Transport collaboration or as it is also known, ‘horizontal collaboration’, is a strategic approach to managing and optimising urban and suburban flow of goods which has emerged as a promising solution to the complex challenges of modern logistics. By coordinating multiple parties, including manufacturers, retailers, and transport companies, these operations aim to streamline processes, reduce costs, and enhance environmental sustainability. However, the path to successful collaboration is fraught with obstacles, ranging from trust issues and information asymmetry to technical difficulties in real-time route optimisation. This article delves into these aspects, providing a comprehensive analysis of the benefits and challenges of transport collaboration operations, with a particular focus on the problems faced outside urban areas.
The Promise of Transport Collaboration
At its core, transport collaboration is about sharing available capacity to achieve common goals. By pooling transportation resources, companies can significantly reduce the number of vehicles on the road, also leading to lower fuel costs and less maintenance. This not only translates into substantial cost savings, it also contributes to improved efficiency. By coordinating schedules and routes, companies can optimise delivery windows and improve service levels, thereby enhancing customer satisfaction.
Moreover, horizontal collaboration plays a crucial role in promoting environmental sustainability. With fewer vehicles on the road, carbon and NOx emissions are significantly reduced, contributing to the global fight against pollution. This is particularly pertinent in today's context, where companies are under increasing pressure to minimise their environmental footprint.
The Hurdles on the Road to Collaboration
Despite its apparent benefits, transport collaboration is not without its challenges. One of the main hurdles is the lack of trust between collaborating parties. This is particularly evident in transactional relationships between Shippers and Logistic Service Providers, when absence of long term contracts doesn’t stimulate compliance. Moreover, shortage of trust in these circumstances is also exacerbated by the industry’s nature of commoditised and highly competitive service offerings and never ending race to the price bottom.
‘Information asymmetry’ presents another significant challenge. Companies often seek to protect their commercially sensitive data, making it difficult to share the necessary information for effective collaboration. This perception is particularly prevalent among manufacturers within the same product category or between retailers and their suppliers/vendors. Given their competitive positions, these parties are often reluctant to share information and plans, hindering the potential for effective collaboration and capturing of mutual benefits.
Technical challenges also abound, particularly when it comes to planning and replanning optimised routes in near real-time. This requires high processing speed and the optimisation of complex mathematical problems, which can be daunting even for systems with advanced technological capabilities.
The Unique Challenges Outside Urban Areas
When it comes to transport collaboration outside urban areas, additional challenges come into play. These are often driven by the lack of synchronisation of loading and delivery windows for Less Than Load (LTL) loads across a wide geographical spread of shippers, as well as differences in their business requirements and priorities. Absence of geographical clustering spread and varying business requirements make it difficult to coordinate schedules and optimal routes, leading to inefficiencies and increased costs.
Case Studies: Industry Attempts to Implement Transport Collaboration Solutions
Several attempts have been made in the industry to implement transport collaboration solutions. One notable example is the "Smart Freight Leadership" initiative, as mentioned in the "Rethinking deliveries summary report" by Transport for London. This initiative involves stakeholders working together to report and set targets, reduce emissions by implementing action plans, and collaborating and advocating for long-term public policy. However, despite its promising approach, the initiative has faced challenges in relationships among collaborating parties and information asymmetry, leading to limited success.
Another example is the "Synchromodality" concept, which involves stakeholders of the transport chain actively interacting within a cooperative network to flexibly plan transport processes and switch in real-time between transport speeds and modes tailored to available resources and needs. While this concept holds great potential, its implementation has been hampered by the same issues of trust as well as by limitations and timing of information sharing.
Conclusions and Recommendations
In conclusion, while transport collaboration holds significant upside, it also faces considerable operational and relationship challenges. To overcome these challenges, it is recommended that companies adopt different and more effective operational and decision-making frameworks. These should involve clear communication and transparency, the establishment of trust between collaborating parties through 3rd party trustees which will use advanced technological capabilities to optimise and manage co-shipment routes. Such 3rd party intermediaries could offer secure solutions to manage data, ensuring that commercially sensitive information is protected while still enabling effective collaborative route planning.
Moreover, investments in advanced technologies such as Artificial Intelligence (AI) / Machine Learning (ML) to progressively identify better optimised routes in real-time will be necessary. These technologies help processing large amounts of data quickly and accurately, enabling planners and transport managers to make informed decisions and respond swiftly to changes in demand or supply.
Finally, companies should consider engaging with government authorities and industry bodies to advocate for policies and regulations that support transport collaboration. This could include incentives for companies that engage in collaboration, as well as regulations to ensure fair competition and protect commercially sensitive information.
In the end, the road to successful transport collaboration may be challenging, but the potential benefits make it a journey worth undertaking. By leveraging advanced technologies and adopting effective partnership strategies, companies can overcome the hurdles and unlock the full potential of transport collaboration operations.