Firms cut their costs by sharing trucks

By Nicholas Robinson contact

- Last updated on GMT

Too many firms are keeping quiet about collaboration in logistics
Too many firms are keeping quiet about collaboration in logistics

Related tags: Allied bakeries, Cost

Collaboration between food manufacturers that share distribution activities with competitors and others to reduce costs should be more widely publicised to help more firms adopt these practices, the Freight Transport Association (FTA) has urged.

It is hard to measure the food industry’s success in cutting pollution and costs through load-sharing because it wasn’t something firms advertised, said Rachael Dillon, climate change policy manager at the FTA. However, she added: “There are some well-known examples​ [of freight sharing], such as Nestlé and United Biscuits, in the UK.”

“Anecdotal evidence from FTA members indicates that other collaboration already takes place, but the industry does not necessarily shout about it.”

As well as the Nestlé and United Biscuits link-up, Allied Bakeries had also started to distribute third-party products to its customers, the company's general manager for the eastern regions Russell Zaple told Food Manufacture.

£31M investment

Allied Bakeries’ move, which followed a £31M investment at its Stevenage plant, has seen the company partner with some of its suppliers, said Zaple.

“There’s a number of smaller suppliers that we are able to consolidate with and deliver their products to our customers,”​ he said.

“It makes it cheaper and more efficient for them and for us too and it’s beneficial for our customers because they’re just receiving the one delivery, rather than a series.”

Allied Bakeries refused to disclose what other companies it had partnered with on shared deliveries or which customers were being supplied with goods.

While the FTA and other freight organisations encouraged such tie-ups between companies, setting one up could be time-consuming, expensive and would make a simple distribution operation much more complex, Dillon warned.

“Naturally, there are also issues about confidentiality and fear of losing competitive advantage, which can tend to stall progress as can difficulty in finding suitable partners to share loads,”​ she said.

Obstacles and opportunities

Despite the potential obstacles to cross-company distribution partnerships, setting them up had been identified as an important opportunity and highlighted at the FTA’s annual Carbon Conference last May, Dillon said.

A recent EU-funded research project had also exposed the potential for “horizontal collaboration”​, she added.

“This goes beyond a one-to-one relationship or a logistics service provider consolidating freight flows, but requires a neutral third-party to instigate activity,”​ Dillon said.

Projects such as this could help companies work together, as competition and confidentiality barriers could be removed from the relationship, she added.

Related topics: Supply Chain

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