Transportation cost is key
Transportation cost represents the highest cost of supply chain ahead of labor and real estate.
Indeed, even if it is easy to assess the mileage to be traveled, which is just depending of a given location, it becomes more complicated once the occupancy rate of the truck has to be taken into account, considering that it can vary by as much as 100%, depending on whether the truck is 50% or 100% full.
Taking into account if trucks coming empty or leaving empty, depends on whether it is a question of collection or delivery, as well as the competitive context of carriers has an impact on the cost per kilometer.
Logisticians are always looking to reduce the transportation cost. The pooling and massification are, obviously favorable solutions to mitigate this cost.
The pooling process
It happen when several manufacturers, who have not individually the critical size, will organize themselves, in order to have a truck 100% full.
For example, manufacturers in the agri-food sector or others delivering the same hypermarkets have an interest in unsing the same carriers.
Logistician operators acting on behalf of manufacturers who decided to outsource have an interest in developing XXL platforms in which they will welcome “industrialists” from the same economic sector and therefore sometimes competitors, with the same distribution targets. They will thus be able to consolidate transport.