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Optimised and pooled logistics, co-transportation with other companies

Optimised and pooled logistics, co-transportation with other companies
© industrieblick, image #105471015, source: Fotolia.com
Resources:
Energy, Materials, Carbon
Sector:
All sectors
Cost:
Medium cost
Annual saving:
15 - 20 %
Payback time:
0.08 - 5 Year(s)
Resource savings: Raw material:
Fuel consumption savings of up to 50 %
Associated cost savings: Raw material:
15 - 20%
Payback time:
Payback depends on the kind of service delivered; ad-hoc partnerships can give great results but require management and trust
Co2 emission reduction:
35-50 %
Premises and operation areas:
Supply operations
Size of company:
Micro (less than 10), Small (less than 50), Medium (less than 250)
Advancement in applying resource efficiency measures:
Intermediate, Advanced
One off investment:
2000 - 4000€
What is in it for you:
Cost reduction, simplified management, minimised downtime, resource saving.
Descriptive information:

Trends like online shopping, just-in-time production and delivery, and increasing warehouse costs are forcing logistics operators to deliver more frequently, which often means under-capacity loading. At the same time, fuel and vehicle costs are going up and consumers are conscious of the environmental impact of the products they buy. Logistics pooling can help companies to maximise loads and minimise the number of trips and distance travelled, resulting in lower overall transport (fuel, maintenance) and personnel costs.

According to Eurostat, 25 % of truck kilometres in EU countries run empty. For example, in the UK food supply chain only 52 % of the available space on loaded trips is actually used. Larger trucks, which can carry a payload of up to 29 tonnes, transport on average only 17.6 tonnes when loaded and 12.7 tonnes if allowance is made for empty running.

These statistics show that there is plenty of room for improvement, in many sectors. Multi-mode partnerships aimed at maximising capacity (on outbound and return trips) can accomplish the following results: 

  • Reduce costs by 15 %
  • Cut carbon emissions by as much as 50 %
  • Improve delivery frequency by a factor 2 to 5
  • Reduce stock levels by 15-20 %

What's more, enterprise management and operations can focus on core business through simplified logistics (single point of contact, track and trace).

Pooling requires more planning than traditional logistics and can be costly in terms of time spent setting up and managing the collaboration. But with the emergence of smart online applications to link supply and demand, this task can be performed by so-called 3rd or 4th party logistics providers (3PL or 4PL). These services can bundle multiple, higher-volume shipments from different origins, making multi-mode transportation (train, ship, truck) accessible to even SMEs who would otherwise struggle to reach the scale required.

Four general principles apply to increase logistics efficiency:

  1. Maximising truck payload: reduces the amount of fuel spent per unit shipped
  2. Reducing empty running: shipments that can be picked up when the vehicle returns from its destination
  3. Minimising downtime: making sure vehicles are fully used so the fleet can be reduced
  4. Using the right vehicle size and type: adjust vehicle choice to maximise payload per trip

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