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Future-Proofing your Supply Chain through Horizontal Collaboration

Bundling freight flows across multiple manufacturers to create logistics synergies and achieve significant improvements in cost, service level and sustainability is a strategic driver of AIM’s supply chain activities. This was the theme of a joint workshop by AIM and its Belgian Association, BABM, held on 26 February 2015.

Horizontal logistics cooperation, even between competing companies, is increasingly acknowledged by public authorities as an economic/ecological value driver with ultimate benefits for consumers and society as a whole. EU competition law leaves significant opportunity for logistics collaboration, provided a number of key conditions are met, e.g. no abuse collective dominance of collaborating partners, involvement of a neutral third to manage the project and information flow, compliance programme as a visible part of the collaboration agreement, etc.

With the average capacity utilisation of trucks still at just over 50% there is significant opportunity for better asset utilisation and savings, as well as CO2 reduction. Branded goods manufacturers are involved in multiple collaboration schemes, a number of which were presented at the workshop, including P&G and Tupperware sharing available space in rail transport to Greece; Mondelēz International, Nestlé and Colgate-Palmolive creating primary freight trains across Europe from East (Poland) to West (via NL to UK) and back; PepsiCo and Nestlé delivering chilled products to Belgian retailers; Mars and United Biscuits sharing warehouse space and delivery vehicles to retailer distribution centres with service level improvements of 0.5%, a 20-40% reduction of inventory and truck fill increase by 30-35%.

All of these collaboration schemes are open to other interested partners and would benefit from additional participation. The workshop provided an opportunity to make these visible to branded goods companies who often lack visibility of existing collaboration schemes. The session was facilitated by freight flow orchestrator Tri-Vizor who will carry out an analysis of logistics flow data of workshop participants (funded by BABM) to identify compatible collaboration partners and opportunities.