CSCMP's Supply Chain Quarterly
October 21, 2018
Forward Thinking

Collaborate with rivals? For some, it pays off

A recent study found that when it comes to logistics operations, many companies would be willing to collaborate with their competitors in order to cut shipping costs.

Would you collaborate with your competitor when it comes to logistics operations? A recent study found that many companies would be willing to give it a try in order to cut shipping costs. In fact, a fair number have already done so.

Earlier this year, the U.K.-based research firm Transport Intelligence surveyed nearly 150 companies in Europe, North America, Asia, and Latin America on the topic of multimodal collaboration. A surprising 94 percent of respondents said that they would consider collaborating with another company, with most citing cost reduction as the biggest attraction for doing so. Transportation, warehousing, and value-added services were the most likely areas for cooperation.

When it came to working with a competitor, however, only about 38 percent said they would be willing to collaborate. The rest would prefer to work with a noncompeting company. But under the right circumstances—such as if a neutral third party managed the collaboration—the percentage of respondents who would consider working with a competitor in some way more than doubled.

For many companies, these are not just hypothetical questions. Researchers found that 43 percent of the poll takers had tried some level of collaboration with a competitor in the past. Most of those respondents came from the retail or consumer goods sectors, and most examples of shared logistics were taking place in Europe, said Joel Ray, the author of the study and head of consulting for Transport Intelligence. For example, Kimberly-Clark and Unilever have built a joint warehouse in the Netherlands; Sony and Samsung are sharing a warehouse in the Netherlands; and Norbert Dentressangle is managing a tire distribution center for Goodyear Dunlop and Continental in the United Kingdom.

Respondents whose companies have tried collaborating on logistics activities said that cost savings generally outweighed the efficiency gains. On average, companies achieved cost savings of between 6 and 10 percent. However, those in the retail, high tech, automobile, and chemical industries reported cost savings from logistics collaboration exceeding 15 percent.

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