How to increase the fill rates in freight transportation
Soren Moller |
16. Feb 2021
5 minutes read
Studies show that 20% of all trucks driving around Europe are completely 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 filled by only 51%. These half-empty/empty trucks are causing traffic, congestion and delays. The empty capacity is the “single largest source of waste in the trucking industry” in the states. Don't you think it is about time we change these numbers for the better?
What causes the big amount of available space?
Empty space represents a major problem. However, it also represents a dilemma in our society. The consumers are accepting the so-called “free trade” for all. This means that traditionally, shippers (or government) have never before interfered with this principle. The logistics service providers or freight forwarders have been solely responsible for optimizing fill rates. Also, we all know that "the customer is king", so short lead times are 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. It is a waste of resources. From a sustainability point-of-view, it should be on the top of the priority list for everyone working with logistics. 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.
To reduce freight emissions, several suggestions with good intentions have been proposed: switching to electric vehicles or biodiesel, special tires and cleaner engines.
But the problem with these suggestions is that they will only reduce emissions by 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 move the figures in the right direction.
What can be done?
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 by 50%, by using the MIXMOVE solution and collaborating with their logistics service providers. They also reduced their total logistics cost by 35%.
3M EMEA wanted better efficiency and more sustainable logistics operations. They used our cloud solution to connect with their logistics service providers and change their cross-docking process. A flexible cross-docking solution like MIXMOVE can go all the way down to the item level, instead of working with just pallets. It provides the capability to configure rules around your unique products and processes, allowing you to combine differently sized units to better fill the transportation modes based on the next mode and destination. This makes it possible to increase the fill rates tremendously and have full visibility and control over your operations.
Today, this operation with 3M EMEA 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 EMEA 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. Learn more by downloading our free white paper!