporates the variation of travel times is described. Results indicate that this approach can lead to significant reduction in operating costs by carriers as well as shorter routes with fewer trucks and increased reliability for customers. This procedure also reduces emissions and fuel consumption.