In 2002, oil was trading for around $20 barrel and, with the exception of the odd contretemps, had been priced thereabouts for a decade. When Dubya invaded Iraq, few believed the scaremongers postulating $80 oil. It is now double that and when plotted, the price curve rises exponentially.
For a time it was fashionable for businesses to be seen as a pale shade of green, but that greenwash has been replaced by an overwhelming priority – to engage in sustainable distribution and reduce energy consumption.
Recently in Britain, it was a bit of speed dating that made a huge difference.
As a result of a Cost to Deliver Study, British retail consultancy IGD recently encouraged a number of retailers and grocery suppliers to get together to engage in some collaborative trucking, resulting in huge savings in fuel costs, distances travelled and carbon emissions.
The process began with the companies giving a very brief overview of their distribution timetables, routes and unutilised capacity to each other. It surprised few that there were fully or partly empty trucks running all over Britain.
Where there was mutual interest, they clarified capacity and expectations and developed wish lists of how they could collaborate by using each others’ infrastructure and staff. And like speed dating, the end result involved time and place agreements that resulted in some commercial cooperation.
The project required in some logistics system redesign, and some major shifts in attitudes. Some sacred cows providing obstacles. How could Mars’ trucks be allowed into another confectioners loading dock? Secrets might be at risk and someone might see!
The commercial reality began to prevail. Now Nestle trucks carry someone else‘s biscuits on trunk routes and the idea is starting to spread.
The collaborative trucking project facilitates out of hours delivery, with larger trucks making bigger and fewer deliveries. The availability of real time traffic information to the drivers and dispatchers has added to the savings.
When fully operational, the project is estimated to save 2 billion km and 600 million litres of fuel. Not a bad outcome from what started as a blind date.
Retailers, particularly the big internationals, and their suppliers, are setting very stretching energy targets. Wal-Mart is aiming for a 25% increase in energy efficiency in 2008. Tesco is severely restricting air transport of merchandise and increasingly switching from road to rail.
What is happening here?