Collaborative DistributionCollaborative distribution usually involves multiple shippers
combining shipments to create truckloads rather than ship
individually by more expensive less-than-truckload (LTL). It is an
advance form of cargo consolidation often requiring Third Party
logistics providers (3PLs) since
the cargo can involve several suppliers, customers and freight
forwarders. For instance, instead of having two trucks travelling
LTL going to the same distribution center and coming from a similar
origin, there is a possibility to have that load consolidated into a
single full load. At start there
must be a match between the type of cargo being transported since,
for instance, refrigerated cargo loads cannot be effectively
combined with non-refrigerated cargo. There are two main categories
of collaborative distribution:
Back-haul matching. The goal of this
collaboration is to match different distribution legs so that
costly empty back-haul movements are minimized. For instance, on
the above figure two legs (A-B and D-C) are serviced
independently and in both case the drivers return empty for the
whole back-haul movement. By matching backhaul opportunities the
length of empty trips is reduced. The range to pickup a
back-haul load must be within an acceptable limit as otherwise
the benefits of getting a back-haul movement as opposed to an
empty trip could only be marginal.
Sequence matching. The goal of this
collaboration is to match trips towards a customer (e.g. a
distribution center) that are done separately and less
frequently into a sequence which is longer but can be done more
frequently. This enables lower inventory carrying costs as well
as the required warehousing space since suppliers can now ship
less quantities, but more frequently. Sequence matching can also
involve one supplier and several customers and represents a
common problem in city logistics.
The most suitable cases for collaborative distribution concern
flows within a large corporation (e.g. retail or food) since the
it can enforce such strategies to their transport service
providers. It is also particularly suitable for city logistics since
the proximity of suppliers and customers offers opportunities for
consolidation, particularly sequence matching.
