It is a well-known fact that the fill rates in the US and Europe are low. Studies show that 20% of all trucks driving around Europe are just empty. Those who are not empty are only filled half on average.
Out of four trucks in operations in the US, one is empty, two are almost empty and one is just filled by 51%. These half empty or empty trucks are causing traffic, congestion and delays. This empty capacity is the “single largest source of waste in the trucking industry” in the states.
This empty space represent a major problem. However, it also represents a dilemma in our society. The consumers are accepting and encouraging the so- called “free trade” for all. This means that traditionally, shippers (or government) have never before interfered with this principle. The actual trucking company or freight forwarder has been solely responsible for the number of trucks and optimizing fill rates in the trucks. In addition, the customer is king so short lead times is needed for companies need to meet the sales targets.
It is time to change this principle. It should no longer be acceptable to drive around empty or almost empty, and waste this available capacity. Looking at this from a sustainability point-of-view, it should be on the top of the priority list of many. Consumers are also becoming more concerned about sustainable deliveries, and demands that companies deliver their packages fast, at a low cost but also in the most sustainable way.
“Regulation” is not a popular word, but rules in the “free trade environment” might need to be changed?
In order to reduce freight emissions, several suggestions with good intentions have been proposed: switching to electric vehicles or bio diesel, special tires and cleaner engines.
But the problem with these suggestions is that they will only reduce emissions with a few percent, and it will not reduce the number of trucks on the roads. Hence, we will still have the same amount of traffic. The industry desperately needs to think differently and take a look at how they can change their operations to really move the figures in the right direction.
Using technology for optimizing logistics operations might be the answer to this problem. 3M EMEA managed to increase their utilization rate from only 31% to + 90% and reduce their emissions with 50%, by using an innovative logistics process and working together with the logistics service providers. In addition, they reduced their total logistics cost with 35%.
Read the 3M use case here: 3M reduced transport costs and emissions
3M wanted more efficiency and more sustainable logistics operations. They used a neutral cloud platform where all the logistics service providers they worked with could be connected. This made it possible to increase the fill rates tremendously and have full visibility across all providers and the goods. The algorithms in the cloud platform calculated the filling of the pallets and what provider is driving on what route.
Today, this operation is running through 27 installations covering 20 countries and 3 million transport units per month. By utilizing smart cloud technology, their sustainability goal has been reached much sooner than expected for 3M and their service providers.
Using technology and collaborating with partners in a network is the key to higher fill rates and reduced CO2 emissions from freight.