Collaborative logistics models in urban areas: Current status and evidence from the Fast Moving Consumer Goods sector

Abstract

Collaborative logistics, especially in urban freight distribution operations, is gaining traction as a way to increase logistic efficiency and decrease costs. Our aim is to identify distinctive types of logistics collaboration between logistics service providers (LSPs), manufacturers and retailers, discuss their applicability and evaluate their benefits in both logistics and environmental terms. By conducting eight in-depth interviews with logistics practitioners, we firstly identify three different types of collaboration that involve stakeholders sharing the use of vehicles as well as their storage areas. The difficulty in finding a reliable party to lead the collaboration, unhealthy competition, the immaturity of the market and the lack of collaboration culture of the 3PL companies are the impediments that respondents agree with most. However, empirical evidence on the corresponding benefits of collaboration seems to be adequate for overcoming the suspiciousness and reluctance in the sector. Building on the evidence from the in-depth interviews, we formulate different what-if scenarios for the suggested types of collaboration and we estimate their benefits based on actual freight distribution data.