Increasing vehicle fill rate to increase transporters’ profit margins and reduce carbon footprint is a recurring item on today’s agenda. Solutions do exist, even for the last mile!
«If all goods vehicles in circulation were filled to 90% of their full capacity there would be 2 or perhaps even 3 times less lorries on the French roads» estimated Jimmy Bils, CEO or the transport and logistics group Bills-Deroo(1) in a recent interview. Increasing the fill rate of lorries is an ongoing concern among road transporters for an obvious reason: given fixed costs, the higher the fill rate, the more profitable the intervention. This is the more true since, in a highly competitive market, long distance transport operators cannot – to the benefit of another - easily pass on excess costs associated with journeys that are under-loaded on the way out, and perhaps empty on the return journey. Nor can they afford to refuse to provide the service or impose additional delays on their customers just because their lorry is not full. For
The implications of all this provide us with the underlying explanation of why empty or under-capacity freight represents 15% of domestic traffic, and 30% of international traffic in Europe (source: Eurostat). To the direct economic impact of this, we can naturally add the environmental one! Whether full, partially loaded, or empty, lorries are fuelled by diesel for the most part, and are therefore inevitably responsible for high levels of greenhouse gas and polluting particle emissions.
For more than a decade, transport sharing occupies a central place in literature published by the profession. To cite just one example, of 66 issues of Supply Chain Magazine published between January 2011 and August 2017, 65 raise the issue of sharing and present it as «THE solution to develop(2)». Today, the messages being received are unanimous: to reduce the number of journeys and under-loaded or empty trucking runs, load sharing would suffice. And certainly this would appear to be plain common sense: if you cannot manage to fill your lorry with the merchandise of a single customer, you can nonetheless complete the load with that of other customers.
And yet, is it really possible for every transporter to share their loads? This remains to be proved. It is not completely by chance that this solution presented year after year as a remedy for all evils remains «to be developed». For this to happen, a certain reticence on the part of some transporters needs to be addressed. In the first instance, those of shippers who are apprehensive about their merchandise being convoyed with that of other companies that don’t necessarily have the same final delivery point, so perhaps giving rise to extra detours and longer journeys overall. It is clearly a lot simpler when one loader taking the initiative is in charge of the routing organisation. This is what PepsiCo has been doing for ten years now at departure points from its factories in, admittedly, quite a particular context. In some of its factories, PepsiCo manufactures distributor brands alongside its own. Instead of leaving these distributor customers to manage transport on their side, PepsiCo offers them a shared transport option: lorries leaving their factories carry both categories of merchandise, and channel them without any intermediate stop on the journey, to programmed distribution points or the distributor’s depot.
While not all configurations can be this ideal, we need all the same to recognise that sharing or mutualisation is making progress, notably thanks to the multiplication of LTL networks (Less Than Truck Load) and some platforms enabling transporters to find carriers who can fulfil their load requirements, and shippers to send small quantities without being penalised in terms of price or delivery timescales. On what condition? They have to accept their requirements are being made public so their information is shared on platforms and sites that are potentially frequented by competitors. Not everyone is prepared to go down this route…
As the interest for all concerned is of course a logistics chain where all vehicles are loaded to the maximum, massification is the other buzz word in the world of transport. Like mutualisation, massification a priori means that less lorries need to travel, and that they can do so profitably – on condition they can be filled! which brings us full circle back to the question of mutualisation… and the desired result of a
Whatever else, we need to understand what is behind the word «massification». Are we talking about weight, or volume? Both these parameters have to be considered. If you load 30 or 33 palettes of heavy products (drink or washing up liquid, for example) in a 90m3 trailer, you are almost at the limit in terms of weight. On the other hand, half the volume is empty because you can’t build two storeys of palettes without exceeding the maximum load. In long distance transport this is an ongoing problem! The solution is to combine mixed cargoes, filling any spare volume with lighter goods, which in effect is another form of mutualisation. This is the option chosen by Proctor & Gamble in its lorries between Belgium and Greece: the lower space in the lorries is filled with palettes of heavy goods to a height of 1 metre, representing about 25 tons and the rest of the height is filled with batches of babies’ nappies, voluminous but light. Here again, it is a lot easier when there is only a single shipper involved, which is conveniently the case for regular supply chain configurations…
It is typically in this type of setup that ‘two-storey’ car transporter type trailers are of interest. While these can be efficient when the utilisation of the height is optimized, so limiting voids, they have one major disadvantage: the sites for departure and arrival have to be equipped for easy loading and unloading of this type of vehicle. Because suitable infrastructures are not available at most customers’ premises, it seems that the upper bridge is often unused…
Looking at the problem from all sides, we need to include one particular factor that is easily overlooked, and not readily soluble: that even when a lorry embarks on a route carrying a load that could be described as optimum, it will start transporting empty space as soon as the first package has been delivered.
In view of the above, we can see that sharing and massification go hand in hand, providing answers to problems associated above all with
Ways to minimise empty or partially loaded journeys really and truly exist. Behind their apparent diversity, they are in reality complementary and have two common points: everything depends, on the one hand, on consolidating the demand for transport for a given territory, and on the other, on precise localisation of loading and delivery points. This geographic baseline is indispensable for the purpose of building realistic routes, taking the constraints of the terrain, operating realities, and strategic priorities into account. Whether the aim is to deliver to the maximum number of customers while travelling the least number of miles, or to maximise utilisation and fill rate for your vehicles, geography is the key to optimization. The issue that remains for shippers/orderers - notably e-commerce actors - to tackle themselves is the pressing problem of the «hidden void» inside packaging: the practice of using packaging that is far larger than the goods they contain needs to be addressed. Find out how our client
(1) 24 June 2020, on the occasion of the SiTL 2020 conference – Green Logistics.
(2) Calculation/Analysis conducted by Kanyarat Nimtrakool in the framework of his PhD thesis(Normandy University) reiterated publicly in March 2018.