cargo pooling with cinatis way

With Cinatis Way, let’s pool cargo!

Web-based solutions editor, for supply chain communities

SAS : Company with a capital of € 94,000 supported by Logoden, OSEO, Brittany Regional Council and the French ‘Technopole’ network.

Background : Editor of web-solutions for logistical activities (SaaS-based)

Project : to become the first collaborative transportation network in Europe

Board : 3 founder-partners from supply chain universe.

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FILLING RATE FOR THE TRUCKS OPERATED ON FRENCH ROADS

Or why will the cargo pooling be increased in Europe ?

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67%

How to reduce transportation costs?

Cargo pooling with Cinatis Way

EVOLUTION OF TRANSPORTATION CONSTRAINTS

What are the actual and future constraints for the transportation?


In the 20th century, transportation was dedicated!

A transport multiplication, with common starting and finish points

Obviously every shipper optimize … within the limits of its possibilities (volume/appointments)

This competitive system creates additional costs and issues with challenging customers

Routes are operated even if trucks aren’t complete (respect of commitment)

Operative times and run distances are high (carriers)

As a result a filling rate of 2/3*

5 * Source ADEME

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We can admit that there is no true praise!

Increase of run kilometers

Increase of fuel consumption

Increase of greenhouse gas

Infrastructures saturation


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And it won't be better…

The forthcoming environmental tax in Europe will emphasize the

transportation cost in the product price. It would be between 0,025€ and 0,14 € per kilometer (between + 3% and +10%).

An alternative supply for road transport is almost inadequate in Europe and doesn't offer any economically satisfactory solution (1,5% on avg.)

The final consumer becomes aware of the environmental weight of logistics during the product fabrication.

The demands of industrial customers or retailers are often antonymic with the transportation cost optimization. For example : requirement for being delivered oftener and for cheaper


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In summary, transport faces a structural pressure without precedent

• Increased energy cost with an important varation of fuel indexation

• A new taxation weighing by 2013 to 10% on transportation cost

• Permanent strain on prices

• 54% of logistics costs affects transport

Costs

• A weak filling rate of vehicles

• Increased greenhouse gases

• Modal transfer from road to rail or river is hard

• Crowed infrastructures

Environment

• Constant flow imbalance

• Hazards on transport means availability

• Deliveries smaller and smaller

• High deliveries frequencies

• Business rules are changing constantly

• Many transportation partners

Organization

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The actual context leads us to reconsider land organization, and especially transfers in order to obtain …

… more economical transports :

Growing a regional dynamic, with industrials and carriers who know how to exceed

non-disclosure rules of their business

Promoting occupancy rate of trucks and avoiding empty returns

Reducing road mending costs

Preserving trunk roads doomed to saturation

… more ecological transports :

Furthering NGV or electric vehicles

Training drivers to eco-driving

Taking on multimodal transport in order to reduce greenhouse gases and carbon footprint for every transported product

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ECO

² Cargo pooling with Cinatis Way

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In summary, 4 interacting issues to be resolved

Relationships with carriers can’t only be restricted to freight costs but must allow to generate productivity gains for the carriers.

Manufacturers and retailers transport organizations must overpass their limits and make sure to reach the optimum in the network they belong

Optimal solutions will be met by transportation scheduling just like the best practices used for industrial activities.

The organizations and deployed means have to be chosen due to their environmental efficiency.

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Create a new relationship model

with carriers

Innovate with new transport outlines

Anticipate the transport activity

at middle and long term

Reduce the environmental

impact


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BENCHMARK ON CARGOPOOLING EXPERIENCES


Cargo pooling consists in bringing stakeholders together by compatibility and organizing their collaboration

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The solution is: a pooled supply chain !

Cargo pooling consists in rolling out a business-to-business collaboration in order to aggregate cargos within the same vehicles.

Pooling acts simultaneously on 3 issues:

Reduce the transport costs

Reduce the greenhouse gases emissions

Increase delivery frequencies


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The results obtained for the first 35 cargo pooling initiatives encourage an exponential development for its approach

Cargo pooling initiatives have been promoted by retailers, manufacturers, SMB and global companies.

For whatever players size, they obtain gains according to the flow they aggregate.

Higher the share of pooled flow is, bigger the gains are for every player.

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Andros, Auchan, Bénédicta, Bongrain, Bel, Bridgestone, Cadburry, Carrefour, CAM 53, CAM 56, Casino, Castorama, CEPA LDC, CECAB, Coca Cola, Colgate, Conforama, Continental, Coopagri, Damart, Danone, Entremont, Eugène Perma, GSK, Heinz, Henkel, Ikea, Kronenbourg, Lactalis, Lustucru, Marie, Mars, Materne, Monoprix, Montblanc, Nestlé, Normand’vie, Nutrimaine, Ovomaltine, Picard, Reckitt, Sara Lee, Senoble, Sodiaal, Sunny Delight, Unilever, United Biscuits, Vegam, Verywear, Yoplait,


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Carrefour has already "pooled" 400 suppliers but some issues have to solved

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1 network with 10 consolidation DC

400 SMB suppliers with a same point of delivery

Optimized truck for inbound flows

Products shortages in stores reduced by 50%

Inbound transport costs decreased by 6%

Delivery frequencies multiplied by 3


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Initiative of 2 major companies

Cadbury and Sara Lee have launched a cargo polling project in 2004, based a platform (annual factory pool of 460000 pallets toward 7 retailers i.e. 40 delivery points). Every point is delivered from 2 to 4 times per week. The project goals are reached :

The solution meets the customers needs

Delivery frequencies are increased

Logistics costs are decreased

Order-fill ratio is raised

For the customers, the benefits are also significant. For example for Carrefour :

Stock level have been reduced by 38% and 15%

Order-fill ratio has risen by 0,6 point for 1 year

Deliveries have dropped by 36 %

93 tons of CO² have been cut annually


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Gains for Cadbury - Sara Lee Supply Chain

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Benefits Drawback

Global

Drop in transport costs : full-loaded trucks optimization, balances order elimination

Complex process to roll out

Fall of CO2 emission Rise in constraints

Process and organizations standardization (daily issues can be spotted and solved)

Improvement in forecast and reactivity : cargo pooling ensures spreading over time activity

Better customer service

Retailers

Raise in delivery frequencies Increased suppliers weight, even more so they are numerous

Increase in order-fill ratio

Drop in stock

Suppliers

Competitive benefit from logistics costs pooling, improved management for product launching, seasonal products and special offers

Long-term bond (on 2 to 4 years) at least with one or several partners Increase in picking costs (layer/parcel, vs pallet)

Source JC Festinger - Aslog Cargo pooling with Cinatis Way

An initiative from food-processing SMB enables to increase delivery frequencies fourfold without over cost

5 dry-goods shippers are pooling their cargos to deliver Carrefour platforms by multi-pick

Solution operated trough 2 platforms with 27 pallets per shipment => filling rate of 82%

Order-fill rate of 100% since the beginning

Drop in transportation costs of 25%


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An initiative from food-processing SMB enables to increase delivery frequencies fourfold without over cost

Faster

More productive

Less empty

Less km

Less CO2 emissions

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More reliable transport

Better mobility

Stronger reactivity

Costs control

Less receipts in platform

Less stock (-15d)

Less shortages in store

MANUFACTURER CARRIER RETAILER


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In summary, 3 main benefits arise from the 35 first benchmarks and explains the enthusiasm for this new action lever

1) More economical transports improving occupancy rate of trucks and optimizing transportation plan

2) More eco-friendly transport reducing the mileage and the fuel consumption

3) The opportunity to make the most of a higher delivery frequency owing to the volume per destination increase

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The 5 to 15% gain is depending on the volume

we can inject into the pooling network


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The cargo pooling benefits to all the logistics processes

Better schedule of supply and/or customers orders Synchronization of supply paces requires to improve its orders scheduling and to increase

its cadence.

Better anticipation and visibility for picking orders

More accurate scheduling of suppliers or customers orders allows to better anticipate the picking orders in the warehouse

Higher productivity for docks receipt

Drop in receipt vehicles number permits to cut off fix operations per vehicle (docked vehicle, vehicle control, receipt readying)

Drop in areas and resources dedicated to goods receipt and deliveries

Drop in vehicles number optimizes the use of warehouse resources for goods receipt and shipments.

Fall in products shortages Rise in delivery frequencies enables to minimize product shortage risks without

deteriorating transportation costs


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In overview, cargo pooling is the best solution for logistics optimization for the years to come

Structure all the logistical processes

Entities’ synchronization of every group member enables to improve all the processes (scheduling, supply, production, picking order,

administrative management)

Improve the service

Cargo pooling ensures to increase delivery frequencies without

deteriorating transport costs and lowering stock shortages

Conciliate results and sustainable development

The decrease in vehicles number makes it possible simultaneously to improve the

transport costs and to reduce the greenhouse gases emission for transportation activities

Work on every lever concurrently

Cargo pooling comply as a complement with so far antonymic goals: generate savings

improving the environmental impact and the service

Cargo pooling


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For further information, please contact us at

[email protected]

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