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Why distribution networks are a win-win situation

Thea Jacobsen | 01. Oct 2019
3 minutes read

E-commerce is predicted to grow 9% each year and customers expect fast, cheap and green deliveries. And yet, 50% of all trucks in Europe run around half empty. Trucks, containers and trains move alongside each other with goods going the same way, and they all have plenty of space. 

Why not collaborate together and join distribution networks instead, to consolidate goods that are going in the same direction? 

 

network

 

A distribution network (or logistics network) is the combination of transportation, terminal, and warehousing services that companies use to get their goods from A to B. Collaboration between all of these intermediaries will secure better utilization of freight capacity and is a more sustainable way to deliver goods. According to Alan McKinnon, the logistics industry accounts for 11% of global emissions and increasing fill rates is a good place to start in order to lower this percentage. 

In addition to having a positive impact on our environment, using a distribution network can result in great benefits for both your company and your partners. 

Transparency and collaboration

For starters, using a distribution network to deliver your products is the more cost-efficient way to go. Making sure that all transportation units leaving a hub is fully utilized is more cost-efficient than sending out half-empty units. The increased volume will usually reduce the unit cost of transport. 

You need a fast, effective and reliable network in order to meet your customer's demands in 2019.  In order to achieve that, sharing valuable information in real-time with your partners is required. By collaborating in an open network instead of a closed network (Amazon, Alibaba) you get full control and insight over your distribution. With a digital logistics management system, you can easily integrate with all the partners in your network. This gives you the insight you need to satisfy your customers and deliver the right product, to the right customer, at the right time.

 

Final words

Collaboration and networks effects is a win-win for the shippers, the environment and the customers. The reality is, companies need to work together and share their logistics assets to achieve a cut in carbon emissions from this industry. While doing that, you also become more efficient and save costs.

More collaboration equals increased efficiency, reduced environmental impact and happy customers. 

 

Learn more the key trends in logistics this year in our free report:

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