Collaboration Concepts for Co-Modality

From CO2 to CO3

Bestfact conference Barcelona 11 june 2015

Frans Cruijssen, ArgusI Workpackage leader CO3

Efficiency of EU road transport

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Cost of inefficiency

Efficiency of EU road transport

Overview of efficiency of EU road transport

World Economic Forum Supply Chain Study 2009

• 24% of good vehicles in the EU are running empty

• Average loading of the rest is 57%

• Overall efficiency: 43%

• Flow imbalance could only explain half of this loss

• How long can this go on?

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Between September 2011-2014, the European

Commission actively promotes and supports horizontal collaboration

“Collaborative Concepts for Co-Modality (CO³)” is a FP7 sponsored consortium to create an operational and legal framework, business

models, an educational package and a number of inspiring test implementations for horizontal collaboration and bundling in

transport and logistics. The ultimate goal is to make European logistics more competitive and more sustainable.

CO3 Consortium

High level industry board

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HLIB Mission: • Review and discuss CO3 milestones and results

• Provide valuable market feedback for development and success of CO3

CO3 main deliverables

• Operational framework for Horizontal Collaboration (synergy, gain sharing)

• Legal framework for Horizontal Collaboration

• Development of appropriate business models and the role of a trustee

• Validation of framework with test projects

• Mental shift + new market functions!

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Our proposition in CO3

“If you want to be incrementally better: be competitive.

If you want to be exponentially

better: be cooperative.”

(this only goes for companies with mature supply chains)

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Collaboration with external companies is KEY to go BEYOND our internal efficiencies.

External

Internal

Efficiency

Collaboration

Why collaboration makes sense

Dimensions of Supply Chain Collaboration

Collaboration with and between LSPs

Horizontal collaboration

Vertical collaboration

Core individual company capability

Between companies at the same level in the supply chain: within same sector / in different sectors

Between companies at different levels in the supply chain

Between business units –

use of control towers

Source, Prof. Alan McKinnon

How to organize this? Roles and responsibilities

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• The trustee is an essential new player to manage horizontal collaboration

• It has two roles:

• Online: Real-time orchestration of daily collaboration processes

• Offline: Neutral external support to the collaborating shippers

• Examples of online functions:

• Loads combination

• Prioritization

• Real-time network synchronization

• Single contact point

• ICT Interfaces

• Gain sharing

• Examples of offline functions:

• Matchmaking

• Create critical mass

• Stability and fair gain sharing

• Legal compliance

• Entry and exit

• Conflict resolution

• Data confidentiality

A new role in logistics: the neutral trustee

• Combining containers on trains

• Balancing loads • Complex routes optimization

(shuttles, Triangles etc) • Combining loads to obtain

game changing scale (e.g. creation of new trains)

• Sharing Storage Space • Combining Pallets in a trailer • Combining Stackable Pallets in

a Trailer • Combining dead pile loads • …

Varying Levels of Collaboration Complexity

Examples • Joint distribution or linehaul

• Backhauling

• Modal shift/inventory pooling

Background

• Both Tupperware and P&G have manufacturing sites and DC’s in Belgium

• Both companies ship significant volume to Greece

• Product characteristics of both companies are opposites – Heavy vs. Light

Case P&G and Tupperware

Source: P&G at CO3 conference may ‘14

Situation before

2 shippers

Similar lanes (corridors)

2 separate supply chains

Comparing the flows Tupperware P&G Sending site Aalst, Belgium Mechelen, Belgium Receiving site Thiva, Greece (100km from Athens) Athens, Greece Mode Road Intermodal Equipment type 120m3 combi-trailers 45ft containers Loads per year ~80 ~300 Transit time 3-5 days 6-7 days Frequency 1x week 3x week Loading method Bulk Palletized Load preparation ~27 man hours ~1 man hour Volume utilization ~85% ~50% Weight utilization ~30% ~95%

Full in Volume Half-empty in Weight

Common flows – 98% overlap

Situation after

2 collaborative shippers

P&G managed X-Dock

Joint intermodal corridor

The best of both worlds

Project results & benefits

>200 Tons CO2 reduction

Cube & Weight Fill improvement

55% 85% by heavy & light mixing

Collaborative Savings

~17% Cost saving on total lane costs

Moving to

Intermodal solutions for partner

Saved

150,000 truck-km by taking trucks off the road

Road bundling JSP and Hammerwerk

On our website

www.co3-project.eu

More information Join the discussion

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