New business model for sustainable freight  

New business model for sustainable freight  

TRI-VIZOR encourages companies to pool their transport and logistics capacities, generating both environmental and financial benefits.

Freight transportation in Europe is massively inefficient. Less than half of the cargo capacity trundling along European roads each day is actually utilised. One in four freight vehicles drives empty, and those that carry goods are on average only 57% full.

This inefficiency means that money is wasted and environmental damage is unnecessarily incurred: excess fuel consumption, greenhouse gas emissions, congestion, noise and infrastructure wear and tear. But for one Belgian company, the unused capacity is also an opportunity. TRI-VIZOR encourages companies to pool their transport and logistics capacities, generating both environmental and financial benefits.

The Antwerp-based firm claims to be the “world’s first impartial orchestrator for transport and logistics”. It brokers logistics-sharing agreements between shippers so that, for example, if two firms want to transport similar goods to compatible destinations, they will send a single, fully-packed truck rather than two half-full vehicles, or so that trucks that have just dropped off freight loads can be utilised rather than returning to base empty. TRI-VIZOR's specialist software can synchronise the shipments of multiple supply chains, and fairly distribute the costs and the gains among the different players.

TRI-VIZOR grew out of an initiative of the University of Antwerp. It was founded in 2008. Since then, says TRI-VIZOR's Sven Verstrepen, it has assembled a “huge database of companies and their freight flows. Our database spans more than 75,000 transport lanes and 100 mainly blue-chip companies willing to share data”.

Using this data resource, TRI-VIZOR can match up companies' logistics needs – and bring an end to empty trucks. “There are a lot of companies interested but we depend on the fact that there must always be companies willing to work together,” Verstrepen says. “It can take a while before a good match is found. Companies needed to make a mental shift to be ready to bundle their goods into logistics communities. Trust is key, because in the end, logistics is still a people business”.

The mental shift is underway. TRI-VIZOR is starting to generate business. It scored its first major success in 2011, when it matched up two pharmaceuticals companies, Baxter and UCB, in a “carpooling for cargo” agreement, with the logistics services actually provided by Belgian firm H.Essers. Both of the pharmaceuticals companies have specialist needs, requiring temperature-controlled transportation for their products.

TRI-VIZOR says that this has generated cost savings of about 9% and reduced the carbon footprints of participants by about 31%, compared to non-pooled freight. Verstrepen says that a number of more advanced projects are underway, from which the total logistics cost savings could amount to as much as 30%. Overall savings could be huge. According to logistics giant DHL, a “mix, move and match” approach to freight could address a structural inefficiency that cost the sector €160 billion in 2010 alone.

Verstrepen says that, “Our next challenge will be to focus on profitable growth and scale this whole thing up to unlock the massive synergy potential of large multimodal freight networks. We are already hiring and training transport planners to make that happen. Within the next 24 months we will get there, one community at a time”.

There is increased interest in maximising freight capacity utilisation. Projects are underway to examine the issue from a legal, scientific and practical perspective, such as the CO3 project (http://www.co3-project.eu), which receives funding from the European Union's Seventh Framework Programme for Research and Development. TRI-VIZOR is a core partner in the CO3 project and is responsible for implementing test projects in what it calls “the logistics laboratory”.

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