We’ve been listening.
Everyday, local food suppliers across North America are struggling to get their products to their buyers. On average, the vehicle load for distributing food products is approximately 50% when arriving at the delivery point. This means that the majority of transportation is moving half full. This inefficient loading of transport vehicles leads to increased cost, increased emissions and less capacity to be able to ship in a larger area to grow customer base.
So, we think local food distribution needs a new look.
This is where co-delivery comes in. Local Line will be exploring the topic of co-delivery in a three part series to explore the benefits and applicability of this new distribution concept. In the next few weeks, expect more content coming your way!
But for now,
What is Co-Delivery?
Co-delivery is the coordination of vehicle distribution routes from different suppliers to bring products to their buyers. Essentially, it is connecting two suppliers that need to distribute their products to the same location, however do not have the capacity to do it alone.
Benefits of Co-Delivery:
1. It saves you money: Leveraging co-delivery will save your business money, as it reduces the possibility of transportation with a partly loaded vehicle. When working together with one or multiple different suppliers, fuel efficiency is optimized. Co-delivery can consume more fuel than a conventional system, however this system has fewer food miles, resulting in a more fuel-efficient system. A study in Serbia found that improving distribution routes saw a reduction of 20% in transportation costs (Mittal et al. 2018).
2. It increases your shipping area: Distributing in partnership with other suppliers will give your business the ability to get your product to cities you may have not had the capacity to be able to ship to previously. It may also give you the ability to broaden your customer base - as the product is now available in a larger shipping area and you have access to the client directory of the other suppliers you are partnering with.
3. It fills capacity (especially backhauling): Backhauling is the carrying of goods on return trips. For example, delivering a product from your farm to Toronto and then collecting products from suppliers located in Toronto and bringing them to the region where your farm is located in. This prevents empty vehicles from returning to their original location and aiding other suppliers that require transportation. Backhauling allows for profit from the return trip. Co-delivery will ensure that there is a greater chance that resources are needed in the original location, due to the multiple suppliers that are member to the distribution route.
4. It will reduce the emissions from your distribution route: By participating in co-delivery, you are reducing the transportation of half loaded vehicles from traveling back and forth to the same location. If there is only one vehicle driving the route, the amount of emissions will be cut in half. In a study that looked at transportation collaboration between two large corporations, Nestle and United Biscuits; co-delivery reduced fuel consumption by 85 000 litres and CO2 emissions by 223 tons (Mittal et al. 2018).