Collaborative Logistics in Aalborg: Opportunities, Challenges and the Road Ahead

Cities across Europe face significant challenges in relation to urban freight transport. The economic development in recent years have boosted activities in the city centres demanding increased freight transport. At the same time, urbanization has increased congestion issues and initiatives to minimize traffic in city centres have made city centres less accessible for freight transport vehicles.

A number of studies have explored how to optimize freight transport and minimize the negative externalities through collaborative logistics, a concept which has received a lot of attention in recent years. Collaborative logistics can be either a vertical collaboration between actors of the same supply chain, or a horizontal collaboration between direct competitors, for example competing logistics companies, aiming to decrease the costs of transportation and increase fleet utilization by sharing assets, information, knowledge etc.

The idea is built around an example if two competing logistics companies each have half a truckload of goods on the same route, then it makes sense for the companies to share the transport, place the goods on one full vehicle and share the saved costs. In turn, this will also generate environmental benefits, i.e. minimize driving and thus emissions of greenhouse gas, particles and noise.

This study provides an overview of the concept of collaborative logistics, and employs mathematical modelling to quantify the benefits which can be gained from collaborative logistics in urban freight delivery and interview-based methods to identify the challenges of implementing collaborative logistics in this setting in practice.

The study shows that horizontal collaborative logistics, i.e. collaboration between competing logistics companies, is found the most suitable approach to optimize logistics within given case of Aalborg. Within horizontal logistics two approaches are found, capacity sharing and order sharing. The study shows, that order sharing is the most beneficial approach. Using real-life data from two competing logistics companies, the analysis reveals that collaborative delivery and order sharing can reduce the total travelled distance of each company by an average of 24.75% compared to the non-collaborative distribution. Importantly, the analysis also reveals that even if the participating competitors only choose to share a subset of their orders, a significant reduction in travelled distance and emission is still achievable.

The analysis of the barriers shows that accessibility limitations in the city, partner selection issues, loss of a competitive advantage, issues in profit and cost sharing, different delivery structures and uncertainty regarding the branding of the delivery were the main barriers. The analysis also revealed that there is a support for collaboration among relevant stakeholders, however, the stakeholders have a low awareness of potential benefits of collaboration.

By simulating and proving the potential benefits of collaborative logistics based on real data, and simultaneously identifying the barriers, one of which being limited knowledge about potential benefits of collaboration, this report constitutes an important step towards implementation of collaborative in cities such as Aalborg.